Indemnity Calculator

This service is provided by Kuwait Links; it allows employees to determine their end-of-service benefits Online based on Kuwait labor law:

What is the Kuwait Labor Law Indemnity

The Kuwait Labor Law Indemnity refers to the end-of-service gratuity paid by an employer to an employee upon the termination of their employment contract, in accordance with the provisions of the Kuwaiti Labor Law. This gratuity serves as compensation for the employee’s length of service and aims to protect their rights. It is calculated based on the last basic salary earned for the first five years of service. The employee is granted 15 days of pay for each year, followed by an additional 30 days for each subsequent year. If the employee resigns before completing the first year, the employee is not entitled to compensation.
It is worth noting that there are some disciplinary cases that may affect the compensation amount. However, in all cases, compensation is paid upon termination of the employment relationship, whether through termination of the contract or the employee’s resignation, in accordance with Kuwaiti Labor Law No. 6 of 2010 and its amendments.

Kuwait Labor Law Indemnity Rights

The following are the most prominent compensation rights guaranteed by Kuwaiti Labor Law to employees upon termination of the employment relationship:

• An employee is entitled to end-of-service compensation if he or she has completed at least one continuous year of service.
• End-of-service compensation is calculated based on the employee’s last basic salary.
• The employee is entitled to 15 days of salary for each of the first five years.
• 30 days of salary are granted for each additional year after the first five years.
• An employee who resigns before completing the first year is not entitled to compensation.
• Disciplinary dismissal may affect an employee’s right to compensation or the amount of compensation.
• Compensation is paid upon termination of the employment relationship, whether due to the expiration of the contract or the employee’s resignation.
• These rights are protected by Kuwaiti Labor Law No. 6 of 2010 and its related amendments.

How to Calculate Indemnity in Kuwait

You can easily use the Kuwait Indemnity Calculator by following these simple steps:

• Visit the Kuwait Indemnity Calculator.
• Select your employment start date using the calendar provided.
• Choose your end of service date using the same calendar.
• Enter your monthly salary at the time of contract termination.
• Input the number of unpaid leave days, if any.
• Click the “Calculate Indemnity” Button to get your result.

Total End of Service Indemnity in Kuwait formula

End-of-service gratuity in Kuwait is calculated by adding several figures based on the employee’s length of service and salary. The general formula is as follows:

Total Indemnity =
(Indemnity for the first 5 years of service) + (Indemnity for service beyond 5 years) +(Indemnity for additional full months) + (Indemnity for additional days) + (Unused paid leave compensation)

Who Qualifies for Indemnity Benefits in Kuwait?

The following are the categories entitled to end-of-service compensation according to the Kuwaiti Labor Law:

• Employees who receive end-of-service compensation if they have completed at least one continuous year with the same employer.
• The compensation includes all employees, whether Kuwaiti or expatriate.
• Compensation includes contracts, whether fixed-term or indefinite.
• An employee who resigns before completing the first year will not be entitled to any compensation.
• Some cases of disciplinary dismissal may affect or cancel an employee’s right to compensation.

Kuwait Paid Leave Calculation for End of Service

To calculate your paid leave balance, which may affect your end of service compensation, you should review the following:

• Annual Leave Entitlement: Employees in Kuwait are entitled to 30 days of paid annual leave after completing one year of service (excluding public holidays and sick leave).
• Unused Leave Days: If there are unused annual leave days upon termination of employment, the employee is generally entitled to compensation for these days in addition to the end-of-service compensation.
• Calculation Method:
  • Determine the number of unused paid leave days.
  • Calculate the daily wage (monthly salary ÷ 30).
  • Multiply the daily wage by the number of unused leave days.

Cases of Denial of End-of-Service Gratuity in Kuwait

Under Kuwaiti Labor Law, an employee is denied an end-of-service gratuity in specific cases, including:

• If the employee commits a serious error that causes significant financial loss to the employer.
• If the employee obtained the job through fraud or forgery.
• If the employee discloses confidential company information, resulting in damage to the company.

Calculate Your Indemnity in Kuwait Manual

Example: Retirement after 20 Years of Service (Private Sector) Employee Details:

• Basic Salary: 1,000 KWD
• Service Duration: 20 years
• Sector: Private

Calculate Kuwait Indemnity for the First Five Years

Indemnity for the First Five Years = ( Daily Salary × 15 ) × Number of Years:

• For the first 5 years of service → 15 days of salary per year:

  • (1,000÷30)×15×5=2,500 KWD

Calculate Kuwait Indemnity for Years Exceeding Five

• Indemnity for Years Exceeding Five = ( Daily Salary × 30 ) × Number of Exceeding Years:

• For the remaining 15 years → 30 days of salary per year:

  • (1,000÷30)×15×5=2,500 KWD.

• For the remaining 15 years → 30 days of salary per year:

  • (1,000÷30)×30×15=15,000 KWD.

• Total Indemnity:

• • $$2,500+15,000=17,500\text{KWD.}$$

Conclusion

Determining your compensation in Kuwait is easy with a clear understanding of the labor law regulations and proper application of calculation methods. Using tools like the Kuwait Compensation Calculator simplifies the process and ensures accurate results. However, if you encounter any issues regarding your compensation claim, seeking legal advice helps protect your rights and facilitates a resolution.