End Of Service Benefits in Kuwait: Complete Guide Updated

If you’re working in Kuwait or planning to move there for employment, understanding the End of Service Benefits (EOSB) is crucial. These benefits, also known as indemnity, are part of an employee’s financial rights at the end of their service period. This article will guide you through the complete structure, eligibility criteria, calculation methods, and legal aspects of end-of-service indemnity in Kuwait, along with official resources for accurate calculations.

What Are End of Service Benefits?

End of Service Benefits are financial payments made to employees upon the termination of their employment contract. These benefits are designed to recognize the employee’s time and service to the company and are regulated under the Kuwait Labor Law (Private Sector Law No. 6 of 2010).

Who Is Eligible for End of Service Benefits in Kuwait?

EOSB is mandatory for all expatriates and Kuwaiti nationals working in the private sector, provided they are not terminated due to gross misconduct or breach of contract. The eligibility depends on the following conditions:

• The employee must have completed at least one year of continuous service.
  
• The employee must not have been dismissed for disciplinary reasons.
  
• EOSB applies regardless of the reason for termination (resignation, termination, or contract completion).
  

How Is End of Service Indemnity Calculated?

The calculation depends on whether the employee is monthly-paid or daily/hourly-paid, and whether they resigned or were terminated.

For Monthly-Paid Employees:

Years of Service	Resignation	Termination/Contract End
Less than 3 years	No EOSB	15 days’ salary per year
3 to 5 years	50% of EOSB	15 days for first 5 years, 1 month after
5 to 10 years	2/3 of EOSB	1 month salary per year
More than 10 years	Full EOSB	1.5 months per year

• 
  The 15 days’ salary is calculated based on basic salary, excluding allowances.
  
• A month’s salary is calculated similarly, using only the base salary.
  

To get a precise amount, use the official indemnity calculator Kuwait, which factors in all recent changes to labor laws.

Example Calculation

Scenario: A monthly-paid employee resigns after working for 7 years with a base salary of KD 400.

• First 5 years: 15 days x 5 = 75 days → (75/30) months = 2.5 months
  
• Last 2 years: 1 month x 2 = 2 months
  
• Total = 4.5 months’ salary = KD 1800
  
• Resignation after 7 years → entitled to 2/3 of KD 1800 = KD 1200
  

This calculation gives a rough estimate. For accurate results tailored to your situation, it’s best to use the indemnity calculator Kuwait.

What Happens if the Employer Refuses to Pay?

Employees who do not receive their EOSB are encouraged to first speak to their HR department. If that does not yield results, they can:

• File a complaint with the Public Authority for Manpower.
  
• Seek legal action through the Kuwait Labor Court.
  

The labor laws are in favor of the employee, and unjustified denial of indemnity can result in penalties for the employer.

Important Legal Notes

• End of Service Benefits must be paid within seven days of the employee’s last working day.
  
• EOSB is considered a legal obligation, and refusal to pay can lead to criminal charges.
  
• EOSB cannot be waived through contracts. Any clause attempting to waive this right is legally void.
  

Difference Between Resignation and Termination in EOSB

The amount an employee receives depends significantly on whether they resigned voluntarily or were terminated by the employer.

In Case of Termination:

• Full indemnity is granted https://hopetraveler.com/ irrespective of the duration (after 1 year of service).
  
• For longer durations, the EOSB can exceed 1.5 months’ salary per year.
  

In Case of Resignation:

• Employees with less than 3 years of service get nothing.
  
• Employees between 3 to 10 years receive partial EOSB.
  
• Employees with 10+ years receive full EOSB upon resignation.
  

How to Claim Your End of Service Benefits

1. Resignation Letter or Notice of Termination
   
   • Must be documented and acknowledged by both parties.
     
2. Final Settlement Request
   
   • Submit a request in writing for your indemnity calculation.
     
3. Return of Company Property
   
   • Ensure that all assets like ID cards, laptops, etc., are returned.
     
4. Request EOSB Payment
   
   • Mention the mode of payment (bank transfer or cheque).
     
5. File Complaint If Necessary
   
   • Contact the Ministry of Social Affairs and Labor for unresolved cases.
     

Driving in Kuwait After End of Service

If you plan to stay in Kuwait after your service ends (for job search or final exit arrangements), it’s crucial to maintain valid documentation. One such requirement is a valid driving license. Visit this Kuwait driving license guide for step-by-step instructions on how to renew or update your license as per the latest regulations in 2025.

Conclusion

Understanding your End of end-of-service benefits in Kuwait is essential for planning your future after employment. Whether you’re resigning or being terminated, knowing your rights ensures that you receive what you’re entitled to. Always calculate your expected indemnity using tools like the official indemnity calculator in Kuwait, and ensure your documents are in order, including your Kuwait driving license if you intend to stay longer in the country.

Frequently Asked Questions (FAQs)

1. Is EOSB taxable in Kuwait?

No, Kuwait does not impose income tax on individuals, including end of service benefits.

2. Do allowances count in EOSB calculations?

Only the basic salary is considered for EOSB. Housing or travel allowances are not included.

3. Can I receive EOSB in my home country?

Yes, you can request the payment be sent to your home bank account.

4. What if I worked part-time?

EOSB applies only to full-time employees under legal contracts.

5. Can my employer delay EOSB?

Legally, no. EOSB must be settled within 7 days of termination or resignation.