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Indemnity Calculation in Kuwait Labour Laws

Indemnity or End of Service Benefits Calculation is crucial step must be completed according to Kuwaiti Labour laws when an employee leaves his Job. Huge number of foreign workers in Kuwait don’t have knowledge related to their indemnity sometime they leave the country without even getting their end of service benefits. Kuwaiti labour laws states all the rights must be given to private sector employees, indemnity is also one of them. The official document which states all these laws is call Law no. 6/2010. Expats have right to get his indemnity, which is calculated according to provisions listed in labour laws. We discuss in this article what are the basis of calculation of Indemnity in Kuwait.

When Indemnity to be Paid: 

Indemnity to be paid to employee when he/she completed or ends his mutual labour contract means leave the job. As well in case terminated from the job.

Which Private Sector Worker not Allowed to get Indemnity:

Those employees who does not complete first 3 years of service and resigns the job before completing 3 years  not eligible to get Indemnity. Also those who make the contract of 2 years or less than both parties must clear how much indemnity will be given.

Indemnity for Workers on Daily Wages:

Workers/Labourers who works on daily basis in Kuwait if leave the job after completing 3 years then they get an wage of 10 days while those who leave after 5 years get wage 15 days for each year of service.

Example:

Total duration of work  4 years

per day wage 5 KWD

as leave before 5 years he get 10 days of wage for each year

10 day wage 50 = 50 x 4 = 200 indemnity.

 

Indemnity Calculation for Workers on Monthly Wages:

Employees who works on monthly basis in Kuwait if leave the job before completing 5 years then they get an wage of 15 days while those who leave after 5 years get wage of 30 days for each year of service.

Example:

An employee who leaves the company after completing 8 years of service and his last wage is KD 300

Total Service: 8 yrs

Last Received wage: KD 300

For first 5 years the indemnity is equal to 15 days for each year

Total days in first 5 years for indemnity is 75 days

You must have to subtract Weekend holidays from these 75 days which means in each month there are 4 to 5 Weekends Subtract 4  from 30 = 26 days.

So, 75 Divded by 26 = 2.88 months

2.88 x KD 300 = 864 KD indemnity for first 5 years

indemnity for service after 5 years is equal to 30 days for each year

Total Service is 8 years as we calculated 5 years above so subtracting 5 from 8  gives 3 years.

After 5 years service is 3 years

Total days for indemnity is 90 days

You must have to subtract Weekend holidays from these 90 days which means in each month there are 4 to 5 Weekends Subtract 4 from 30 = 26 days.

So, 90 divided by 26 = 3.46 Months

3.46 x KD 300 = 1038 KD

So after adding first 5 year and after 5 year indemnity we get

864 KD and 1038 KD

864+1038=1902KD

1902 * 2/3 = 1268 KD

As employee resigns after 5 years but below 10 years he will be given 2/3rd of total indemnity

Total indemnity is 1268 KD 🙂 

In above case the employee resigns from his job before 5 years and not terminated so he get half indemnity.

Indemnity in case of Resignation before  5 years:

In case the employee resigned from company before completing 5 years the he/she deserves half of its indemnity calculation.

Indemnity in case of Resignation After 5 years but less than 10 years:

In case the employee resigned from company in Kuwait before completing 10 years but after 5 years than he/she is eligible to get 2/3 of his total calculated indemnity.

Indemnity in case of Resignation After 10 Years:

In case the employee resigned from company in Kuwait after completing 10 years of service than he is eligible to get full indemnity after calculation.

Indemnity in case of Termination by Company or Employer:

if employee is terminated by his company or employer than he is eligible to get full  indemnity for each of service whether more than 5 years or less than 5 years.

How Much Maximum Months of Total Indemnity will be given:

What ever case is it the total indemnity must not exceed than 18 months according to Article 51 of Kuwait Laws.