Indemnity vs Annual Leave Payment in Kuwait

Many employees confuse end-of-service indemnity with unused leave cash-out. They are separate legal rights under different articles — and both must appear in your final settlement.

End-of-Service Indemnity (Article 51)

Indemnity rewards your years of service. It uses the 15/30-day tier formula, 26-day divisor, 18-month cap, and resignation percentage rules. It is not related to how many leave days you have left.

Unused Annual Leave (Article 70)

If you have accrued but unused annual leave when your contract ends, your employer must pay those days at your daily wage rate (salary ÷ 26). This is a separate line item from indemnity.

Leave Payout = Unused Days × (Monthly Salary ÷ 26)

Side-by-Side Comparison

FactorIndemnity (Art. 51)Unused Leave (Art. 70)
Based onYears of serviceUnused leave days
Formula15/30 days per yearDays × daily wage
Cap18 months' salaryNo separate cap

Our calculator includes optional unused leave days in the advanced section.

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