Indemnity in Kuwait After 3 Years of Service

Three years is the line in the sand. Resign before that and Article 51 gives you nothing. Cross it — even by a single month — and you are entitled to at least half of your calculated indemnity when you leave on your own.

Last reviewed: Checked against Law No. 6 of 2010, Article 51

Written for employees and HR teams in Kuwait. Not legal advice — confirm disputed amounts with PAM or a licensed lawyer.

What changes at 3 years?

Under an open-ended contract, voluntary resignation before 3 continuous years means 0% indemnity. That surprises a lot of workers who assumed any departure triggers a payout. After 3 years, resignation pays 50% of the gross amount until you reach 5 years — then the rate rises to 66.67%.

If the company terminates you instead, the 3-year resignation rule does not apply — you generally receive 100% after one full year of service (unless Article 41 misconduct is alleged).

Worked example: resigning at 3 years 2 months

Salary: 450 KWD/month · Service: 3 years 2 months · Reason: resignation

  1. Daily wage = 450 ÷ 26 = 17.308 KWD
  2. Indemnity days ≈ 3.17 × 15 = 47.5 days
  3. Gross = 47.5 × 17.308 = 822.13 KWD
  4. Resignation at 3–5 years = 50% → 411.06 KWD

Should you wait until 3 years?

If you are planning to resign and you are at 2 years 10 months, waiting two more months can unlock half your indemnity. Run both scenarios in our calculator — the difference is often worth more than two months of salary, especially on higher packages common in Kuwait's private sector.

Fixed-term contracts

When a fixed-term contract expires without renewal, full indemnity is typically due after one year — the resignation tiers do not apply the same way. Always check whether your contract is fixed or indefinite before you hand in notice.

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