Kuwait Labour Law Indemnity — Article 51 Explained

British and American spellings aside, the law is the same: Kuwait Labour Law No. 6 of 2010 sets out your end-of-service indemnity in Article 51. This guide focuses on what the statute actually says and how payroll teams in Kuwait apply it in 2026.

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.

STATUTE

Article 51 — Kuwait Labour Law indemnity text

For workers paid monthly: 15 days' remuneration for each of the first five years, then one month's remuneration for each year after. Total indemnity may not exceed one and a half years' remuneration.

For daily, weekly, hourly, or piece-rate workers: 10 days per year for the first five years, then 15 days per year after, capped at one year's remuneration.

Why "kuwait labour law indemnity" matters in disputes

When an employee and employer disagree, PAM and labour courts look straight at Article 51 and supporting articles (55 for remuneration, 70 for leave). Employers sometimes calculate on basic salary only; employees argue gross package. Kuwait Court of Cassation has repeatedly held that fixed regular allowances count toward remuneration if they appear every month on the payslip.

What counts as remuneration under the law

Included

  • Basic salary
  • Fixed housing allowance
  • Fixed transport and food allowances
  • Regular uniform bonuses paid to all staff

Usually excluded

  • One-off performance bonuses
  • Overtime and expense reimbursements
  • Temporary hazard or field premiums

Details: which salary is used for kuwait indemnity.

Fixed-term vs open-ended contracts

  • Fixed-term ends without renewal: Full indemnity if you served more than one year — even when neither side wants to extend.
  • Open-ended — employer terminates: Full indemnity (subject to notice rules) unless Article 41 misconduct applies.
  • Open-ended — you resign: Tiered reduction: nil under 3 years, then 50%, 66.67%, and 100% at 10+ years.

Article 70 and your final payslip

Labour law indemnity under Article 51 is only one line on your clearance. Unused annual leave under Article 70 is calculated separately at salary ÷ 26 per day. HR should not offset leave against indemnity unless you agreed in writing — they are distinct entitlements.

Private sector vs other employers

Most kuwait labour law indemnity searches come from private-sector expats. Government and oil-company schemes can add internal policies, but Article 51 remains the floor in standard employment. Read more on private sector indemnity in Kuwait.

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