Kuwait End of Service Indemnity (EOSB) — Complete Guide 2026

In Kuwait the end-of-service payment is officially the indemnity (مكافأة نهاية الخدمة), the local name for what other Gulf states call the gratuity or EOSB (end of service benefit). It is a lump sum your employer must pay you when your private-sector employment ends — a legal entitlement, not a bonus or a discretionary reward.

Kuwait's indemnity is governed by Private Sector Labour Law No. 6 of 2010, principally Article 51, which sets the rate, the maximum, and how a resignation is treated. The Public Authority of Manpower (PAM) is the government body that administers and enforces it.

The indemnity exists because Kuwait, like the rest of the Gulf, has historically had no state pension for private-sector expatriate workers. The lump sum is what you leave with — to move to a new job, return home, or retire on.

Article 51 covers private-sector employees under the Labour Law. It does not cover government and public-sector staff (who have separate retirement schemes) or domestic workers (covered by a separate domestic-labour law). Your indemnity is a statutory minimum: a contract can offer more, but any clause that pays less than Article 51, or tries to waive the indemnity, has no legal effect.

Whether you qualify — and how much you receive — depends on how you leave and how long you served:

• Terminated by the employer, contract expiry, or mutual agreement: you receive the full indemnity, with no minimum service requirement. Even a few months of service earns a pro-rata amount.
• Resignation: you must have completed at least 3 years of continuous service to receive anything, and even then the amount is reduced on a sliding scale (see the resignation section below).

What counts toward your service:

• Your probation period counts. Service runs from your first day of work, not from your residence-permit date.
• Authorised leave counts. Annual leave and other legally mandated leave are part of continuous service.
• Fractions of a year are paid pro-rata. If you served seven years and four months, you are paid for the full seven years plus a proportional amount for the extra four months. An employer cannot round your service down to whole years.

Article 51 sets a two-tier accrual for monthly-paid workers:

• First 5 years: 15 days' wage for each completed year.
• After 5 years: one month (30 days') wage for each additional year.

To turn your monthly salary into the daily figure the formula uses, this calculator divides your monthly basic salary by 30. So 15 days is half a month's wage and one month is a full month's wage.

A note on the 26-day month. Many Kuwait employers calculate the daily wage as monthly salary ÷ 26 rather than ÷ 30, on the basis of a six-day working week. That produces a higher daily wage, and therefore a higher indemnity, on the 15-day portion. The statute does not spell the divisor out, so practice varies — if your employer uses a 26-day month, your figure will be a little above what this tool shows. It is worth checking which basis your employer applies.

Salary base. This calculator uses your basic salary only, which is the common practice in Kuwait. Article 51 can be read to include regular allowances, so if your contract or company policy settles the indemnity on full pay, use that figure instead.

Article 51 places a ceiling on the indemnity: the total may not exceed 1.5 years' wage — 18 months of salary. However long you stay, the indemnity stops growing once it reaches 18 months' pay.

The cap only starts to bite after roughly 20 years of service. For example, a worker with 21 years has earned the first 5 years at 15 days (75 days) plus 16 years at 30 days (480 days), a total of 555 days — about 18.5 months, just over the ceiling, so it is trimmed to 18 months. Below about 20 years, the cap never applies.

This is a real difference from neighbours like Qatar and Oman, which have no cap at all. The UAE has a different ceiling (two years' basic salary).

If you resign from an indefinite contract of your own accord, Article 51 reduces your indemnity on a sliding scale tied to your length of service:

• Under 3 years: no indemnity at all.
• 3 to under 5 years: you receive half the indemnity.
• 5 to under 10 years: you receive two-thirds.
• 10 years or more: you receive the full indemnity, with no reduction.

These reductions apply only to a voluntary resignation. If your employer terminates you, your fixed-term contract simply expires, or you both agree to part ways, you receive the full indemnity regardless of length of service.

The termination-bonus myth. A common misconception — repeated by many online calculators — is that Kuwait pays an extra 50% (a 1.5× multiplier) when an employee is terminated. This is not in the law. Termination does not add anything on top; it simply means none of the resignation reductions apply, so you keep the full indemnity. There is no Article-51 "bonus" for being let go. (An earlier version of this site repeated that myth; it has been corrected against the statute.)

All examples use a basic salary of KWD 600 a month, so the daily rate is KWD 600 ÷ 30 = KWD 20.

Example 1 — 4 years, resigned. Four years all fall in the first-5-year band: 4 × 15 = 60 days, or KWD 1,200 gross. Resigning between 3 and 5 years halves it: 1,200 × ½ = KWD 600.

Example 2 — 7 years, resigned. First 5 years: 5 × 15 = 75 days. Years 6–7: 2 × 30 = 60 days. Total 135 days × KWD 20 = KWD 2,700 gross. Resigning between 5 and 10 years pays two-thirds: 2,700 × ⅔ = KWD 1,800.

Example 3 — 7 years, terminated. Same 135 days × KWD 20 = KWD 2,700. Termination pays in full — no reduction, and no multiplier on top.

Example 4 — 22 years, terminated (cap applies). First 5 years: 75 days. Years 6–22 (17 years): 17 × 30 = 510 days. Total 585 days × KWD 20 = KWD 11,700 — but that is 19.5 months, above the 18-month cap, so it is trimmed to 18 × KWD 600 = KWD 10,800.

Your indemnity is usually the largest single line, but your final settlement should also include any other amounts the employer owes you:

• Unused annual leave — paid out at your daily wage for each accrued, untaken day.
• Notice period pay — if the employer ended the contract without giving (or paying in lieu of) the required notice.
• Outstanding wages, overtime, and any contractual end-of-service benefits above the statutory minimum.

Add these to the indemnity to see your total expected payout. The calculator above has an optional section for unused leave and notice so you can see the combined figure.

Your indemnity is due when your employment ends. If your employer delays or refuses to pay:

• Keep your records. Your contract, payslips, and proof of your start and end dates are the evidence your claim rests on.
• File a complaint with the Public Authority of Manpower (PAM). PAM handles private-sector labour disputes and can refer unresolved cases to the labour court.
• Act promptly. Labour claims are time-limited, so do not let a dispute drift — raise it soon after your employment ends.

Use the Kuwait indemnity calculator to get your exact figure first, so you know what you are owed before you raise it.