Payroll and Benefits Guide - Kuwait

Kuwait
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Currency

Kuwaiti Dinar (KWD)
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Capital

Kuwait City
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Employer Taxes

12.00%
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Date Format

dd/mm/yyyy
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Fiscal Year

1 April – 31 March

Fun Facts

The official name of Kuwait is the State of Kuwait, and the capital city is Kuwait City.

Kuwait has a desert climate, characterized by extremely hot summers and relatively mild winters.

The Liberation Tower in Kuwait City is one of the country’s iconic landmarks. Standing at 372 meters.

The Kuwaiti dinar is the highest-valued currency in the world.

Kuwait is known for its vast oil reserves.

Pearl diving was once a major industry in Kuwait.

Kuwait

Contributions

Employee Payroll Tax

Contribution TypeRate
Social Security2.50%
Pensions8.00%
Unemployment0.5%

Employer Payroll Tax

Contribution TypeRate
Pension11.50%
Unemployment0.5%

Payroll

Payroll Cycle

Wages may be paid on an hourly, daily, weekly, monthly, or project-by-project basis. In accordance with the following guidelines, wages must be given to employees on one of their regular working days at their place of employment in legal tender:

  • At least once a month, the employer is required to pay employees according to a monthly pay plan.
  • The employer must pay hourly workers, day laborers, weekly wage earners, and project-based workers at least once every two weeks.

13th Salary

The law in Kuwait does not make any provisions for a 13th pay.

Work Hours and Week

In Kuwait, the length of the workweek varies from 40 to 48 hours, depending on the corporate policy. Typically, offices are open from 8:30 am to 5:30 pm or 6:00 pm.

Legally, all employees should be subject to a six-hour workday during Ramadan, but many businesses only enforce it for Muslims who fast throughout the day. The Muslim holy day of repose is Friday. The second day off for those who work a five-day week can be either Thursday or Saturday, with Saturday being the more common option.

Overtime

The Kuwait Labor Law’s Articles 66, 67, and 68 govern how overtime is handled in that country. There shouldn’t be more than two hours of overtime every day, three days a week, or ninety days a year.
Kuwait

Leave

Paid Time Off

After one year of service, employees are eligible for 30 days of paid leave per year.

Additionally, a worker who has been employed by the same company for two years in a row is entitled to 21 days of paid time off to do the Al-Hajj (only possible once in a lifetime).

Public Holidays

There are 8 public holidays consisting of 13 days off in Kuwait.

Sick Days

The following rate of sick pay is available to employees who have been working for at least one month.

  • 15 full-paying days
  • 10 days at 3/4 pay
  • 10 days at half pay
  • 10 days with a 1/4 pay
  • 30 unpaid days

Government health insurance is a requirement for all employees.

Maternity Leave

Employees who are pregnant are entitled to 70 days of paid maternity leave, which can start 30 days before their due date and end 40 days following delivery.

Following the completion of their maternity leave, the employee is eligible to request up to four more months of unpaid leave.

Paternity Leave

In Kuwait, paternity leave is not mandated by law.

Parental Leave

In Kuwait, parental leave is not mandated by law.

Termination

Termination Process

A fixed-term contract may be terminated by the employer for any of the following reasons: business, personal, or employee misconduct.

Termination is subject to written notice and justification. If the cause is misconduct, the employee must be warned and given the chance to defend their actions.

Notice Period

In Kuwait, both the employer and the employee are required to give a three-month notice period.

Severance Pay

In Kuwait, severance pay is based on the employee’s length of service.

For the first five years of employment, employees who are paid monthly are entitled to 15 days of pay; after that, they are entitled to one month of pay up to a maximum of 1.5 times the yearly income.

Employees who are paid by the hour, the day, or the week are entitled to 10 days of pay for every year they work for the company up to five years, and fifteen days for every additional year, up to a maximum of one year of pay.

Probation Period

Probation Period

An employee’s probationary period in Kuwait is limited to 100 days.

Immigration

Employers of foreign nationals have few options under Kuwait’s immigration system. The financial services sector is the largest non-petroleum industry in the region, while the petroleum-based industry dominates Kuwait’s open economy.

Visitors on business may obtain a commercial visit visa sponsored by a Kuwaiti organization. Certain nations may qualify for visit visas sponsored by hotels or visas issued at the airport.

The government of Kuwait greatly encourages the employment of Kuwaiti citizens while severely restricting the hiring of foreign nationals. Foreign nationals in the public sector are being replaced by Kuwaitis under recent nationalization initiatives.

Foreign nationals must seek work and residency permits as well as an entry visa as part of the immigration procedure. Local support is required.

VAT

VAT is not applied in Kuwaiti territory.