Payroll and Benefits Guide Kuwait

Employer

Employer Payroll Contributions

Employee

Employee Payroll Contributions

Employee

Employee Income Tax

There is no personal income tax in Kuwait.

General

In Kuwait, minimum wages vary depending on the job role; for example, the minimum wage is 75 KWD per month in the private and oil sectors.

Payroll Cycle

The payment of wages may be determined per hour, per day, per week, per month, or per project. Wages shall be paid on one of the official working days and at the workplace of the employees, in the currency legally in circulation, subject to the following provisions:

• The employer shall pay employees on a monthly pay schedule at least once per month
• The employer shall pay hourly employees day laborers, employees on a weekly wage or on a project basis at least once every two weeks

13th Salary

There are no provisions in the law in Kuwait to provide a 13th salary.

General

The working week in Kuwait varies between 40 and 48 hours, depending on the company’s policy. Office hours are usually from 8:30 am, or 9:00 am to 5:30 pm or 6:00 pm.

During the month of Ramadan, the work day is reduced to six hours, and legally this should apply to all staff, but many companies only apply it to Muslims, who fast during daylight hours. In addition, Friday is the Muslim rest day. For those working a five-day week, the other rest day can be either Thursday or Saturday, with Saturday being the more popular choice.

Overtime

Overtime in Kuwait is managed in accordance with Articles 66, 67, and 68 of the Kuwait Labor Law. The maximum overtime should not exceed 2 hours per day, three days per week, or 90 days per year.

• Article 66 states that overtime worked during regular working days should be paid at 125.00% of the standard salary rate of pay.
• Article 67 states that overtime worked at a weekend should be paid at a rate of 150.00% of the regular salary rate of pay, plus an additional day off in lieu/paid.
• Article 66 states that overtime worked on a public holiday should be paid at a rate of 200.00% of the regular salary rate of pay, plus an additional day off in lieu/paid.

Overtime

Overtime in Kuwait is managed in accordance with Articles 66, 67, and 68 of the Kuwait Labor Law. The maximum overtime should not exceed 2 hours per day, three days per week, or 90 days per year.

• Article 66 states that overtime worked during regular working days should be paid at 125.00% of the standard salary rate of pay.
• Article 67 states that overtime worked at a weekend should be paid at a rate of 150.00% of the regular salary rate of pay, plus an additional day off in lieu/paid.
• Article 66 states that overtime worked on a public holiday should be paid at a rate of 200.00% of the regular salary rate of pay, plus an additional day off in lieu/paid.

Working Week

Sunday-Thursday

Paid Time Off

Employees are entitled to 30 days paid leave per year, following completion of one year of service.
In addition, an employee working for the same employer for two consecutive years is entitled to 21 days leave with pay to perform Al-Hajj, (only possible once in a lifetime).

Public Holidays

8 public holidays consisting of 13 days off.

Sick Days

Employees who have been employed for at least one month are entitled to receive paid sick pay at the following rate.

• 15 days at full pay
• Ten days at ¾ pay
• Ten days at 1/2 pay
• Ten days at 1/4 pay
• 30 days unpaid

It is mandatory for all employees to be provided government medical insurance.

Maternity Leave

Pregnant employees are entitled to 70 days of paid maternity leave, 30 days before the due date, and 40 days after they give birth.
Employee may request up to four additional months unpaid leave following the end of their maternity leave.

Paternity Leave

There is no statutory paternity leave in Kuwait.

Parental Leave

There is no statutory parental leave in Kuwait.

Other Leave

Employees are entitled to up to 3 days of bereavement leave for the death of a member of their immediate family.
A Muslim woman whose husband dies is entitled to a fully paid leave for four months and ten days. A non-Muslim woman whose husband dies is entitled to a fully paid leave of 21 days.

Termination Process

Employers can terminate a fix term contract for the following reasons – business, personal or worker’s’ misconduct. Termination requires notice and a written explanation. If the reason is misconduct, a warning needs to be given and the employee gets a chance to explain their actions.

Notice Period

In Kuwait, there is a requirement for three months’ notice to be provided by both the employer and the employee.

Severance Pay

Severance pay in Kuwait is dependent on the length of service of the employee.

Employees paid monthly are entitled to 15 days’ pay for each year of employment for the first five years of service, increasing to one month per year of service after that up to a maximum of 1.5 times the annual salary.

Employees paid by the hour, day, or week are entitled to receive ten days’ salary for each year of employment at the company up to 5 years, and 15 days for each year after that, up to a maximum of 1 year of salary.

Probation Period

In Kuwait, an employee’s probation period can be no longer than 100 days.

VISA

Kuwait’s immigration system provides limited options for employers of foreign nationals. The petroleum-based industry dominates Kuwait’s open economy, and financial services are the largest non-petroleum industry in the region.

Business visitors may secure a commercial visit visa sponsored by an entity in Kuwait. Travelers of certain nationalities may be eligible for visas-on-arrival or hotel-sponsored visit visas.

The employment of foreign nationals in Kuwait is heavily restricted, and the government strongly promotes the employment of Kuwaiti citizens. Recent nationalization policies focus on replacing foreign nationals with Kuwaitis in the public sector.

As part of the immigration process, foreign nationals must secure an entry visa and obtain work and residence permits. Local sponsorship is mandatory.

General

Kuwait does not impose VAT in its territory.