Labor Law

Kuwait Employment Contract

Employers in Kuwait are required to provide each employer with a written employment contract and must provide a copy of each contract to the government. The contract should include all relevant details of the employment agreement, be written in Arabic, and use the Kuwaiti dinar currency.

Fixed Term

Indefinite

Kuwait Working Hours

The normal working week in Kuwait is 40 to 48 hours, divided into five days. Friday and Saturday are usually days off, but some companies use Thursday and Friday. Working hours are reduced during Ramadan (six hours a day).

Holiday Policy

Kuwait Vacations

Employees in Kuwait are entitled to 30 days of paid leave after nine months of employment with the company. In addition, employees who have worked for their employer for two years are entitled to a one-time religious pilgrimage period of 21 days.

Kuwait Sick Leave

Employees in Kuwait are entitled to paid sick leave if they provide a medical certificate as proof of illness. The first 15 days of absence are full pay, then the pay is reduced to 75% for the next ten days, 50% for the next ten days and 25% for the next ten days. The last 30 days are unpaid.

Employee Severance Pay and Termination of Contract in Kuwait

Employees in Kuwait are generally entitled to three months' notice before terminating their contract. In addition, they are generally entitled to 15 days of severance pay per year for five years and 30 days for each year beyond five years. Severance pay is up to one and a half years' salary.

The trial period in Kuwait is limited to 100 days.

Dismissal and Severance in Kuwait

Employees in Algeria are generally entitled to give their employer five days' notice of termination per year, subject to a maximum of 30 days.

Workers on probation are not entitled to this notice period, which may last from 6 to 12 months, depending on the position.

Employees who have been with the employer for more than two years usually also receive severance pay equal to 15 days' salary per year, capped at three months.

For companies expanding overseas for the first time, dealing with employee layoffs and dealing with severance packages can be complicated. Remoly's Algerian PEOs can reduce risk for foreign companies and provide guidance during the process.

Kuwait Tax Laws

Both employees and employers in Kuwait are required to spend a certain percentage of their wages on social security. Employees pay 7.5% and employers pay 11%.

Kuwait does not impose personal income tax on employees.

Kuwait's corporate tax is 15% in most cases. In addition, there is a 1% religious tax called zakat.

Health Insurance in Kuwait

Employers of Kuwaiti nationals are entitled to free health care. Expats are required to contribute to the national health insurance scheme and can also obtain private insurance on their own or through an employer.

Salary and Benefits

Kuwait’s Compensation Law

Minimum wages in Kuwait vary depending on the type of worker. For example, the minimum wage for domestic workers is 60 dinars per month and for private sector workers is 75 dinars per month.

Benefits Administration in Kuwait

Setting up an employee benefits system for employees in Kuwait can be difficult. Complex regulations and organizations can require significant time, effort and investment from employers.

Outsourcing your benefits administration processes ensures you fully understand and follow the rules, guaranteeing your compliance and significantly speeding up the process. At Horizon, our Kuwait employment experts will help you find and arrange your benefits, advise on your strategy, and ensure compliance with the law.