1. Administering Payroll for Kuwait
  2. Gratuity Entitlement and Payment for Kuwait

Gratuity Entitlement and Payment for Kuwait

Let's walk through the details on gratuity entitlement and payment for various categories.

Government and Private Company

An employee is entitled to half a month's salary for the first 5 years and 1 month's salary for each additional year.

Let's go through the rules of gratuity payment:

  • If the employee is dismissed by the employer or is terminated during probation period, then no gratuity is paid.

  • If the employer terminates the employee, the employee is paid the complete gratuity that they're entitled to.

  • If the contract type is Unlimited and the employee has resigned before completing 3 years of service, then no gratuity is paid. If the employee has completed between 3-5 years, half the gratuity amount is paid. If the employee has completed between 5-10 years, two-third the gratuity amount is paid. If the employee has completed more than 10 years, the complete gratuity amount is paid.

  • If the contract type is Fixed and the employee has completed 3 years of service, complete gratuity is paid upon termination.

  • The total amount paid should not be greater than 1.5 times the annual salary.

Oil Company

An employee is entitled to 1 month's salary for the first 5 years and 1.5 month's salary for each additional year.

Here are the rules of gratuity payment:

  • If the employee is dismissed by the employer or is terminated during probation period, then no gratuity is paid.

  • If the employer terminates the employee, the employee is paid the complete gratuity that they're entitled to.

  • If the contract type is Unlimited and the employee has resigned before completing 2 years of service, then no gratuity is paid. If the employee has completed between 2-5 years, half the gratuity amount is paid. If the employee has completed between 5-10 years, three-fourth the gratuity amount is paid. If the employee has completed more than 10 years, the complete gratuity amount is paid.

  • If the contract type is fixed and the employee has completed 2 years of service, complete gratuity is paid upon termination.

  • The total amount paid should not be greater than 1.5 times the annual salary.

Gratuity Payment Exception for Women

A female worker is entitled to full gratuity if she voluntarily resigns (voluntary termination) within 6 months of her marriage. If the marital status change date is less than 6 months before the date of termination, gratuity will be calculated based on the total length of service for the sector, irrespective of the type of contract.

Starting 1st January 2013, an employer can opt to pay a reduced or nil gratuity amount based on the social insurance contributions paid by the employer for an employee.

If the gratuity payment is based on the social insurance contributions paid by the employer, then the amount of those contributions are taken into account after the gratuity payment has been calculated using the eligibility criteria.

If the social insurance contributions paid by the employer are:

  • Less than the gratuity payment, then the difference between the contributions and gratuity is paid to the employee as a gratuity payment.

  • More than or equal to the gratuity value, then no gratuity payment is made.

Kuwait Employer Gratuity Details is enhanced to capture additional information. The Gratuity Payment element is enhanced to capture additional attributes. The corresponding balances are predefined to view the eligible gratuity allowance and employer social insurance contributions on the SOE.