Kuwait EOS Gratuity (2026): 15 Days & Calculation Rules

End-of-service indemnity (gratuity) is the main severance benefit in Kuwait's private sector — and for most expat workers it is the closest thing to a pension, since the Public Institution for Social Security (PIFSS) covers only Kuwaiti nationals. The detailed formula and resignation penalties in Articles 51 and 53 matter because small differences in years of service change the payout dramatically.

• Who qualifies. All private-sector employees (Kuwaiti and expat) not covered by the PIFSS Social Security Law, with at least 1 year of continuous service. Under 1 year of service = no gratuity.
• Calculation basis (Articles 55 and 62). Gratuity is based on your last TOTAL wage, not basic salary alone. Article 55 defines the wage as the basic salary plus every element stipulated in your contract or the employer's rules, and states that allowances, remunerations, commissions, grants and other cash privileges you receive periodically are included in the calculation of the wage. Article 62 then says that when calculating your dues, the last salary paid to you is the one that counts. Regular housing and transport allowances therefore belong in the base. Many employers settle on basic salary only — that is a compliance failure to raise with PAM, not a different reading of the law.
• The daily rate: divide by 26, not 30 (Article 67). Article 51 states the first five years as a number of days' wage, and the law never prints a divisor, so Article 67 supplies it: your dues, including your daily wage, are calculated by dividing your salary by the number of actual working days, without counting your weekly rest days — even though those rest days are paid. Article 67 also fixes the week at one rest day after every six worked days, so a 30-day month contains roughly 26 actual working days. Dividing by 30 prices your paid rest days as if you had worked them and understates the first-five-years tier by about 15%.
• Monthly-wage workers (Article 51, Clause II). Years 1–5: 15 days' wage per year. Each year beyond year 5: 1 full month's wage per year — the statute changes unit here, saying "one month salary" rather than thirty days' wage, and at a 26-day divisor those are not the same amount. The total is capped at 18 months of wage.
• Daily, weekly, hourly, or piecework workers (Article 51, Clause I). Years 1–5: 10 days' remuneration per year. Each year beyond year 5: 15 days per year. Total capped at 12 months. For daily workers, "remuneration" is the average daily earning over the last 3 months of actual working days.
• Resignation penalties (Article 53). If you resign: under 3 years = zero gratuity; 3 to under 5 years = ½ (50%) of full gratuity; 5 to under 10 years = ⅔ (66.7%); 10+ years = full gratuity.
• Termination by the employer. If you are dismissed (other than Article 41 gross misconduct), you receive the full gratuity regardless of how many years (as long as you have at least 1 year of service).
• Service period rules. Unpaid leave days are excluded from service length. Paid maternity leave and paid sick leave count as service. A female employee who terminates within 1 year of her marriage date receives the full gratuity.
• Domestic workers. Covered by Law 68/2015, not Article 51 — they receive 1 full month's salary per year of service, which is often better than the Article 51 tiered formula for the first 5 years.
• Forfeiture (Article 41). The employer may withhold gratuity only for narrowly defined gross misconduct — for example, fraud, or disclosure of trade secrets causing major financial loss.
• Payment deadline. Gratuity must be paid promptly upon termination along with any unpaid wages and leave cash-out.

Worked example. Priya is a monthly-salaried accountant. Her basic salary is KD 700/month and she receives a fixed KD 100/month transport allowance, so her total wage under Article 55 is KD 800/month. She completes 7 years of service and resigns. Her daily wage is KD 800 ÷ 26 = KD 30.77. Years 1–5: 5 × 15 × KD 30.77 = KD 2,307.69. Years 6–7 (2 years at one month's wage each): 2 × KD 800 = KD 1,600. Full gratuity = KD 3,907.69. Because she resigned at 5–10 years of service, Article 53 reduces this to ⅔ × KD 3,907.69 = KD 2,605.13. If instead Priya had been terminated by the employer at the same 7-year mark, she would have received the full KD 3,907.69.

Where employers shave it. An employer who used Priya's basic KD 700 instead of her KD 800 total wage, and divided by 30 instead of 26, would reach KD 1,750 + KD 1,400 = KD 3,150 accumulated, and pay her KD 2,100 after the Article 53 reduction — around KD 505 less than she is owed. Both errors are worth checking separately, because employers frequently make only one of them.