Kuwait offers many opportunities for companies looking to expand. If you are just getting started or need to get control of operations in Kuwait, there are many payroll and statutory regulations to manage employees and labor compliance.

Payroll and Tax Considerations:

  • The minimum wage is set by the Ministry of Labor and Social Affairs once every 5 years. The current minimum wage is KWD 60 per month
  • Employees are paid 125% of regular hourly wage for overtime. If overtime occurs on a holiday the employee is paid 200% of the regular hourly wage
  • Severance is paid to employees who are dismissed for certain reasons
  • There is no income tax on employee salaries

HR and Statutory Requirements

  • Employees begin accruing paid leave after 6 months of service. Employees in the private sector receive 30 days of paid annual leave
  • Sick leave ranges from 15 days full pay to after 30 days without pay. Employers are liable to pay for sick leave
  • Female employees are entitled to 70 days of maternity leave. 30 days can be taken before childbirth. The employer is responsible for paying 100% of the employee earnings during this time
  • There are no provisions for paternity leave in Kuwait
  • The retirement age is 55. To be eligible for basic retirement pensions, employees must have made contributions for at least 15 years
  • The retirement pension is 65% of the employee monthly salary. This increases by 2% for each year of service exceeding 15 years, up to a maximum of 95% of monthly salary

Holidays in Kuwait

  • January 1 – New Year’s Day
  • February 25 – National Day
  • February 26 – Liberation Day
  • March 1 – Isra and Miraj
  • May 3 – Eid al-Fitr
  • May 4 – Eid al-Fitr holiday
  • May 5 – Eid al-Fitr holiday
  • July 9 – Waqfat Arafat Day
  • July 10 – Eid al-Adha
  • July 11 – Eid al-Adha holiday
  • July 12 – Eid al-Adha holiday
  • July 30 – Islamic New Yaer
  • October 8 – The Prophet’s Birthday

Although there is no payroll tax in Kuwait, the government uses a source taxation method, meaning that tax is imposed on the Kuwaiti-source income, and a tax liability can also arise from work not considered taxable in many other countries and jurisdictions. The source of income is considered Kuwaiti if the performance of services are in in Kuwait. Even work performed outside of Kuwait is taxable if the contract involves any activity in Kuwait. The entire revenue from transactions may be taxable if there is any significant presence of employees or short-term visits to Kuwait by representatives of a company.

Blue Marble has created a cloud-based global payroll platform with aggregated monthly reporting to provide real-time access to your payroll across all countries and currencies. We simplify payroll and compliance with integrated HR tools and resources. Our dedicated US-based service team and direct access to in-country experts are here to help when questions come up. To simplify your payroll in Kuwait, talk to our team click here to get started