Kuwait: A Guideline to Payroll and Employer of Record

Establish your presence globally with Neeyamo as we help you go beyond borders to manage your international payroll and hire new talent in Kuwait.

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Apart from the world's highest-valued currency, Kuwait still has several noteworthy attributes. Its abundant oil reserves fuel its economy and drive a substantial demand for the Kuwaiti dinar, surpassing even other countries with robust currencies. A strong currency and its economic stability and growth make Kuwait a strategic gateway for global expansion.

Do your organization's expansion plans require you to hire employees in Kuwait? Do you lack a physical entity in the country – a key requisite to hiring local talent? Neeyamo assists organizations worldwide with onboarding and managing employees in Kuwait, processing payroll and tax services, managing local compliance requirements, benefits, and more. 

Tools And Instances

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Global Payroll

Neeyamo’s global payroll solution covering 180+ countries

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Global Work

A tech-based EOR solution to manage your extended workforce

Facts And Stats


Kuwait City 


Kuwaiti Dinar 

Official Language


Fiscal Year

1st April – 31st March 

Date Format


Country Calling Code

+ 965

Time Zone

UTC +03:00

Global Payroll


How is Payroll done? 

Handling payroll for a widespread workforce can pose a significant challenge for any organization, and the added complication of compliance can make things worse. If companies spend more time processing payroll, it directly impacts day-to-day operations and their overall productivity.

Over the years, Neeyamo has observed these complexities and strived to provide a global payroll solution through a single technology platform - Neeyamo Payroll

How is Payroll accounting done?

Payroll accounting is the systematic compilation and documentation of all employee payment and compensation records. An efficient system and knowledge of tax regulations and laws in the specified country are necessary to establish a smooth payroll process.

What is Payroll Tax? 

Payroll tax is the percentage amount retained from an employee's salary and paid to the government to invest in the general population's welfare. These are statutory in nature and are levied from both the employer and employee. Additional statutory contributions are made by employers towards aiding both short-term and long-term benefits for their employees. 

Payroll Taxes

Payroll tax is the percentage amount retained from an employee's salary and paid to the government to invest in the general population's welfare. These are statutory in nature and are levied from both the employer and employee. Additional statutory contributions are made by employers towards aiding both short-term and long-term benefits for their employees.

Employee Taxes

Social Security - 10.5% 

No personal income tax (PIT) is imposed on individuals in Kuwait.

Employer Taxes

Social Security - 11.5% 

Payroll Cycle


Undoubtedly, payroll is a critical process for any organization. The pay cycle in Kuwait refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.


Employers must pay workers at least every two weeks, but some can receive monthly remuneration. Payments must be made within seven days of the end of the pay period. 

13th Month Cycle

According to the law, there are no provisions to provide a 13th salary. 

Global Work


An Employer of Record (EOR) service provider helps you eliminate the hassle of handling complexities while onboarding a new employee in an international location. They help bridge the gap that otherwise mandates organizations to have a local registered entity and a local bank account, prior to making a job offer to an international hire.

An EOR service provider acts as a legal employer, facilitates salary payments, and manages other statutory requirements such as health insurance, payroll taxes, and employee benefits ensuring compliance with local tax laws and regulations.

This allows organizations to focus on collaborating with the employee in Kuwait for operational tasks, with the knowledge that they have a cost-effective solution to support their global payroll and HR requirements, as they continue their global expansion.

HR Mandates and Practices

Minimum Wage

Kuwait's minimum wage is 75 Kuwaiti dinars per month. 


Overtime work should be at most two hours a day and, a maximum of 180 hours a year, and three days a week or 90 days a year. Workers are entitled to 25% additional remuneration per hour of overtime worked.  

Employers must pay employees who work on a day off an additional 50% of normal remuneration and give the employee a different day off. The traditional day of rest is Friday. 

Data Retention Policy

Kuwait has no guidance on recordkeeping requirements for social taxes. The government does not assess any other taxes on employment income. 
Kuwait's compensation and benefit recordkeeping laws could not be confirmed. 

Hiring and Onboarding Requirements


When employers hire workers in Kuwait, they must follow anti-discrimination laws. Employers must comply with Kuwait's legal standards as a firm. According to the country's constitution, everyone has the right and duty to labor. As a result, when businesses want to hire an employee, there should be no distinction between prospects. This means an employer cannot recruit someone based on gender, religion, language, or national origin.  


Onboarding document Expat: 

  • Employees' personal information (Name, DOB, Address) 
  • National ID 
  • Work permit 
  • Copy of passport (not less than two years from the expiration date) 
  • Authenticated copies of educational certificates/ University degree 
  • Police clearance certificate from their country of residence.  


The probation period of the worker shall be specified in the work contract, provided that it shall not exceed 100 working days. Either party may terminate the contract during the probation period without notice. If the employer makes the termination, he shall pay the worker's end-of-service benefit for the period of work in accordance with the provisions of this Law.  
The worker shall not be on probation for the same employer more than once. The Minister shall issue a resolution to organize the conditions and regulations of work during the probation period. 


National Holidays

The fully-paid official holidays are as follows:

  • January 1: New Year's Day
  • February 18: Isra and Miraj
  • February 25: National Day
  • February 26: Liberation Day
  • April 22 - 24: Eid al-Fitr
  • June 28: Arafat Day
  • June 29 to July 1: Eid Al-Adha
  • July 19: Islamic New Year
  • September 27: The Prophet's Birthday

If the worker is required to work during any of the above-mentioned holidays, he shall be entitled to double remuneration and an additional day off.  

Sick Leave

The worker shall be entitled to the following sick leaves during the year: 

  • 15 days – at full pay 
  • 10 days – at three-quarters of the pay 
  • 10 days – at half pay 
  • 10 days – at quarter pay 
  • 30 days without pay. 

The worker shall provide a medical report from the doctor appointed by the employer or the doctor of the government medical center. In the event of a conflict regarding the necessity of sick leave or its duration, the report of the government doctor shall be adopted. 

Maternity Leave

Employers must provide women with 70 days of paid maternity leave. Employers may also give women, upon request, an additional four months of unpaid maternity leave. After giving birth, women may take up to two hours daily to feed their children. Employers must offer daycare services to children ages four and younger if they employ at least 50 women or at least 200 employees. 

Annual Leave:  

The worker shall be entitled to a paid annual leave of at least 30 working days. However, the worker shall not be entitled to a leave for the first year except after at least six months of service for the employer. 

Weekends, official holidays, and sick leaves falling during the annual leave shall not be counted as annual leave. The worker shall be entitled to a leave for the fractions of the year in proportion to the period he spent in work, even the first year of service. 

Other Leave

Academic Leave: 

The employer may provide the worker with compensated academic leave to pursue a higher degree in their field of work, provided that the worker works for the employer for the duration of the academic leave. 

That should be five years at most. If the worker violates this condition, he must reimburse the payment paid to him during the leave in proportion to the remaining duration of employment. 

Al Haji Leave: 

If an employee has yet to perform Al-Hajj before, employers must grant them 21 days of paid leave to perform the pilgrimage, provided the employee has been in service for at least two years. 

Bereavement Leave:  

Employers must provide employees with three days of leave in case of a first-degree or second-degree relative's death. 

Iddat leave: 

A Muslim working woman whose husband has died is entitled to four months and ten days of fully compensated iddat leave from the date of death. During this leave, the working woman cannot work for another employer. The Minister shall organize the criteria for granting this leave.  

A non-Muslim working woman whose husband has died is entitled to 21 days of paid leave. 

Paid Leave: 

The employee is entitled to a paid absence from work to attend conferences, annual gatherings, and labor meetings. 

The terms and guidelines regulating granting such leave must be outlined in a resolution issued by the Ministry. 

Unpaid Leave: 

The employer may grant his worker, upon his request, an unpaid leave other than the leaves mentioned in Kuwait Labor Law. 


Notice period

Employers and employees terminating an employment relationship must provide the following notice: 

  • three months in advance for an employee earning a monthly salary; 

  • one month in advance for all other workers. 

Severance pay

The worker shall be entitled to an end-of-service benefit as follows:  

a. The worker shall be entitled to 10 days of remuneration for each of the first five years of service and 15 days for each year after that. The end-of-service benefit shall not exceed one-year remuneration for employees paid daily, weekly, hourly, or piecework.  

b. The worker shall be entitled to 15 days of remuneration for each of the first five years of service and one month for every year after that. The end-of-service benefit should not exceed one and a half year of remuneration for employees who are paid monthly. 



Nationals of GCC member countries (Gulf Cooperation Council, consisting of Kuwait and Bahrain, Oman, Qatar, Saudi Arabia, and the United Arab Emirates) do not require visas to visit Kuwait. Some nationals, including U.S. citizens, can receive visas upon arrival in Kuwait. However, workers must apply for a resident visa sponsored by a company in Kuwait before traveling to Kuwait. GCC nationals do not have to apply for special visas to work in Kuwait.  

Workers must also apply for a work permit from the Ministry of Social Affairs and Labor in Kuwait. The work permit must be submitted to the General Directorate of Migration before a resident visa can be finalized, which will occur once a foreign worker arrives in Kuwait. 

Employee Background Checks

Legal and Background Checks

Law: The Kuwait authorities' background checking and pre-employment screening level varies according to the individual's nationality. However, foreign employees must receive prior approval from the Public Authority for Manpower (PAM) and immigration authorities before being hired. 

Allowed: Employers cannot obtain the same level of information from background checks as they can in other jurisdictions – employees will be required to provide this information themselves. 

Last updated on October 3, 2023

If you have any queries or suggestions, reach out to us at irene.jones@neeyamo.com

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