Payroll management in Kuwait will require strict adherence to Kuwaiti Labour Law, accurately calculating salaries, benefits, and deductions, and paying on time. From salary structures down to indemnity (end-of-service benefits), every payroll detail needs to adhere to government guidelines to avoid any fines or disputes.
At Payroll Middle East, we offer comprehensive payroll services in Kuwait that blend accuracy, confidentiality, and compliance, therefore enabling your company to focus on its growth while we handle all the complexities in payroll and HR processing.
Payroll Compliance in Kuwait
Kuwait does not have a Wage Protection System (WPS) like the one in the UAE, but employers are still required to pay their salaries through approved banking channels and should maintain clear records for inspection.
It must secure the following for each payroll period:
- Kuwaiti Labour Law (Law No. 6 of 2010)
- Social Security and Public Institution for Social Security – PIFSS
- Ministry of Social Affairs and Labour regulations
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Key Components of Payroll in Kuwait
Payroll in Kuwait usually includes the following elements:
- Basic Salary: The fixed amount that is agreed upon in the employment contract.
- Allowances: Housing, transport, and other benefits as per company policy.
- Overtime Pay: Calculated in line with the Labour Law.
- Deductions: which include things like social security contributions or unpaid leave.
- End-of-Service Indemnity: Compulsory for all staff at the end of their contract.
Social Security Contributions (PIFSS)
The social security system of Kuwait applies only to Kuwaiti nationals.
| Employee Type | Employer Contribution | Employee Contribution | Total Contribution |
|---|---|---|---|
| Kuwaiti Employees | 11% | 10.5% | 21.5% |
| Expatriate Employees | N/A | N/A | N/A |
All Kuwaiti employees must be registered to the PIFSS by the employer and paid on a monthly basis.
End-of-Service Indemnity in Kuwait
Article 51 of the Kuwaiti Labour Law provides that every worker shall be entitled to indemnity at the end of his or her service.
Formula for Indemnity:
For monthly paid employees:
- 15 days’ pay for each of the first 5 years of service
- 1 month’s pay for every additional year after 5 years
For daily, weekly, and hourly paid employees:
- 10 days’ pay for each of the first 5 years
- 15 days’ pay for each year after 5 years
The maximum indemnity shall not exceed one and a half years’ total salary.
Why Outsource Payroll in Kuwait
Outsourcing payroll will keep your company compliant while minimizing administrative stress. With Payroll Middle East, you will have:
- Correct calculation of salary, allowance, and deduction
- Comply with Kuwait Labour Law and PIFSS.
- Secure employee data and automated record-keeping.
- Timely salary payments through local banks
- Gratuity and leave calculation as per law
- Expert support for HR and tax compliance
Industries We Serve
We provide payroll solutions for:
- Oil and Gas
- Construction and Engineering
- Healthcare and Education
- Retail and Hospitality
- Financial and IT Services
Our Payroll Process
- Employee Data Setup: Onboarding, contracts, and bank details
- Monthly Payroll Calculation: Salary, overtime, and benefits
- Statutory Deductions: Social security for nationals and other deductions
- Payslip and Bank File Generation
- Reports and Audit Support
Frequently Asked Questions
Simplify payroll in Kuwait
Payroll management in Kuwait need not be complicated. Payroll Middle East provides professional, compliant, and confidential payroll services in Kuwait, custom-made for your business. From salary calculations to indemnity and legal filings, we make payroll stress-free and accurate every month. To find out how our payroll experts in Kuwait can help your company stay compliant and efficient, contact us today.
