Employer of Record in Kuwait

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

Businesses can only operate smoothly in Kuwait if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Kuwait below, to avoid any compliance issues.

Employment Contract Requirements

Employing individuals in Kuwait requires adherence to specific hiring formalities due to unique characteristics in the labor market. Businesses should consider the following when crafting employment contracts:

• Language of the Contract should be in Arabic and English
• The company's disciplinary codes
• The employees ordinary working days and work hours
• Salary and benefits

Onboarding Process

We can help you get a new employee started in Kuwait quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations. For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Kuwait

The working week in Kuwait varies between 40 and 48 hours, depending on the companys policy. The work week typically runs from Sunday to Thursday with Friday and Saturday as rest days.

Overtime in Kuwait

Overtime in Kuwait adheres to the regulations outlined in Articles 66, 67, and 68 of the Kuwait Labor Law. The permissible limit for overtime work is set at a maximum of 2 hours per day, limited to three days per week or 90 days annually.

Probation Period in Kuwait

In Kuwait, an employees probation period can be no longer than 100 days.

As of May 1, 2025, Kuwait's minimum wage rates are as follows:

• Private Sector Workers (Kuwaiti nationals and expatriates): 75 Kuwaiti Dinars (KWD) per month (approximately USD 248)
• Domestic Workers: 60 KWD per month (approximately USD 198)

The Kuwaiti government reviews and adjusts the minimum wage every five years, as stipulated by the Labour Law for the Private Sector (Law No. 6 of 2010).

While the minimum wage in Kuwait is relatively modest compared to global standards, it is important to note that Kuwait does not impose personal income taxes, which can offset the lower wage levels. Additionally, the cost of living in Kuwait is generally lower than in many Western countries, which may influence the adequacy of the minimum wage for local workers.

Setting up a local legal entity in Kuwait can be time-consuming and expensive. It often involves complex paperwork, local representation, banking, registrations, and ongoing tax filings, which isn't cost-effective if you're simply looking to hire a few employees or test the market. An Employer of Record removes these barriers entirely. Instead of spending months establishing a presence, an EOR lets you hire and onboard employees within days while staying fully compliant.

This enables faster market entry and greater agility. Whether you’re launching a pilot program, supporting a regional client, or adding specialized talent, you don't need to commit to long-term infrastructure to explore new business opportunities. The EOR handles local employment logistics while you retain day-to-day oversight of your hires. This model lets you scale up or down based on business needs, giving you more flexibility with less overhead and risk.

In Kuwait, while employees don’t pay income tax, employers still shoulder important payroll-related obligations. The key responsibility lies in contributing to the Public Institution for Social Security (PIFSS) for Kuwaiti and GCC nationals. Employers must ensure accurate registration, reporting, and timely payments to stay compliant and avoid penalties.

Key employer obligations include:

• Social Security (PIFSS): 11.5% employer contribution on salaries up to KWD 2,750.
• Employee contributions: 8% of salary, plus an extra 2.5% on the first KWD 1,500.
• Payment deadline: Contributions due by the 15th of the following month.
• Expatriates: Exempt from PIFSS, but must be properly classified to prevent compliance issues.
• Corporate tax: 15% on profits for foreign-owned entities.
• Withholding on contractors: 5% retained until a tax clearance certificate is provided.

Together, these costs typically add around 12% to total employer payroll expenses. Using payroll software or an Employer of Record (EOR) can streamline reporting and ensure compliance with Kuwait’s complex payroll requirements.

One of the biggest risks in global hiring is payroll mismanagement. In Kuwait, even small errors in tax reporting or social contribution payments can trigger audits, fines, or reputational damage. For companies without in-country expertise, the risk isn’t worth taking. An Employer of Record removes this burden by owning the legal responsibility of payroll, executing every step with built-in compliance.

Key Ways an EOR Supports Payroll in Kuwait:

• Mitigates Compliance Risk: Oversees all legal obligations for payroll, tax filings, and recordkeeping.
• Local Regulatory Expertise: Interprets and applies Kuwait’s latest labor and tax changes in real time.
• Free Processing: Reduces mistakes in wage calculations and reporting through built
• Payroll Record Management: Maintains compliant payroll audit trails and documentation for each employee.

In Kuwait, work permits and visas are essential for employers hiring foreign workers. The process involves securing a No Objection Certificate (NOC) issued by the Public Authority of Manpower, submitting work permit applications, and meeting specific eligibility requirements such as medical examinations and security clearances.

The primary visa categories include the Employment Visa (Article 18) for private sector employees, Government Project Visa (Article 17) for government project workers, and Domestic Servant Visa for household staff. Employers must navigate the kafala system, budget for associated fees, and ensure compliance with Kuwaiti labor laws to successfully sponsor and retain international employees.

As of July 2025, private sector foreign workers are required to obtain an employer-approved exit permit prior to leaving the country regardless of the duration of their stay outside Kuwait, though domestic workers are exempt from this requirement.

Mandatory Leave Entitlement in Kuwait

The annual leave entitlement in Kuwait is 30 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Kuwait

Kuwait has 9 mandatory national holidays in a year.

Paid Time Off in Kuwait

Employees in Kuwait are entitled to 30 days of paid leave per year after completing 9 months of service. Additionally, employees working for the same employer for two consecutive years are entitled to 21 days of paid leave to perform Al-Hajj, which is only possible once in a lifetime.

Maternity Leave In Kuwait

Pregnant employees in Kuwait are entitled to 70 days of paid maternity leave, with 30 days granted before the due date and 40 days after giving birth. Additionally, employees may request up to four additional months of unpaid leave following the end of their maternity leave.

Paternity Leave In Kuwait

In Kuwait, there is no statutory provision for paternity leave under the current labor laws.

Sick Leave In Kuwait

Employees in Kuwait who have been employed for at least one month are entitled to receive paid sick pay at the following rates:

• 15 days at full pay
• 10 days at 3/4 pay
• 10 days at 1/2 pay
• 10 days at 1/4 pay
• After exhausting these paid sick leave days, employees are entitled to an additional 30 days of unpaid sick leave.

Parental Leave In Kuwait

Kuwait does not have a separate parental leave policy that allows parents to share or divide leave entitlements between them.

Bereavement Leave

Employees are entitled to up to 3 days of bereavement leave for the death of a member of their immediate family (first and second degree relations).

In Kuwait, benefits play a central role in attracting and retaining top talent. Employees often expect more than just a paycheck – they're looking for stability, healthcare coverage, pension plans, and other perks that show a company is invested in their well-being. If you're not familiar with what’s standard or required, you risk falling short. An Employer of Record helps bridge that gap by administering a locally competitive benefits package that meets both legal requirements and employee expectations.

An EOR doesn't just check boxes, they make sure your employees receive benefits that are timely, properly communicated, and well-managed from the moment they’re onboarded. From managing healthcare contributions to adjusting for regional differences in leave or bonus entitlements, an EOR acts as both a legal and operational partner. The result is a better employee experience, less administrative burden on your internal team, and greater confidence that your offer is aligned with what top candidates in Kuwait actually want and need.

Termination Process in Kuwait

In Kuwait, termination of employment must be justified by a fair reason and conducted through a fair process. An employee may be terminated for one of the following reasons:

1. Employee misconduct
2. Inability to perform tasks
3. Operational requirments
4. Health grounds

Notice Period in Kuwait

In Kuwait, there is a requirement for three months notice to be provided by both the employer and the employee.

Severance in Kuwait

In Kuwait, severance pay is contingent on the employee's length of service. Employees paid monthly are entitled to 15 days' pay for each year of employment during the first five years of service. This increases to one month's pay per year of service thereafter, up to a maximum of 1.5 times the annual salary.