Employer of Record in Kuwait

An Employer of Record (EOR) in Kuwait is a company that legally hires employees on your behalf. This means you can build a team in Kuwait without setting up a local entity. The EOR handles all the HR tasks, like payroll, taxes, benefits, and compliance with Kuwaiti labor laws. Think of them as your local HR department. They make it faster and easier to hire talent in Kuwait. You find the talent, and the EOR takes care of the employment paperwork and legalities. For companies looking to expand, an EOR like Rivermate simplifies the process.

How an Employer of Record (EOR) Works in Kuwait

Using an EOR in Kuwait is a straightforward process. It allows you to focus on your business goals while the EOR manages employment details.

Here is how it typically works:

1. You Find the Candidate: You recruit and select the professional you want to hire in Kuwait.
2. The EOR Hires Them: The EOR legally employs the candidate through a compliant local employment contract.
3. Onboarding: The EOR manages the entire onboarding process, including any necessary paperwork for work permits or visas.
4. Payroll and Benefits: The EOR handles all payroll, making sure your employee is paid on time and in the correct currency. They also manage benefits administration according to local laws.
5. Ongoing HR Support: The EOR continues to manage all HR-related tasks, including taxes and social security contributions. You manage your employee's day-to-day work, and the EOR handles the rest.

Benefits of Using an EOR for Hiring in Kuwait

Using an EOR to hire in Kuwait offers significant advantages. It saves you time and reduces the complexity of international expansion. You can enter the Kuwaiti market quickly and compliantly.

Here are some key benefits:

• Speed to Market: Hire employees in days, not the months it can take to establish a legal entity.
• Compliance: EORs are experts in Kuwaiti labor law, minimizing your risk of non-compliance. They handle employment contracts, taxes, and social security.
• Cost-Effective: Avoid the high costs associated with setting up a company in a new country.
• Focus on Growth: You can concentrate on your core business operations while the EOR manages HR administration.
• Access to Talent: An EOR allows you to tap into Kuwait's skilled workforce without geographical barriers.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Kuwait includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Kuwait.

Hiring in Kuwait means navigating a unique set of labor laws and cultural practices. The country relies heavily on an expatriate workforce, so understanding the legal landscape is key to a smooth and compliant hiring process. From contracts to working hours, getting the details right from the start will save you time and potential headaches down the road.

Employment contracts & must-have clauses

When you hire an employee in Kuwait, a written contract is mandatory. The official language of the contract must be Arabic, though you can include a translated version. In case of any dispute, the Arabic version is the one that holds up in court.

There are two main types of employment contracts in Kuwait:

• Fixed-term contracts: These have a specific end date.
• Indefinite-term contracts: These have no set end date and continue until one party terminates the agreement with proper notice.

No matter the type, every employment contract should include these key details:

• Job title and a clear description of duties
• Workplace location
• Contract duration (for fixed-term agreements)
• Salary in Kuwaiti Dinar (KWD)
• Any allowances for housing or transportation
• Working hours
• Leave policies
• Termination terms and notice periods

Probation periods

You can include a probation period in an employment contract to assess a new hire. Here’s what you need to know:

• The maximum probation period is 100 working days.
• You cannot place an employee on probation more than once for the same role.
• During the probation period, either you or the employee can terminate the contract without notice.
• If you terminate the contract during probation, you still need to pay the employee for the time they worked.

Working hours & overtime

The standard workweek in Kuwait is 48 hours, with a maximum of 8 hours per day. During the holy month of Ramadan, working hours are reduced to 36 hours per week.

Here's how overtime works:

Employees must have a one-hour break after five consecutive hours of work.

Public & regional holidays

Your employees are entitled to paid time off for public holidays. The exact dates of some holidays vary each year based on the Islamic lunar calendar.

Here is a list of public holidays in Kuwait for 2025:

• New Year's Day: January 1
• Isra' and Mi'raj (Prophet's Ascension): January 30
• National Day: February 25
• Liberation Day: February 26
• Eid al-Fitr: March 31 - April 2
• Waqfat Arafat Day: June 5
• Eid al-Adha: June 6 - 9
• Islamic New Year: June 25 - 26
• Prophet's Birthday: September 5

Hiring contractors in Kuwait

Hiring independent contractors can offer flexibility. However, it's important to understand the distinction between a contractor and an employee to avoid misclassification.

Independent contractors are not covered by Kuwait's Labor Law. This means they are not entitled to benefits like minimum wage, paid leave, or end-of-service indemnity. Their work relationship is governed by the terms of their service agreement.

Misclassifying an employee as a contractor can lead to significant penalties, including back payment of wages and benefits, and fines from the Ministry of Social Affairs and Labour.

An Employer of Record (EOR) can help you mitigate this risk. An EOR ensures that your workers are classified correctly from the start. We handle the complexities of local labor laws, so you can focus on your business. By partnering with an EOR, you can confidently hire contractors without the fear of misclassification.

In Kuwait, handling payroll means understanding local rules to pay your team correctly and on time. It's more than just cutting a check. You need to factor in things like bonuses, allowances for housing or transportation, and end-of-service benefits. Staying compliant with Kuwait's labor laws is key to keeping your employees happy and avoiding legal issues.

Payroll cycles & wage structure

How often you pay your employees depends on how you hire them. If you pay them a monthly salary, you must pay them at least once a month. For all other workers, you should pay them at least every two weeks.

A typical pay package in Kuwait includes more than just a basic salary. Common additions include:

• Housing allowance
• Transportation allowance
• Education allowance
• Phone allowance

Overtime & minimums

The standard work week in Kuwait is 40 to 48 hours. During Ramadan, the workday shortens to six hours. Overtime is paid at 125% of the normal rate for extra hours worked on a regular day. This rate increases to 150% for weekend work and 200% for public holidays. Overtime is generally limited to two hours per day.

As of the last update, the minimum wage is 75 Kuwaiti Dinars (KWD) per month.

Employer taxes and contributions

Employers are responsible for contributing to the social security system for their employees. There are no corporate taxes on businesses.

Employee taxes and deductions

One of the benefits of working in Kuwait is the lack of personal income tax. However, employees do contribute to social security.

In Kuwait, your employee benefits package is a major factor in attracting and keeping top talent. The law provides a solid foundation of mandatory leave and protections. However, many companies offer extra benefits to stand out. Understanding both the required and optional benefits is key to building a competitive and compliant workforce.

Statutory leave

Kuwaiti labor law outlines several types of mandatory leave for employees.

• Annual Leave: You are entitled to R days of paid annual leave after your first nine months of service. This pay is provided before you take your vacation.
• Sick Leave: If you get sick, you can take paid time off. The law specifies a tiered payment system. You receive your first 15 days with full pay. The next 10 days are at 75% pay, followed by 10 days at 50% pay, and another 10 days at 25% pay. After that, you can have subsequent days of unpaid leave. A medical certificate is required to validate your sick leave.
• Maternity Leave: Expecting mothers receive 70 days of paid maternity leave. This can be split into 30 days before the due date and 40 days after. After this paid leave, you can take up to four additional months of unpaid leave to care for your child.
• Pilgrimage Leave (Hajj): Muslim employees who have been with a company for two years can take a one-time paid leave of 21 days for the Hajj pilgrimage.
• Bereavement Leave: You can take up to three days of leave if an immediate family member passes away.

Public holidays & regional holidays

The government announces official public holidays each year. If you work on a public holiday, you must be paid double your usual rate and may get a compensatory day off.

Typical supplemental benefits

While the law sets the minimum, many employers in Kuwait offer additional benefits to attract and retain employees.

How an EOR can help with setting up benefits

Setting up a compliant and competitive benefits package in a new country can be complex. An Employer of Record (EOR) simplifies this process significantly.

An EOR already has a legal entity in Kuwait. This means you don't have to set one up yourself to hire employees. The EOR manages all HR tasks, including payroll and benefits administration. They ensure your benefits packages meet all local labor laws. This saves you time and reduces compliance risks. An EOR can also advise on what supplemental benefits are common in the local market, helping you offer a competitive package from day one.

When an employment relationship in Kuwait ends, you need to follow a clear process for termination and offboarding. This ensures you handle everything correctly and meet all legal requirements. The process involves providing proper notice, calculating and paying the final settlement, and managing the employee's visa and work permit cancellation.

Notice Periods

For employees paid monthly, you generally must provide three months' notice before termination. However, the employment contract can specify a different notice period. If the termination is for a serious reason, like misconduct that caused a significant loss to your company, you may not need to give notice.

Severance Pay

In Kuwait, severance pay is known as an end-of-service indemnity or gratuity. An employee is entitled to this payment after completing one year of service. The amount is calculated based on the employee's length of service:

• For the first five years of service: 15 days' salary for each year.
• For each subsequent year: One month's salary.

How Rivermate Handles Compliant Exits

Navigating employee exits in a different country can be complex. We make sure every termination is handled in compliance with Kuwaiti Labor Law. Here is how we help you manage the process:

• Documentation: We ensure you have the proper documentation to support the termination.
• Final Settlement: We accurately calculate the employee's final dues, including their prorated salary, unused vacation pay, and end-of-service indemnity.
• Clear Communication: We facilitate clear communication with the employee, so they understand the process and their final settlement.
• Work Permit and Residency: We manage the cancellation of the employee's work permit and residency visa.

Getting a visa to work in Kuwait means your employer sponsors you. This is a key point to understand. The government needs a local, licensed company to be responsible for you while you are in the country. This process involves paperwork and specific steps. You cannot work in Kuwait on a tourist visa.

Employment visas & sponsorship realities

An Employer of Record (EOR) can be your legal employer in Kuwait. This is a practical way to get your visa sponsored without your company needing to open its own entity in the country. An EOR handles all the legal and administrative tasks of employment, including visa sponsorship.

Here is what an EOR can typically sponsor:

• Private Sector Work Visa (Article 18): This is the most common visa for those working for a private company. An EOR with a registered legal entity in Kuwait can sponsor this visa.
• Government Sector Work Visa (Article 17): This visa is for individuals working on government projects.

An EOR simplifies the process for you and your company. They manage the application for your work permit and residency visa. This includes dealing with the Ministry of Interior and other government bodies. The entire process to get a work visa in Kuwait usually takes between 4 to 8 weeks.

Business travel compliance

For short-term business trips, you need a business visit visa. You cannot work on this visa. It is for activities like meetings, conferences, and contract negotiations.

To get a business visa, you generally need:

• A passport valid for at least six more months.
• An invitation letter from a Kuwaiti company.
• A Kuwaiti sponsor or business contact.

The typical business visa is for a single entry and is valid for 30 days. Some nationalities may be eligible for a visa on arrival, but it's important to check the latest rules before you travel. The application is often done online, and the visa is sent to you by email.