Employer of Record in Kuwait

How an Employer of Record works in Kuwait

An Employer of Record (EOR) is an already-established local legal entity that acts as an employer on behalf of another company. The model allows non-established entities (foreign employers) to hire employees in a new market, such as Kuwait.

The EOR handles all administrative and compliance aspects of hiring, from onboarding to offboarding and all the steps in between, such as processing payroll, paying taxes, and administering benefits. Using an EOR, like Rivermate, removes the hassle and cost of setting up a legal entity as well as prevents the risk of non-compliant hiring due to lack of local knowledge and expertise.

Kuwait labor market: At a glance

The hiring market
Greatest hiring activity:	Al Farwaniyah, Al Fahaheel, Kuwait City, Ar Riqqah
Hiring timelines:	Locals: one to two weeks Foreign nationals: 2-3 months
In-demand sectors:	Oil & gas (leading world exporter), healthcare, engineering, construction, education, IT sectors. For expats: finance, hospitality, project management.

The salary market
Employer contributions:	11.5% (locals); 0% (foreigners) + private health insurance (foreigners)
Additional employment costs:	End of service indemnity
Monthly minimum wage:	KWD 75 per month for workers in the oil and private sector as well as for domestic workers (including foreigners)
Average monthly salary:	KWD 1,004 (private sector 2024), KWD 1,469 (oil sector 2024)
Personal income tax rates:	0% on employment income

The real cost of hiring in Kuwait

Employment costs in Kuwait are relatively low (particularly for foreign hires), although end-of-service indemnity and other applicable costs should also be considered. Beyond the ongoing monthly salaries, one aspect requiring attention and planning from employers is the end-of-service indemnity, discussed further below. Kuwait has no 13th-month salary obligation. It is important to note that any loan or debt repayments to the employer (money owed by the employee) can only be withheld from the salary up to 10% of the wage.

Base salaries

The legal minimum wage in Kuwait is set at KWD 75 and applies across the private sector and the oil industry. Domestic workers are governed by separate legislation.

According to data published by the Kuwaiti Central Statistical Bureau in its 2024 Social Statistics Bulletin, the average salary in the private sector was KWD 1,004 in 2024. In the oil sector, the average was higher, at KWD 1,469. More recent data (2025) shows that private sector wages for Kuwaiti males in Q3 of 2025 reached KWD 1,648; Kuwaiti females had an average of KWD 1,113. This should be contrasted with averages of non-Kuwaitis, where males earned KWD 314 and females earned KWD 418. The total average Kuwaiti salary in all sectors has been estimated at KWD 1,574, while for non-Kuwaitis it is KWD 347, showing a significant gap between the salary market levels for domestic vs. foreign employees.

Mandatory premiums and benefits

Kuwaiti labor law generally limits weekly working hours at 48 (8 hours per day); 40 hours in the oil sector. This schedule is generally reduced during Ramadan when 36-hour weeks apply. Friday is typically a rest day. Work on a weekly rest day attracts at least a 50% premium pay and a compensatory day off. Regular overtime must be compensated with at least 125% of the regular pay rate.

Annual leave eligibility of 30 days per year becomes due once an employee completes six months of service. This eligibility threshold has been recently amended from the previous nine-month requirement. Unused leave can only be paid out at termination. Employees are also entitled to paid days off for public holidays (13 observed in 2026).

Employer-funded maternity leave is granted for a duration of 70 days. Up to 75 days of sick leave are also granted but paid on a varying scale: days 1-15 are paid at 100%; 16-25 at 75%; 26-35 at 50%; 36-45 at 25% and 46-75 are unpaid.

Employer contribution cost

The main monthly employer cost on top of the gross salary is the Public Institution for Social Security (PIFSS) contribution, which is paid at a total rate of 11.5% (11% if outside the private or oil sector) with the calculation base capped at KWD 2,750 per month. However, this obligation applies only when the employee is a local national, as foreigners generally do not contribute to the PIFSS (with the exception of some GCC countries’ nationals). Local employees contribute to the PIFSS in separate components at different calculation bases (5% on amount up to KWD 1,500; supplementary 5% levied on additional KWD 1,250 above it, 2.5% pension increase up to KWD 2,750, 2.5% financial remuneration up to 1,500 and 0.5% unemployment up to 2,750). Contributions must be paid by the first working day of the month following the month for which they are paid. In case of late payments of contributions, a 1% penalty is due for each month of delayed payment.

Foreign employers are frequently attracted to the low additional employer cost; however, one thing to keep in mind is the end-of-service indemnity cost, which though not part of regular monthly payroll, is best planned for throughout the employment lifecycle.

An additional benefit to take into consideration is the health insurance of expats, which is mandatorily paid by the employer and linked to the residency procedure.

Calculate employment costs

What to expect when hiring in Kuwait

Kuwait - ranked 7th worldwide in oil reserves - has a favorable geology with proven reserves allowing more than 80 years of supply at current rates. Oil makes up 60% of GDP and over 95% of revenue from exports. The Kuwaiti Dinar (KWD) is the world’s strongest currency.

Based on Q1 2026 data by the CBS, Kuwait’s workforce has around 2.281 million workers, household workers excluded. About 83.3% of Kuwaitis work for the government sector; only 16.5% work for the private sector.

Market condition	Current reality
Composition of workforce	80%+ expats; dual labor market approach (foreigners vs locals)
Distribution of local workforce	83.3% of Kuwaitis work in the government sector
Employment legislation	Depending on sector; broadly three categories apply: private-sector, oil-sector, domestic workers
Ease of hiring foreigners	Kuwaitization quotas incentivize domestic hiring
Salary pressure	Competitive market locals, largely benefit-driven
Workplace culture	Requires awareness of religious practices and cultural sensitivities

Hiring expats in Kuwait

Certain sectors show a distinct non-Kuwaiti employment prevalence, with the local population significantly lower. These include agriculture (where only 0.3% are locals), accommodation and food services (2.4% locals), trade of cars and motorcycles (4.7% locals) and construction (6%). By contrast, local workers account for the majority of employees in the energy and water supply sectors (95%+ locals), public administration (78.9% locals) and education (67.1% locals).

All foreign nationals require residence permits sponsored by a local Kuwaiti employer entity the private sector (Kafala sponsorship approach, Article 18 visa), something that an existing EOR can accomplish on a foreign client’s behalf. Medical fitness checks and health insurance certificates are part of the work permit process, as is a No Objections Certificate from the General Administration of Criminal Investigation and a Police Clearance Certificate. Timelines generally depend on the employee’s nationality, their role and the employer’s eligibility. Kuwaitization quotas apply in certain sectors.

According to CSB data from the first quarter of 2026, the top non-Kuwaiti nationalities hired outside the domestic sector include India (25.5%), Egypt (20.5) and Bangladesh (9%). Kuwaitis make up 19.1% of that population.

GCC countries’ nationals generally do not require a Kuwaiti work permit.

Compliance risks that employers must know about

Employment contracts

Concluded mandatorily in Arabic (or bilingual, with the Arabic version prevailing), employment contracts in Kuwait must clearly state the salary split into base pay and additional allowances.
Fixed-term contracts are allowed but cannot be for less than one year or more than five years. Renewals are possible.

Employment contracts must comply with the local labor law and need to be registered with the Public Authority for Manpower (PAM).

Probation

Kuwaiti labor law allows up to 100 working days of probation period per employee; an employer can use a probation only once for each employee. Either party can terminate during the probation but when the employer initiates a dismissal, indemnity may still be due.

Notice periods

Three months' prior notice by either party is required in Kuwait in cases of monthly-paid employees on open-ended contracts. Different rules may apply to other types of contracts and other agreed payment arrangements.

Repatriation costs

As is the case with other GCC countries, it is mandatory to cover the repatriation expenses of foreign national employees at the end of employment, subject to governing rules.

Benefits of hiring employees through an EOR in Kuwait

Setting up a new local legal entity in Kuwait is a slightly more complex procedure than elsewhere in the Gulf region, especially when the ownership is foreign. Initial capital and local participation requirements may be applicable, which further complicates the company registration procedure. Using an EOR, like Rivermate, both reduces the risk of losing your talent while you set up your business and helps manage expenses by allowing you a more transparent way to budget your hiring costs in a new market.

Ready to hire in Kuwait?

Finding your ideal candidate in Kuwait is only the first step. An EOR can simplify your hiring in Kuwait by handling sponsorships, contracts, payroll and full employment compliance. If you are ready to take the first step, talk to a Kuwait Hiring Expert.

Sources:
Labor Law (Arabic)
Ministerial Order No. 14 of 2017
Annual Bulletin of Social Statistics 2024
Alshall Weekly Report (labor section)
CSB: Employed individuals by gender, activity group and nationality
CSB: Labor Market Data
Top 10 countries with largest oil reserves (gomarkets.com)
ZipRecruiter: In-demand jobs in Kuwait
Central Bank of Kuwait: WPS
CFR: What is the kafala system?
ILO: Labor Law 6/2010
PIFSS FAQ
Forbes: Top 10 strongest currencies
Watheef: Kuwaitization guide