Kuwait Annual Leave Payout: What You Are Owed When You Resign
Last updated: June 2026 · Legal reference: Kuwait Labour Law No. 6 of 2010, Article 70
Quick Answer
When you resign or are terminated in Kuwait, your employer must pay out all accrued and unused annual leave as part of your final settlement. This is a legal requirement under Kuwait Labour Law No. 6 of 2010 — your employer cannot forfeit your leave balance as a penalty for resignation. The payout is calculated on your basic salary divided by 26 working days, multiplied by the number of unused leave days.
Under Article 70 of Kuwait Labour Law No. 6 of 2010, private sector employees are entitled to a minimum of 30 calendar days of paid annual leave per year. When you leave — whether by resignation or termination — any unused leave days must be paid out in cash as part of your final settlement. Your employer cannot withhold this payment or use it as leverage for any reason.
Know your full exit number before you sign
Your final settlement includes EOSB, notice pay, and leave payout. Use the Kuwait EOSB Calculator to verify your indemnity independently before signing anything.
Calculate my EOSB →What Article 70 says about annual leave in Kuwait
Article 70 of Kuwait Labour Law No. 6 of 2010 establishes the baseline annual leave entitlement for private sector employees. After completing one full year of service, you are entitled to a minimum of 30 calendar days of paid leave per year. Some employers and contracts are more generous — 30 working days is a common contractual upgrade — but 30 calendar days is the legal floor.
The same Article confirms that any annual leave not taken before your employment ends must be compensated in cash. This is not discretionary — it is a statutory right that exists regardless of the reason your employment terminates. Whether you resign voluntarily, are made redundant, or are terminated for cause (in most circumstances), the leave balance owed to you on your last day must appear in your final settlement.
Leave also accrues on a pro-rated basis. If you worked 9 months in a leave year, you have accrued 9/12 of your annual entitlement — and you are owed the cash equivalent of any of those pro-rated days that remain unused when you leave.
How to calculate your annual leave payout
The Kuwait Labour Law formula for annual leave payout uses a 26-day working month divisor — not 30 calendar days and not the number of working days in the specific month you leave. The standard calculation is:
Leave Payout Formula
Daily rate = Basic salary × 12 ÷ 365
Leave payout = Daily rate × unused leave days
Note: Some HR departments use (basic salary ÷ 26) as the daily rate — this is also widely accepted in practice. The ÷365 method is consistent with how Kuwait Labour Court calculates salary-based entitlements, including EOSB, and is the more legally defensible approach when disputing a settlement.
Worked Example
Basic salary: KWD 400/month · Unused leave: 18 days
Daily rate = 400 × 12 ÷ 365 = KWD 13.15/day
Leave payout = 13.15 × 18 = KWD 236.71
If the employer uses total salary (say KWD 700/month including allowances) instead of basic, the payout would be KWD 414.25 — a significant difference. Always check which salary figure your employer is using.
Which salary is used — basic or total?
This is the most common source of underpayment in Kuwait leave payouts, and the answer depends on your contract.
Kuwait Labour Law calculates annual leave compensation on basic salary as the default. Basic salary excludes housing allowance, transport allowance, and any other variable or fixed allowances — it is the core figure stated in your contract as "basic" or "basic salary."
However, if your employment contract explicitly states that annual leave is calculated on your total salary (or "full salary" including allowances), the contractual basis overrides the statutory default and your employer must use that higher figure. This is more common in senior or professionally negotiated contracts.
Read your contract's leave clause before accepting the figure
Many contracts contain a leave clause specifying "salary for purposes of annual leave means basic salary" or similar. If yours says total salary, and your employer pays you using only basic, the difference is owed to you. Get a copy of your contract before your last day — it becomes harder to obtain after you've left.
Annual leave accrual during notice period
Your notice period is part of your active employment. Annual leave continues to accrue during it at the same rate as any other month — roughly 2.5 calendar days per month for a 30-day annual entitlement.
This means that if you resign with a 3-month notice period and take no leave during those 3 months, approximately 7.5 additional leave days will have accrued by the time you leave — and those days must be included in your final settlement payout alongside any pre-resignation leave balance.
Your employer may ask you to take outstanding leave during your notice period. This is a valid request and can be done by mutual agreement. If you agree, those days reduce your outstanding leave balance, which in turn reduces the payout owed at the end. Make sure any agreement to take leave during notice is documented in writing, and confirm the leave dates are not being applied to extend or offset your notice obligations.
Use the Notice Period Calculator to confirm how many notice days you are owed before you start counting accrual.
Leave payout for less than one year of service
Kuwait Labour Law provides for a pro-rated leave payout if you have completed at least 6 months of service but less than a full year when you leave.
What to do if your employer refuses to pay your leave balance
Withholding an accrued leave payout is a violation of Kuwait Labour Law. If your final settlement does not include your leave balance, or the figure is unexpectedly low, take the following steps:
If you are still working through your notice period and have not yet received your settlement, read the Kuwait EOSB guide to understand how all three components of your final settlement — EOSB, notice pay, and leave payout — fit together before you sign.
When should your leave payout be paid?
Kuwait Labour Law requires your final settlement — including leave payout — to be settled within a reasonable period after your last working day. In practice, employers typically process the full settlement within 30 days of the end of employment, though this is not always written as a hard legal deadline in the same way as in some other jurisdictions.
If your employer is significantly delaying settlement beyond your last working day without a clear explanation, this is a separate issue to raise with PAM. Delayed payment is treated as a withholding of lawful entitlement and is subject to the same complaint process as a refusal to pay.
Plan your exit date accordingly. If you are timing your resignation for maximum EOSB — for example, to cross the 5-year service threshold — use the Smart Resignation Planner to confirm the date before you submit your notice.
Frequently asked questions
How is annual leave payout calculated in Kuwait?
Under Article 70 of Kuwait Labour Law No. 6 of 2010, your annual leave payout is calculated on your basic salary only — not your total package. The formula is: (basic salary / 26 working days) x unused leave days. If your employer uses total salary in the formula, they are overpaying you, but many employers incorrectly use basic salary alone even when the contract says total salary — always check your contract first.
How many days of annual leave am I entitled to in Kuwait?
Under Article 70 of Kuwait Labour Law No. 6 of 2010, private sector employees are entitled to a minimum of 30 calendar days of paid annual leave per year after completing one full year of service. Some contracts grant more — if your contract says 30 working days, that is more generous than the statutory minimum and the contractual entitlement applies.
Do I get paid for unused annual leave when I resign in Kuwait?
Yes. Under Kuwait Labour Law No. 6 of 2010, accrued and unused annual leave must be paid out as part of your final settlement whether you resign or are terminated. Your employer cannot forfeit your leave balance as a penalty for resignation. The payout is calculated on a pro-rated basis for any partial year worked.
Can my employer refuse to pay my leave balance in Kuwait?
No. Withholding accrued annual leave payout is a violation of Kuwait Labour Law No. 6 of 2010. If your employer refuses to include your leave balance in the final settlement, you can file a complaint with the Public Authority for Manpower (PAM). Document your leave balance in writing — ideally from your HR system or an email from HR — before your last day.
What salary is used to calculate annual leave payout in Kuwait?
Kuwait Labour Law calculates annual leave payout on basic salary. However, if your employment contract explicitly states that leave is calculated on total salary (basic plus allowances), the contractual basis applies and your employer must use the higher figure. Always read your contract clause on annual leave before accepting a settlement figure.
Do I accrue leave during my notice period in Kuwait?
Yes. Your notice period is part of your active employment under Kuwait Labour Law, so annual leave continues to accrue during it. Any leave days accrued but not taken during your notice period must be paid out in your final settlement along with your pre-resignation leave balance.
What if my employer asks me to use my leave during my notice period?
An employer can request that you take outstanding leave during your notice period, but cannot force you to do so without mutual agreement. If you take leave during notice, those days reduce the leave balance owed to you in the final payout — but your notice period continues to run regardless. Leave taken during notice does not extend your exit date unless both parties agree in writing.
What happens to my annual leave balance if I worked less than one year in Kuwait?
If you have completed at least 6 months of service but less than one full year, you are entitled to a pro-rated leave payout under Kuwait Labour Law. The leave is calculated proportionally based on the months you worked. If you resign before completing 6 months of service, Kuwait Labour Law does not mandate a leave payout for that period, though some contracts provide more generous terms.
Key Takeaways
- ✓ Kuwait minimum annual leave entitlement: 30 calendar days per year — Article 70
- ✓ All unused leave must be paid out on exit — resignation or termination, no exceptions
- ✓ Formula: basic salary × 12 ÷ 365 × unused leave days
- ✓ Check your contract — if it says total salary for leave calculation, that overrides the statutory default
- ✓ Leave accrues during your notice period — include it in your final count
- ✓ Do not sign a settlement letter until leave payout appears as a separate line item
- ✓ If your employer refuses to pay, file a complaint with PAM — bring your leave balance statement and contract
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Need legal help?
Employer refusing to pay your leave balance?
Fathima Karama is a Kuwait-based employment law specialist who can review your settlement, confirm what your employer owes under Article 70, and advise on next steps if they are withholding your entitlement.
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Related guides
- Kuwait EOSB Guide — Article 51 explained: how indemnity is calculated
- Notice Period Calculator — Kuwait and UAE
- Smart Resignation Planner — time your exit date for maximum EOSB
- Kuwait Final Settlement Checklist — everything that should appear in your settlement letter
- Can My Employer Reduce My Notice Period in Kuwait?
Reviewed against Kuwait Labour Law No. 6 of 2010 — June 2026. This guide is for informational purposes only and does not constitute legal advice.