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Global Payroll Team
Written by Global Payroll Team
Last updated May 1, 2026
Expert Reviewed
Payroll in Kuwait
EOR in Kuwait
PEO in Kuwait

Kuwait map

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Mercans offers complete payroll, PEO and HR services in Kuwait

Bolstered by vast oil resources, Kuwait remains one of the Gulf region’s major hydrocarbon economies. Alongside petroleum and petrochemicals, the country continues to promote infrastructure, logistics, utilities, technology, and private sector development as part of its broader economic diversification agenda.

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Doing Business in Kuwait

Kuwait follows a civil legal system, with Islamic law continuing to play an important role in personal matters. The country has an established legislative, executive and judicial framework. Kuwait also maintains laws intended to support private sector activity and foreign investment, including direct investment and public private partnership regulations.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Kuwait is straightforward. Choose how your company operates from a range of entity types which suit your individual circumstance.

Banking

Banking Hours: Banking hours vary by institution and branch, but many banks commonly operate from Sunday to Thursday during normal daytime business hours.

Working Week

The standard working week is generally from Sunday to Thursday, although actual working schedules vary by employer and sector.

Labor Law

Law No. 6 of 2010 concerning labor in the private sector regulates private sector employment in Kuwait. It applies to both foreign national employees and Kuwaiti nationals and sets the minimum mandatory employment standards regardless of any contrary contractual choice of law.

Main Industries

Petroleum, petrochemicals, steelmaking, cement, shipbuilding and repair, desalination, food processing, and construction materials

GDP Growth

-2.6%

Dates & Numbers

dd/mm/yyyy

Official State Name

State of Kuwait

Population

4.88 million

Capital

Kuwait City

Major Languages

Arabic

Currency

Kuwaiti Dinar (KD)

Internet Domain

.kw

International Dialing Code

+965

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Kuwait
Kuwait City, KW
1:04 pm, May 15, 2026
35°C
clear sky
32 %
Wind Gust: 9 mph
Clouds: 1%
Sunrise: 4:56 am
Sunset: 6:32 pm

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Payroll in Kuwait

Mercans payroll in Kuwait provides a fully managed payroll service to process employees’ salaries and related financial transactions in compliance with Kuwaiti labor laws and regulations, ensuring accuracy, timeliness, and confidentiality. Owing to the extensive experience and expertise of our Kuwait payroll team, as well as our smart technology, we have been able to offer industry-leading outsourced payroll services for more than 20 years in Kuwait and globally. As a global leader in payroll outsourcing, Mercans is regarded as one of the largest payroll companies in Kuwait and in the global industry.

As for your requirements related to payroll in Kuwait, we streamline complex and time-consuming payroll processes such as payroll calculations, statutory reporting, and end-of-service benefit administration by handling the administrative aspects and the end-to-end payroll process in Kuwait for you. You can get real-time answers to all your payroll questions from our dedicated payroll experts. By customizing our services to meet your business needs, we are able to provide you with the time you need for your core business activities.

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Payroll

Article 56 of the Kuwait labor law states that employees hired on monthly pay should be paid wages at least once a month, while other workers shall be paid at least once every two weeks. Common pay elements include basic salary, housing allowance, transport allowance and cost of living related allowances. Variable elements can include overtime, sales commission, relocation allowance, leave passage and other contractual benefits.

It is acceptable to provide employees with online payslips

Payslip

Payroll reports should be kept in line with applicable tax, labor, and commercial record retention requirements

Reports

Employees receive paid annual leave of 30 days

Annual Leave

Employees may receive up to 75 days of sick leave with variable pay during the year, subject to medical certification

Sick Leave

70 days of paid maternity leave. There are no statutory provisions for paternity leave

Maternity & Paternity Leave

1 month

Employee Termination

There are no provisions mandated by law regarding a 13th or 14th month salary

13th month salary

75 KWD per month

Minimum Wage

Overtime is generally paid at 125% of the normal rate, and 150% for work on weekly rest days or official holidays, subject to legal limits

Overtime

Employees paid monthly are entitled to 15 days’ pay for each year of employment for the first 5 years of service, and 1 month’s pay for each following year, subject to the statutory cap

Severance Pay

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Employer of Record (EOR) in Kuwait

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Mercans, a leading EOR provider in Kuwait, offers compliant employer of record services to help foreign companies legally hire and manage the best-in-class talent in Kuwait.

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Our EOR in Kuwait services handle HR, payroll, compliance, and other administrative tasks while ensuring compliance with Kuwaiti employment laws and regulations.

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By choosing our employer of record services, you can onboard workers in Kuwait quickly without incurring the cost and risk of setting up a local company.

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We offer a unified employment platform with automated workflows, digital signatures, employee payroll, contractor payouts, and all types of compliance solutions. Discover how our Professional Employer Organization (PEO) services and the assistance of our local HR experts can help you achieve your business and team goals in Kuwait.

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PEO in Kuwait

Mercans PEO (Professional Employer Organization) services in Kuwait provide a comprehensive HR outsourcing solution for foreign companies to establish a local presence, compliantly hire and manage employees, handle HR, payroll, benefits, compliance, and other administrative tasks, while reducing costs and administrative burden.

For companies looking to outsource their HR and payroll processes, Mercans PEO in Kuwait provides a comprehensive and cost-effective solution. In its capacity as a Professional Employer Organization, Mercans provides employee benefits, payroll administration, and compliance with Kuwaiti labor laws. This allows companies to focus on their core business activities while relying on Mercans to handle the HR and payroll responsibilities, ensuring a seamless HR experience.

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Tax and Social Security

Kuwait does not impose personal income tax on employment income. However, mandatory social security contributions apply to Kuwaiti employees and are payable by both employers and employees. Expatriate employees are generally not covered by Kuwait’s social security scheme and instead are usually entitled to end-of-service benefits under labor law.

Tax

Tax residency is generally not relevant for employment income because Kuwait does not impose personal income tax on salaries. A 15% corporate income tax generally applies to the taxable profits of foreign corporate entities carrying on business in Kuwait.

15%

Corporate Income Tax

–

Personal Income Tax

–

Sales Tax

–

VAT

Social Security

Contributions are payable monthly by both the employer and employee for Kuwaiti employees. There are generally no social security obligations for expatriate workers in Kuwait.

19.5%

Social Security Rate

11.5%

Social Security Rate for Employers

8%

Social Security Rate for Employees

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Employment Law

Kuwait’s private sector employment framework is primarily governed by Law No. 6 of 2010. Employers must comply with statutory rules on contracts, working time, leave, sick pay, termination, and end-of-service benefits. COVID-19 specific emergency references are no longer current and should not be treated as standard ongoing employment rules.

Employment Agreement

Employment contracts must be in writing and include key terms such as the date of the agreement, details of remuneration, duration of the contract, and nature of work. Employers should also comply with any filing or administrative requirements applicable to the employment relationship.

Working condition

Employees may generally work a maximum of 48 hours per week and should be given a weekly rest day. Rest breaks must usually be given after 5 continuous working hours. Overtime is subject to statutory limits.

Leaves

Employees must be given at least 30 days’ paid annual leave each year following the qualifying period under the law. Employees are also entitled to up to 75 days of sick leave with variable pay, and female employees are entitled to 70 days of paid maternity leave.

Employment termination

Termination rules differ depending on whether the employee is on a fixed-term contract or an open-ended contract. Employees who believe they were wrongly dismissed may file claims before the relevant labor authority or court, and end-of-service entitlements must be settled in accordance with the law.

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1 month

Minimum notice period for terminating an employee on monthly pay

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12

Total number of official paid public holidays under the labor law

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48

Working hours per week

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Up to 3 days

Total number of days for Compassionate & Bereavement Leave

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Immigration

Work permits must be obtained to work in the private sector. Employers act as sponsors for foreign employees and must apply for the required immigration and work authorization on the employee’s behalf. Foreign employees who will work in Kuwait for more than a short period generally also require a residence permit.

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Residency permits

For foreign national employees who want to work in Kuwait for longer than 3 months, the employer must apply for a residence permit through the relevant immigration authorities. Regular residency periods depend on the category, but ordinary residence is generally capped at 5 years under the current framework.

Work Permit validity

Typically linked to the approved residence and employment authorization period

Required Documents

Evidence of accommodation or sponsor support, where required

Copy of the employee’s passport

Passport-size photographs

Completed application form

Copy of the work permit or employment authorization, where required

Copy of the employer’s invitation or sponsorship documents

Copy of the employment contract

Educational and professional certificates, where required

Medical and security clearance documents, where applicable

Compliant, reliable, error-free and touchless payroll in Kuwait

Build the best team and hire top talent compliantly in Kuwait. Get in touch with Kuwait payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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    FAQs

    What is an Employer of Record (EOR) in Kuwait and how does it help foreign companies?

    An Employer of Record in Kuwait, provided by Mercans, acts as the legal employer for your workforce in the country. Mercans manages employment contracts, payroll, taxes, benefits, and compliance with Kuwaiti labor regulations, allowing international companies to hire employees locally without opening a legal entity.

    Why should businesses use an EOR instead of establishing a local entity in Kuwait?

    Using Mercans as your EOR in Kuwait eliminates the time and cost of company setup. It ensures immediate compliance with Kuwaiti employment and tax laws, simplifies HR administration, and enables you to start hiring quickly while Mercans handles all legal and payroll responsibilities.

    How does payroll outsourcing in Kuwait ensure compliance with tax and labor laws?

    Mercans ensures payroll accuracy and compliance by managing salary processing, statutory deductions, and benefits according to Kuwaiti regulations. The payroll system is fully aligned with labor laws and regularly updated to reflect legislative changes, helping companies avoid penalties or delays.

    Can an Employer of Record in Kuwait hire employees and manage work permits for international companies?

    Yes. Mercans can hire employees on behalf of your company and coordinate all visa, residency, and work permit processes for foreign nationals. This allows global businesses to operate in Kuwait seamlessly and in full legal compliance.

    What are the main benefits of using EOR and payroll services in Kuwait for global expansion?

    Partnering with Mercans for EOR and payroll services in Kuwait provides fast market entry, complete compliance with labor laws, reduced administrative workload, access to local HR and payroll expertise, and flexibility to scale your workforce efficiently as your business grows.

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