Indemnity, Part 1

The end of the year is approaching, and that means that teachers who are leaving will soon be receiving their indemnity payment from ASK (hopefully). This will be the first article in a multi-part series covering:

  • What is indemnity?
  • How do I calculate my indemnity correctly?
  • When does the Kuwait government require the indemnity payment to be paid?
  • How does the procedure at ASK work?

What is indemnity?

Your indemnity is a payment made to you at the completion of your contract before you leave Kuwait. The amount of your indemnity is based upon your total remunerationFrom Kuwaiti Labor Law:

Basic pay, commissions, obligatory bonuses, incentives, gratuities from the third parties and employee benefits such as housing allowances is included in the remuneration. Allowances on account of expenses and profit shares are not included in the remuneration. If the employee’s contract or the firm’s by-laws include bonus payment or if the same amount has been paid regularly every year, the company is obliged to pay the workers’ bonus.

The content of the remuneration is very significant. In case of injury, the amount included int he remuneration is used to compute the terminal compensation or indemnity. The payment may varybased on the payment type of the worker.

How is the amount calculated?

Your indemnity is calculated based upon the number of years that you worked for your employer. For those who work 5 years or fewer, for each year completed you are entitled to a termination indemnity equivalent to 15 days compensation. For those who worked for more than 5 years, you are entitled to 15 days compensation for each of the first 5 years, and 30 days compensation for each year worked for more than 5 years.

For example:

An employee who works at ASK for 3 years will receive 45 days (1.5 months) salary because 3×15=45.

An employee who works at ASK for 8 years will receive 165 days of salary (5.5 months based on a 30-day month) because they get 5×15=75 days for the first 5 years in addition to 3×30 for the last 3 years.

Up Next

Our next article will address the timing and procedure of the payment. If you are ending your contract this school year, your homework is to calculate the value of your indemnity payment.


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