Establishing and running payroll in Kuwait
The Middle Eastern country of Kuwait has a very strong economy that, while initially powered the oil industry, has diversified significantly in recent decades, and the nation now attracts large amounts of foreign investment.
If your organization is planning an expansion into Kuwait, an important element is likely to be the hiring of local staff, along with the associated payroll setup and management. This can often be a complex process, with long waiting times and delays regularly hindering expansion. There are also cultural and administrative differences to take into account, which can complicate matters further.
At Horizons, we specialize in helping organizations spanning all industries expand internationally, including into Kuwait. We can handle your payroll setup and management, even if you don’t have a legal entity in Kuwait.
Why choose the Horizons payroll solution?
If you have an entity
If your business has already an official entity in Kuwait, we can help you set up and run your in-country payroll, managing all of the associated HR, administration, and compliance work.
This solution is ideally suited to large organizations with a long-term outlook for expansion in Kuwait.
If you don’t have an entity
For organizations that have not already established an entity in Kuwait, we offer our standard payroll outsourcing service with the added use of our Kuwaiti subsidiary. Our subsidiary will act as employer of record for your local workforce, meaning you won’t have to go through the long and cumbersome process of registering a legal entity in Kuwait.
This service provides a low-risk, flexible, and scalable option for organizations interested in expanding into Kuwait.
Hire and pay talents
with Horizons in
180+ countries
Hire and pay talents
with Horizons in
180+ countries.
Kuwait payroll guide
Taxation and withholdings requirements in Kuwait
Employees and employers in Kuwait must both contribute a percentage of salaries toward social security. Employees pay 7.5% and employers pay 11%.
Kuwait does not have a personal income tax for employees.
Corporate tax in Kuwait is 15% in most cases. There is also a 1% religious tax called zakat.
|
Pension
|
11.0%
|
|
Unemployment
|
0.5%
|
| Total Employment Cost |
11.5% |
| Pension |
10.0%
|
|
Unemployment
|
0.5%
|
| Total Cost |
10.5% |
Entitlements and terminations in Kuwait
Employees in Kuwait are generally entitled to three months of notice prior to termination. Additionally, they are usually entitled to a severance payment of 15 days of pay for every year of service up to five years of service, and 30 days of pay for every year beyond five. The maximum severance payment is one and a half years of pay.
Probation periods in Kuwait are limited to 100 days.
How to establish a Kuwaiti payroll
An important part of the hiring and payroll process for many foreign organizations is setting up a Kuwaiti entity to act as employer of record. This process can be lengthy and expensive, often taking weeks or even months to complete.
Another option is to outsource your payroll setup and management to Horizons. We can offer the use of our Kuwaiti subsidiary to act as employer of record for your employees in Kuwait, so you can avoid the complex setup and management process, and can benefit from our solutions even if you don’t have a legal entity in Kuwait. Additionally, we can set up and run your payroll, HR, compliance, and any other associated work, allowing you to work on successfully expanding your businesses in Kuwait.
Manage payroll in Kuwait
Whether it’s EOR service or just payroll management, Horizons’ employment experts can help you get started in 24h.
