Kuwait Minimum Salary, Overtime, and Legal Deductions

1. What is the Private Sector Minimum Wage in Kuwait?

In the State of Kuwait, the minimum wage is established by the government to ensure a decent living standard for all workers in the private and oil sectors. According to the Public Authority for Manpower (PAM), the official minimum wage for private sector employees is set at 75 KWD per month.

Key details regarding minimum wage rules:

• No contract can specify a basic salary lower than 75 KWD. Any such contract is legally null and void, even if agreed to by the worker.
• Basic salary excludes allowances (such as housing or transport). The 75 KWD limit applies strictly to the basic salary part.
• Under the Wage Protection System (WPS), all employers must transfer employees' salaries directly to local banks. Any delayed payment triggers company file suspensions by PAM.

2. How is Overtime Calculated under Kuwait Law?

When an employee is requested to work beyond standard working hours (8 hours per day, 48 hours per week), they are legally entitled to receive overtime pay. The hourly calculation rate varies according to when the overtime work was performed:

How to Find Your Hourly Wage Rate

To calculate the overtime payout, you must first determine your hourly rate based on a standard 26-day month and 8-hour workday:

3. Legal Restrictions on Salary Deductions

To protect workers from exploitation and financial hardship, Kuwait Labour Law places strict statutory limits on salary deductions that an employer can enforce:

• Loan Repayments: If you borrowed money from your employer, they cannot deduct more than 10% of your monthly salary to repay the debt. No interest can be charged on employer loans.
• Disciplinary Penalties: For any single infraction, an employer cannot deduct more than 5 days of pay as a penalty. Disciplinary deductions must be documented formally and registered in the employee's file.
• Damages to Property: If a worker causes damage to company tools or property due to negligence, the employer can deduct the cost of repair. However, the deduction is capped at 5 days of salary per month.