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PAY_KW_SI_000 - National Social Security Contributions in Kuwait
General Data in Customer Master CPI1466 during BackupThis documentation is copyright by SAP AG.
Kuwaiti employees and employers are required to make contributions to the national social security scheme. The contributions can be divided into the following parts:
Social insurance contribution
This part of contribution can be further divided into basic contribution, and complementary contribution. Both contributions utilize the same contribution percentages; and the total contribution amount is calculated progressively as per the comparison to the upper limit for applicable base salary for each contribution.
Contribution to retirement pension increment
Regardless of the insured person's salary, the following limits are the same for all to make increment contributions:
- Upper limit on applicable salary
- Each insured person's salary is compared to this limit. If the actual salary amount is less than the limit, the actual amount is used as the base for contribution calculation; if the actual salary amount is more than this limit, this limit is used as the base for contribution calculation. This limit is the same as the limit for complementary contribution.
- Employee contribution percentage
- Employer contribution percentage
Unemployment Insurance
Contributions to the unemployment insurance are calculated similarly as that for retirement pension increment. They share the same upper limit on applicable salary; difference lies only in the contribution percentages.
In addition, a lower limit is also defined in the scheme. If an employee's salary is even less than the lower limit, the employer is obliged to make the employee contribution for the difference between the actual salary amount and the lower limit. For example, if the lower limit is KWD 230, and an employee's applicable salary is only KWD 200, the employee's payment for SI contribution and the employer's payment for SI contribution are as follows:
Employee payment = 200 x EE percentage
Employer payment = 200 x ER percentage + (230-200) x EE percentage + (230-200) x ER percentage
- You define the limits for applicable base salary in the Customizing activity Define Limits on PIFSS Contribution Bases.
- You define the percentages of basic contribution and complementary contribution in the Customizing activity Define PIFSS Contribution Percentages.
- You define the percentages of retirement pension increment in the Customizing activity Define Contribution Percentages of Retirement Pension Increment.
The following examples illustrate how the contributions are calculated.
| Contribution | Limit | EE Cont.Perc | ER Cont.Perc | ||
|---|---|---|---|---|---|
| Basic | 1500 | 5% | 10% | ||
| Complementary | 2750 | 5% | 10% | ||
| Pension Increment | 2750 | 2.5% | 1% | ||
| Unemployment Ins. | 2750 | 0.5% | 0.5% |
And the lower limit = 230
Example 1: Employee's salary = 200
EE Contribution = 200 x (5% + 2.5%+0.5%)
ER Contribution = 200 x (10% + 1%+0.5%) + 30 x (5% + 10% + 2.5% + 1% + 0.5% + 0.5%)
Example 2: Employee's salary = 500.
Since it is less than the first limit 1500, only basic contribution and retirement pension increment contribution are applicable.
EE Contribution = 500 x (5% + 2.5% + 0.5%)
ER Contribution = 500 x (10% + 1% + 0.5%)
Example 3: Employee's salary = 1750
EE Contribution = 1500 x 5% (basic contribution) + 250 x 5% (complementary contribution) + 1750 x (2.5% + 0.5%)
ER Contribution = 1500 x 10% (basic contribution) + 250 x 10% (complementary contribution) + 1750 x (1% +0.5%)
Example 4: Employee's salary = 2800
EE Contribution = 1500 x 5% (basic contribution) + 1250 x 5% (complementary contribution) + 2750 x (2.5% + 0.5%)
ER Contribution = 1500 x 10% (basic contribution) + 1250 x 10% (complementary contribution) + 2750 x (1% + 0.5%)
General Data in Customer Master General Data in Customer Master
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Length: 5442 Date: 20240523 Time: 220031 sap01-206 ( 83 ms )
