Do expatriate employees in Bahrain still get end-of-service gratuity?

Yes, but the funding changed. Since 1 March 2024, employers pay a monthly contribution to the Social Insurance Organization: 4.2% of wages for the first 3 years of service and 8.4% after that. The SIO pays the award when employment ends. Service before March 2024 is still settled by the employer.

How much social insurance do you pay for a Bahraini employee?

From 1 January 2026, the employer pays 18% of wages and the employee pays 8%, on wages up to BHD 4,000 a month. Expatriate employees cost much less in social insurance: 3% from the employer and 1% from the employee, plus the gratuity contribution.

How does Good Balance Global hire employees in Bahrain?

As your Employer of Record (EOR), we become the legal employer. We sponsor the work permit, issue a compliant contract, run monthly payroll, and pay SIO contributions on time. You direct the employee's day-to-day work.

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Payroll and benefits guide

Bahrain

CapitalManama

Fiscal Year1 January - 31 December

Date Formatdd/mm/yyyy

CurrencyBHD (Bahraini Dinar)

Payroll FrequencyMonthly

Employer Taxes7.2% – 18%

Employee Costs1% – 8%

Overview

Languages: Arabic
Income tax: 0%
VAT: 10%; In force since 1 January 2019; the rate rose from 5% to 10% in 2022

Contributions

Employer

18%

Social insurance (Bahraini employees)Effective 1 January 2026; on wages capped at BHD 4,000/month

Work injury insurance (expatriate employees)On wages capped at BHD 4,000/month

4.2% – 8.4%

End-of-service gratuity (expatriate employees)4.2% for the first 3 years of service, 8.4% after that; paid monthly to the SIO since 1 March 2024

7.2% – 18%

Total employer cost

Employee

Social insurance (Bahraini employees)Includes 1% unemployment insurance

Unemployment insurance (expatriate employees)

1% – 8%

Total employee cost

Authority Payments

Authority PaymentPaid ToDue DateMethod

Authority Payment

Social insurance and expatriate gratuity contributions

Paid To

Social Insurance Organization (SIO)

Due Date

Within the first 15 days of the following month

Method

Online through the SIO portal

Authority Payment

Income tax withholding

Paid To

Not applicable

Due Date

Not applicable

Method

Bahrain does not tax employment income

Minimum Wage & Working Hours

Minimum wage: None / —; No statutory minimum wage for the private sector
Standard working hours: 8 hours per day, 48 hours per week; Reduced hours for Muslim employees during Ramadan
Overtime: At least 125% of the hourly wage for daytime overtime and 150% at night

Leave

Annual leave30 daysFully paid after 1 year of service; accrues at 2.5 days per month before that
Sick leaveUp to 55 days per year15 days at full pay, 20 days at half pay, and 20 days unpaid; medical certificate required
Maternity leave75 days60 days at full pay and 15 days unpaid
Paternity leave1 dayPaid by the employer
Public holidays14 daysFully paid under Cabinet Decision 1 of 2013: New Year's Day, Labour Day, Hijri New Year, Ashura (2 days), the Prophet's Birthday, Eid al-Fitr (3 days), Eid al-Adha (3 days), and National Day (2 days). A holiday that falls on a Friday or another holiday is replaced with another day off

Leave type	Duration	Notes
Annual leave	30 days	Fully paid after 1 year of service; accrues at 2.5 days per month before that
Sick leave	Up to 55 days per year	15 days at full pay, 20 days at half pay, and 20 days unpaid; medical certificate required
Maternity leave	75 days	60 days at full pay and 15 days unpaid
Paternity leave	1 day	Paid by the employer
Public holidays	14 days	Fully paid under Cabinet Decision 1 of 2013: New Year's Day, Labour Day, Hijri New Year, Ashura (2 days), the Prophet's Birthday, Eid al-Fitr (3 days), Eid al-Adha (3 days), and National Day (2 days). A holiday that falls on a Friday or another holiday is replaced with another day off

Termination

Probation period: Up to 3 months; up to 6 months for occupations set by ministerial resolution
Notice period: At least 30 days after probation
Severance pay: Expatriate gratuity is paid by the SIO from the monthly contributions for service since 1 March 2024; the employer settles service before that date under the Labour Law
13th salary: Not mandatory
Notes: Bahraini employees are covered by the pension system instead of gratuity

Benefits

Private health insuranceCommon
Employer-paid medical cover is standard for professional roles
Housing and transport allowancesCommon
Often paid as fixed monthly allowances on top of basic salary

Visas & Work Permits

LMRA work permit
Duration
Up to 2 years, renewable
Requirements
Employer sponsorship and a job offer from a Bahrain-registered entity
Golden Residency
Duration
10 years
Requirements
Long-term residence for qualifying residents, investors, and professionals

FAQ

Sources

Last updated: November 1, 2026

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