Payroll and Benefits Guide - Bahrain

Bahrain
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Currency

Bahraini Dinar
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Capital

Manama
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Employer Taxes

17.00%+
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Date Format

dd/mm/yyyy
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Fiscal Year

1 Jan – 31 Dec

Fun Facts

It is believed that Bahrain has been inhabited for over 5,000 years, making it one of the oldest civilizations in the world.

The official language of Bahrain is Arabic, but English is widely spoken, especially in business and commerce.

Bahrain is the smallest country in the Arab countries in terms of land area.

The name “Bahrain” means “two seas” in Arabic.

Bahrain is known for its rich pearl diving history.

The country has a vibrant festival scene.

Bahrain

Contributions

Contribution TypeRate
Insurance against old age, disability, and death (applicable only to Bahraini employees)8.00%
Insurance against unemployment injuries1.00%

Employer Payroll Tax

Contribution TypeRate
Old Age, Disability, and Death Insurance (GOSI)14% (local workers) / 3% (expat workers)
Insurance against employment injuries (applicable to all employees)3.00%
Ministry of Health, Healthcare feeBD 72 per annum for every non-Bahraini worker
Ministry of Health, Healthcare feeBD 22.5 per annum for every Bahraini worker

Payroll

Payroll Cycle

Employees who are paid a salary receive payment at least once per month, usually at the end of the month.

13th Salary

Bahrain does not require the payment of a thirteenth salary.

Work Hours and Week

Depending on company policy, Bahrain’s workweek can be between 40 and 48 hours long. All employees are legally required to work fewer hours during the month of Ramadan, but many businesses only do so for Muslims who fast during the day.

Overtime

The daily maximum for overtime should be two hours. When working during the day or at night, employees receive their regular pay plus at least 25% more for each additional working hour.
Bahrain

Leave

Paid Time Off

An employee who has worked for at least a year is entitled to paid annual leave at their regular rate for a minimum of 30 working days at a rate of 2.5 days per month.

Public Holidays

Religious holidays are predicated on the lunar cycle and will be announced closer to the holiday.

Sick Days

After three months of service, employees are eligible for statutory sick leave as long as they can demonstrate their illness with a certificate from a doctor the employer has approved. Every year of employment entitles workers to 55 days of sick leave.

Maternity Leave

Employees who are pregnant are granted 75 days of maternity leave. The first 60 days are entirely paid for, while the final 15 days are not.

Paternity Leave

Although employers are required to provide up to 5 days of paid paternity leave after the birth, most only do so in practice.

Termination

Termination Process

An employer must have sufficient reasons for terminating an employee and give them advance notice in order to do so.

Notice Period

Following the formal notification at least 30 days before the termination date, either the employer or the employee may terminate the contract.

Severance Pay

Up until the termination date, employees may be eligible for salary and benefits.

Probation Period

Probation Period

Probation periods in Albania are typically three months.

Immigration

VISA

All foreigners must possess a work permit from the Labor Market Regulatory Authority (“LMRA”) in addition to an employment residency visa issued by Bahrain’s immigration authorities in order to live and work in Bahrain. Gulf Cooperation Council citizens don’t need residency visas, but they must register with the LMRA in order to get a work permit.

VAT

10% is Bahrain’s standard VAT rate.