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How to hire and pay employees in Bahrain
Slasify
Jun 21, 2025
| Key Takeaways |
|---|
| 1. Payroll is monthly with flexible payment for production-based work and no mandated minimum wage, ensuring timely employee compensation. |
| 2. There are no personal income or local taxes on employment income. Employer and employee social insurance contributions vary by nationality and salary. |
| 3. Standard working hours are 48 per week (8 hours/day; 6 hours/day during Ramadan for Muslims), with legally mandated breaks and overtime paid at 125–150%. |
| 4. Annual leave is 30 days with 15 public holidays, plus maternity, paternity, parental, bereavement, marriage, and pilgrimage leave entitlements. |
| 5. Termination rules require a 30-day notice period with proper procedures for disciplinary dismissals. Severance is handled by the Social Insurance Organization; probation is limited to 3–6 months depending on the contract. |
Discover the global hiring and employment landscape in Bahrain – a leading financial and business hub in the Gulf region.
Personal Income Tax
There are no personal income taxes in Bahrain.
Local Tax
There are no local taxes on employment income in Bahrain.
Statutory Contributions
Social Insurance contributions are required for all employees, local and foreign, albeit at different rates, calculated based on the employee's salary of up to BHD 4,000 per month.
Note: The contribution rate for nationals of other Gulf Cooperation Council (GCC) countries working in Bahrain shall be in accordance with regulations in their respective countries.
Employer Contribution
| Contribution rate for locals | Note | |
|---|---|---|
| End-Of-Service Benefit | 4.2% |
This rate only applies for the first 3 years of the employee's service. Afterwards, the contribution rate increases to 8.4%. This only apply to non-GCC nationals. |
| Social Insurance | 17% | This rate only applies to Bahraini citizens. The rate for expatriates is set at 3%. |
Employee Contributions
| Contribution rate for locals | Note | |
|---|---|---|
| Social Insurance | 8% | This rate only applies to Bahraini citizens. The rate for expatriates is set at 1%. |
Payment of Wages
Wages of a monthly rated employee shall be paid at least once a month.
If the wage is paid on the basis of production, and the work period exceeds 2 weeks, the employee shall receive an advance payment each week in accordance with the completed work. The remaining amount shall be paid during the week following the completion of the contracted work.
In all other cases, wages shall be paid once a week at most, unless otherwise agreed upon between the parties.
Minimum Wage
There is no mandated minimum wage for the private sector in Bahrain.
Statutory Bonus
There are no statutory bonus requirements in Bahrain.
Termination
An employment contract can be terminated by either party with a written notice, provided that the relevant notice period is observed. However, in the event that the employee is dismissed for a disciplinary reason, the employer must follow the proper procedure as laid out in Article 76 of the Labor Law.
The procedure for dismissing an employee for disciplinary reasons generally involves giving the employee a written notice of their alleged faults, hearing the employee's defense and conducting an investigation into the facts of the matter before finalizing the employee's dismissal.
Notice Period
An employment contract may be terminated by either party by observing a 30-day notice period, which can be made longer by agreement in the event that the termination is initiated by the employer.
In the event that the employee is dismissed, the employee may be entitled to a paid day off per week during their notice period to look for a new job, provided that their absence is suitable with the work circumstances.
Regardless of the above, an employee may resign without notice for reasons stipulated in Article 105 of the Labor Law, in which case the termination shall be deemed an arbitrary dismissal by the employer. Similarly, an employer may also dismiss their employees without notice for reasons stipulated in Article 107 of the Labor Law.
Severance Pay
Employers are not responsible for paying any severance, or end-of-service benefits, to their employees as this responsibility has been taken over by the Social Insurance Organization.
However, employers may still be held liable to compensate their employees if they terminate the employment contract without any legitimate reason or when the termination is deemed to be arbitrary.
Probationary Period
A probationary period is permitted if expressly specified in the employment contract, provided that such period does not exceed 3 months and that the same employer does not employ an employee under probation more than once.
The duration of the probationary period may be increased to up to 6 months for certain work as determined by virtue of the Minister's decision. The probation condition shall only be retained if expressly specified in the contract.
Either party may terminate the contract during the probationary period if they find its continuance not appropriate, provided that the terminating party notifies the other party at least a day before in advance.
Work Time Rules
Standard Working Hours
An employee's standard working hours are subject to a maximum of 8 hours per day and 48 hours per week.
Muslim employees shall not be employed during the month of Ramadan for more than 6 hours per day or 36 hours per week.
Break Period
Employees shall be entitled to break period(s) for prayer, meals or rest, the duration of which shall be at least 30 minutes, taking into account the fact that they may not work for more than 6 consecutive hours without break. An employee's break period shall not be calculated as part of their effective working hours.
Moreover, after the end of their maternity leave and until their child reaches 6 months of age, the employee shall be entitled to 2 breastfeeding periods of at least an hour each. They are also entitled to 2 periods of 30 minutes to provide care for their child each until their child reaches 1 year of age.
The employee can join these periods and these additional periods shall be deemed part of the employee's working hours and shall not entail any wage deduction.
Overtime
Employers may require their employees to work overtime if so required by the circumstances of their work.
Employees required to work overtime must be paid at 125% of their normal wages for the hours performed during the day and 150% for those performed at night.
Weekly Rest Days
Employees shall be entitled to a full day of rest per week, which generally falls on Fridays.
Employers may require their employees to work on their weekly rest day if so required by the circumstances of their work, provided that they are compensated with either another day of rest or an additional wage equivalent to 150% of their normal wage.
In any case, no employee shall be employed on their weekly rest day more than 2 consecutive times unless by virtue of their written consent.
Holiday and Leave Entitlements
Public Holidays
Employees shall be entitled to be on paid leave during Eid and other official holidays. There are 15 days of public holidays in Bahrain for 2025.
| Holiday | Date |
|---|---|
| New Year’s Day | January 1 |
| Eid al-Fitr | March 30–April 1 |
| Labor Day | May 1 |
| Arafat | June 5 |
| Eid al-Adha | June 6–8 |
| Islamic New Year | June 26 |
| Ashura | July 5–7 |
| The Prophet’s Birthday | September 4 |
| Bahrain National Day | December 16 |
Employers may require their employee to work on a public holiday if so required by the circumstances of the work, provided that the employee receives their wage for the day and either another day of rest or an additional wage equivalent to 150% of their normal wage.
Annual Leave
Employees with a full year of service shall be entitled to at least 30 days of paid annual leave, accruing at a rate of 2.5 days per month.
The employer shall set the dates of the annual leaves in accordance with the work requirements and, and the employee shall take their leave on the date and for the period set by the employer.
In any case, employees must take at least 15 days of their annual leave, including at least 6 consecutive days. Any unused leave can be carried over to the subsequent year, provided that the employer offsets the balance of the leaves against the wage corresponding to said balance every 2 years at most.
Sick Leave
Employees who have completed at least 3 months of service shall be entitled to the following sick leave per year:
| Duration of leave | Sick leave pay |
|---|---|
| 15 days | Full pay |
| 20 days | Half pay |
| 20 days | No pay |
Employees may accumulate the balance of sick leaves on full or partial pay to which they are entitled to for a period not exceeding 240 days.
Maternity Leave
Female employees shall be entitled to 60 days of paid maternity leave, provided that they produce a valid medical certificate indicating their expected delivery date. This leave can be taken before and after the child's delivery, but the employee should not be employed during the 40 days after their delivery.
The employee has the right to obtain an additional 15 days of unpaid maternity leave.
Paternity Leave
Employees shall be entitled to a day of fully paid leave upon the birth of their child.
Parental Leave
Female employees shall be entitled to take unpaid leave to provide care to their child under 6 years old for a maximum of 6 months in each case, and up to 3 times throughout the period of their service.
Other Leave
| Leave | Pad Unpaid | Duration | Note |
|---|---|---|---|
| Bereavement Leave | Paid | 3 days | For employees whose spouse or relatives to the fourth degree of kin, or spouse's relatives to the second degree of kin has died. |
| Iddah Leave | Paid | 1 month |
For Muslim female employees whose spouse has died. Moreover, these employees shall be entitled to take 3 months and 10 days from their paid annual leave balance, which if insufficient means that the leave will be unpaid. |
| Marriage Leave | Paid | 3 days | For employees to take in the event of their marriage. This leave can be taken once. |
| Pilgrimage Leave | Paid | 14 days | For Muslim employees with at least 5 years of service to perform their Hajj obligations. This leave can only be granted once. |
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