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EOR IN Bahrain
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A guide to employing and growing your team in Bahrain
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Employment in Bahrain is governed by Labour Law No. 36 of 2012. For 2026, the key regulatory focus is the continued annual 1% increase in employer social security contributions for Bahraini nationals and the full implementation of the Funded End-of-Service Benefit (EOSB) system for expatriates. The labor market is regulated by the Labour Market Regulatory Authority (LMRA).
Employer Contributions
For Bahraini Nationals: 18.00% (Increasing by 1% annually until it reaches 20% in 2028).
For Expatriates (SIO EOSB Fund):
4.20% of monthly wage for the first 3 years of service.
8.40% of monthly wage for years thereafter.
Work Injury Insurance (Expats): 3.00%.
Total Employer Contribution: 18.00% (for Bahrainis) or ~7.2% – 11.4% (for expats).
Employee Payroll Taxes
Social Insurance (Bahraini Employees): 8.00% (7% pension + 1% unemployment).
Social Insurance (Expatriate Employees): 1.00% (Unemployment insurance only).
Personal Income Tax: 0%
Employee Income Tax Rates
There is no personal income tax in Bahrain. This 0% rate applies to all salary, allowances, and bonuses for both residents and expatriates.
Statutory Leave
Employees are entitled to 30 calendar days of paid annual leave per year (accrued at 2.5 days per month). An employee usually becomes eligible to take this leave after 6 months of service. Bahrain observes approx. 14 public holidays; if a holiday falls on a weekend, it is typically “recovered” on the next working day.
Hajj Leave: Muslim employees with 5+ years of service are entitled to 21 days of paid leave for their pilgrimage (once during their tenure).
Pregnancy and Maternity Leave
A female employee in Bahrain is entitled to 60 days of fully paid maternity leave, which she can take before or after the delivery, provided she presents a medical certificate. Following this period, she may apply for up to six months of unpaid childcare leave, a benefit that can be utilized up to three times during her total employment. To support her return to work, she is legally entitled to two breastfeeding breaks of one hour each per day until the child is six months old, followed by two 30-minute childcare breaks per day until the child reaches one year of age.
Paternity Leave
Bahraini labor law does not currently mandate paid paternity leave in the private sector. While some companies may offer 1-3 days as part of their internal policy, there is no statutory requirement under the 2012 Labour Law.
Work-Related Injury Leave
Sick Leave: Employees are entitled to 15 days at full pay, 20 days at half-pay, and a further 20 days without pay per year (subject to medical certification).
Compassionate Leave: 3 days of paid leave for the death of a close relative or spouse.
Marriage Leave: 3 days of paid leave (granted once).
Termination Process
Termination must follow the procedures outlined in the Labour Law. For non-performance or redundancy, a written notice is required. If an employer dismisses an employee without a valid reason, it may be considered arbitrary dismissal, entitling the employee to compensation (typically 1 to 3 months’ salary). Summary dismissal without notice is only permitted for gross misconduct (e.g., theft, assault, or persistent intoxication).
Notice Period
Monthly-paid employees: Minimum 30 days’ notice.
Tenure-based: Contracts often specify longer periods (60-90 days) for senior management.
Payment in Lieu: Either party can end the contract immediately by paying the gross salary for the notice period duration.
Probation Period
The maximum probation period is 3 months. However, it can be extended up to 6 months by mutual written agreement. During probation, either party can terminate the contract without notice and without indemnity, unless the contract specifically states otherwise.