Bahrain Employment, Benefit and Payroll Guide

Bahrain Employment, Benefit and Payroll Guide

Bahrain offers a favorable business environment, with a diversified economy, a high standard of living, and a strategic location in the Gulf region. Expanding your business in Bahrain can provide you with access to a range of opportunities in various sectors, from finance and manufacturing to tourism and healthcare. The government of Bahrain has implemented a range of economic reforms to attract foreign investment and promote economic growth, including the introduction of new business regulations, investment in infrastructure, and support for startups and small businesses. Bahrain is also home to a highly skilled and multicultural workforce, with a strong emphasis on education and training. With its strategic location, diversified business environment, and skilled workforce, Bahrain is an ideal destination for businesses looking to expand in the GCC region.
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Key Facts

Capital City: Manama
Currency:  Bahraini Dinar (BHD)
National holiday: Bahrain National Day, December 16th
Language: Arabic (official), English
Population: 1.7 million (2021 estimate)
Payroll Cycle: Monthly
VAT: 5%
Time zone: AST (Arabian Standard Time), UTC+3
International dialing code: +973
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Bahrain Payroll and Labor Laws

Bahrain has also implemented measures to encourage the employment of its citizens, including the Bahrainization program, which aims to increase the participation of Bahraini nationals in the private sector. Employers are required to meet certain quotas for the employment of Bahraini nationals, which vary depending on the size and type of business.

Overall, having a good understanding of Bahrain's payroll and labor laws is crucial for companies looking to establish or expand their operations in the country. By complying with these laws and regulations, companies can ensure that they are providing their employees with fair and equitable treatment, while also avoiding any potential legal issues or penalties.

Contributions

Employer
Pension: 9.00%
Work Injury: 3.00%
Unemployment: 1.00%

14.00% Total Employment Cost

Employee
Pension: 6.00%
Work Injury: 0.00%
Unemployment: 1.00%

7.00% Total Employee Cost

Minimum Wage

General
Bahrain does not have a statutory minimum wage.

Payroll

Payroll Cycle
Salaried employees are paid at least once a month.
13th Salary
Bahrain does not require employers pay 13th salaries

Working Hours

General
Employees work for 8 hours per day or an average of 48 hours/week. Workhours may also be extended for more than 8 hours per day but should not gobeyond 10 hours/day (Article 53).

Muslim workers, working hours during Ramadan should not go beyond 6 hours per day or 36 hours/week (Article51).
Overtime
Employees receive their wage plus at least 25 % for each additional working hour for hours worked during the day, and at least 50% for hours worked during the night.

Workers are not to be present at the workplace for more than 11 hours per day; This includes working hours plus rest breaks

Leave

Paid Time Off
An employee with at least one year of service is entitled to annual leave of no less than thirty paid days at the rate of two and a half days for each month.
Public Holidays
There are 8 public holidays amounting to 14 days of leave.
Sick Days
Employees receive 55 days of sick leave. The first 15 days are fully paid, the 16th to the 35th days are half-pay, and the 36th to the 55th day is unpaid.
Maternity Leave
Pregnant employees receive 75 days of maternity leave. The first 60 days are fully paid, and the last 15 days are unpaid.
Paternity Leave
Fathers do not receive paternity leave.
Parental Leave
Only mothers receive leave in the form of maternity leave.
Other Leave

Termination

Termination Process
To terminate an employee, an employer must have sufficient grounds for the termination as well as provide a notice period.
Notice Period
Either party to the contract may terminate this contract following the notification of the other party at least 30 days before the date of the termination.

The labor contract remains in force during the notice period and its parties shall execute all of the obligations arising from it.

If notice is not given, payment in lieu must be made
Severance Pay
Employees shall receive:

First three years: 15 days salary for each year.

From the fourth year: 30 days salary for each year

Probation Period
The probation period may last up to 3 months.

Visa

Visa
To work in Bahrain, foreign nationals must obtain a work visa and a residency permit.

Bahrain has a welcoming business environment and a thriving financial sector, making it an attractive destination for entrepreneurs and investors. The Bahraini government has implemented a range of economic reforms to attract foreign investment and promote economic growth, including reducing corporate taxes, streamlining business regulations, and investing in infrastructure. Bahrain also has a highly skilled and multilingual workforce, with a strong emphasis on education and training.

However, Bahrain has implemented the "Bahrainisation" policy, which aims to increase the number of Bahraini nationals in the workforce. This policy requires employers to prioritize Bahraini nationals over foreign employees when it comes to job opportunities.

Employers must obtain permission from the government to hire foreign employees, and foreign employees must have a residence visa and work permit under the sponsorship of their employer. With its strategic location, welcoming business environment, and skilled workforce, Bahrain is an ideal destination for businesses looking to expand in the GCC region.

Value Added Tax (VAT)

General
5.00%

Employ Your Staff Compliantly in the GCC with Auxilium's Expert Guidance

Are you planning to expand your business in the GCC region and looking to employ staff compliantly?

Look no further than Auxilium! Our team of experts can provide you with guidance on the complex payroll and labor laws in the GCC countries, ensuring that you are fully compliant with local regulations.

We can help you with everything from setting up payroll and social security contributions to navigating the various labor laws and regulations in the GCC countries.

With our expert guidance, you can focus on growing your business while we take care of the compliance. Contact us today to learn more about how we can help you employ your staff compliantly in the GCC region and ensure peace of mind.
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