How to hire and pay employees in Bahrain

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Bahrain Facts and Stats

Currency

Bahraini Dinar (BHD).

Employer Costs

Estimated at 17% of employee’s salary.

Languages

Language: First language is Arabic, but English is widely spoken due to large ex-pat population. The English language is the de facto national working and primary business language. It is a compulsory second language in most of the schools in Bahrain.

Population

1.5 million.

Payroll frequency

Monthly.

Hiring

Grow your team in Bahrain

No entity, no problem

To start growing your team in Bahrain, you must establish a local entity- including an account with a local bank, a local office and an address registered as a subsidiary. This allows you to manage payroll, tax, benefits and compliance for your employees, but can take several months.

Emerald can hire and payroll your workers quickly and compliantly with their ‘ready to go’ entity. Make growing your team simple with Emerald as a global partner.

Emerald can hire and payroll your workers, quickly and compliantly with their ready to go entity. Make growing your team simple with Emerald as a global partner.

Pros & Cons of hiring in Bahrain

Hiring remotely in Bahrain offers several key advantages for employers. The country has a well-educated workforce, particularly in sectors like finance, IT, and telecommunications, providing access to highly skilled professionals. Bahrain’s strategic location in the Gulf region allows for convenient collaboration with businesses across the Middle East, Europe, and Asia, thanks to its time zone (UTC+3). Many Bahrainis are fluent in English, facilitating smooth communication for international companies. Additionally, Bahrain boasts a strong digital infrastructure, making remote work efficient and reliable. With a business-friendly environment, employers can benefit from reduced operational costs while accessing top talent.

Why Bahrain is good for remote workers

Argentina has offered a Digital Nomad Visa since May 2022 and is one of the safest South American countries. These factors, combined with good internet speeds throughout the country and a favourable time zone for collaboration with European colleagues, make Argentina an attractive option for remote workers.
The trend towards remote work is increasing, with most companies offering a hybrid working model (office and home).
Income tax in Argentina is divided into nine different brands, ranging from 5% all the way up to 35%.

Start growing your remote workforce now

Employer Costs
Old Age, Disability & Death Insurance (GOSI):14% Local workers, 3% Expat workers.
Insurance against employment injuries:(applicable to all employees) 3%.
Healthcare:BHD 22.5 per annum for Bahraini workers/BHD 72 per annum for non-Bahraini workers.
Benefits

Mandatory Benefits

Social and health insurance.

Annual Leave.

Sick Leave.

Maternity and Paternity Leave.

Public Holidays.

End of service gratuity.

Employment

Probation

Probation periods for employees in Bahrain typically lasts up to 3 months but this can be extended to 6 months, dependent on the nature of the job and the mutual agreement between the employer and the employee. During the probation period, a minimum of 1 day notice is required.

Emerald Technology can onboard employees in Bahrain within 48 hours.

Insurance
01.

Health Insurance:

The public healthcare system in Bahrain is government funded through taxation, but a lot of people opt for private health insurance. The public system offers services such as general outpatient care, emergency services and hospitalization for free or at lower costs and it is available to Bahraini citizens and some residents. It is mandatory for expatriates to have health insurance and this is typically provided by their employers as part of their employment package.

02.

Social Security Contributions:

In Bahrain, the social security contributions provide financial protection for employees and their dependents and this is managed by the Social Insurance Organisation. These contributions are mandatory for all employees in the formal sector to provide benefits including pensions, disability support, survivor benefits and health insurance. Employees contribute approximately 7% of their monthly salary and employers contribute around 11% of each employee’s monthly salary.

Leave Policy
01.

Maternity Leave:

On her return, the employee will be entitled to an additional two hours each day for nursing until the child reaches six months of age. Then, women receive two breastfeeding periods of no less than 1 hour each.

02.

Paternity Leave:

New fathers are entitled up to 5 days leave post-birth, with most companies offering 1 day of paid leave.

03.

Pilgrimage leave:

A Muslim employee with 5 years of consecutive service in employment is entitled to a leave of 14 working days with full pay to perform Hajj once during the period of service provided that the employee has not availed of this leave in any previous employment.

04.

Sickness Leave:

Employees are not entitled to statutory sick leave once they have completed 3 months’ service and provided, they have proven their sickness with a certificate from a medical professional approved by the employer. Employees are entitled to 55 days of sick leave per year of service, thereafter, paid as follows:

  • The first 15 days of sick paid at full pay,
  • The subsequent 20 days of sick paid at half pay,
  • The next 20 days of sick unpaid.

The entitlement of a worker to sick leave on full or half pay may be accumulated for a period not exceeding 240 days.

Onboarding

Onboarding

As the legal employer, Emerald Technology requires the following employee documents to ensure complete compliance:

Emerald Technology can onboard employees in Bahrain within 48 hours.
Termination

Resignation and Dismissal

When an employer dismisses an employee it must be with just cause and they must give them notice. The notice period starts from the day after the employer notifies the employee of the termination. Notice must be given in accordance with the following schedule at a minimum:

Notice Periods:

Either the employer or employee may terminate the contract following the official notification at least 30 days before the date of the termination. The labour contract remains in force during the notice period and its parties shall execute all the obligations arising from it. If notice is not given, payment in lieu must be made. During the probation period the notice period is one day.

Compensation

Unless terminated under Article 107 of the Labor Law, employees may be entitled to salary and benefits up to the termination date, notice (or payment in lieu), payment in lieu of accrued but untaken annual leave, an end-of-service gratuity payment (EOSG), and reimbursement of unpaid business expenses.In case of employer termination, employees are eligible for payment of an EOSG based on the length of service generally calculated at: Up to three years’ service at 50% of the regular monthly salary for each year of service More than three years’ service at 100% of regular monthly salary for each year of service after three years The calculation is pro-rated for any fractions of a year of service that have not been completed. The calculations above are for the period before March 2024. Since March 2024, Indemnity for EOSG is now paid per month, in the following rates: In the first 3 years of service, the rate is 4.2% of the worker’s monthly salary, on a monthly basis. After 3 years of service, the rate is 8.4% of the worker’s monthly salary, on monthly basis.

Time off

Statutory Time off

An employee with at least one year of service is entitled to paid annual leave at the regular salary of no less than 30 working paid days at the rate of 2.5 days for each month.

Public Holidays

  • New Year’s Day
  • Eid al-Fitr
  • Labour Day
  • Eid al-Adha
  • Islamic New Year
  • Ashura
  • Prophet Muhammads Birthday
  • National Day Holiday
Emerald Technology can onboard employees in Bahrain within 48 hours.
Salary / Taxes

Work, Pay and Taxes

01.

Minimum Wage:

Bahrain does not currently have a minimum wage.

02.

Working Time and Overtime:

The working week in Bahrain tends to vary between 40 and 48 hours depending on company policy. In the month of Ramadan, the working day is reduced to six hours and legally this should apply to all staff, but many companies only apply it to Muslims who fast during daylight hours. Friday is the Muslim rest day, but some companies with a five-day workweek give off either Thursday or Saturday. Saturday is often the most popular choice for international companies as taking Thursday off would mean a reduction in the number of operational days in common with much of the rest of the world. Conversely, other companies insist on Thursday, as the school ‘weekend’ is Thursday and Friday. Workers are not to be present at the workplace for more than 11 hours per day. This includes working hours plus rest breaks. Overtime: Employees should do a maximum of 2 hours overtime per day. During the day employees should receive their wage + 25%, and during the night this is raised to 50%. Senior managers are exempt from any overtime pay.

03.

Salary Payments:

Salary payments are paid monthly, generally at the end of month.

04.

Bonuses in Bahrain:

13th Month: There is no requirement for a 13th months’ pay in Bahrain.

05.

Income Tax:

There is no personal income tax rate in Bahrain.

Group 1977

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