Employment Law

Employment Contracts in Bahrain

Employers in Bahrain are required to provide a formal written contract for each employee they employ in the country. These contracts need to contain all the details of the employment arrangement, such as wages/salaries, benefits, termination rules, etc. They should also be written in Arabic and use the local currency, the Bahraini dinar.

Fixed Term

Indefinite

Bahrain Working Hours

The standard working week in Bahrain is 40 to 48 hours, five days in total. Generally, Friday and Saturday are rest days. Ramadan affects these times.

Holiday Policy

Vacation in Bahrain

Employees in Bahrain are generally entitled to 30 days of paid leave per year. This right is acquired after one year of service to the employer. Prior to this, leave has been accrued (2.5 days/month).

After five years of employment, Muslim employees also receive a one-time 14-day paid benefit dedicated to a pilgrimage to Mecca.

Bahrain Sick Leave

Generally speaking, Bahraini employees are entitled to up to 35 days of paid sick leave per year. The first 15 days are paid at 100% of the normal salary, and the next 20 days are paid at 50% of the normal salary. You can also continue working without pay for 20 days.

Parental Leave in Bahrain

Female employees in Bahrain are generally entitled to 75 days of maternity leave, of which 40 days are mandatory postpartum leave. The first 60 days are paid leave and the remaining 15 days are unpaid.

Termination and Severance in Bahrain

In Bahrain, employees on indefinite contracts who have worked for at least three months are entitled to severance pay upon termination. This payment varies according to the length of service, as it is usually equivalent to two days' salary per month of service. For fixed-term contractors, employees are usually payable for the remainder of the contract when they are terminated before completion.

Notice of termination is usually 30 days or more.

Bahrain Tax

Bahrain has no personal income tax. There is also no general corporate tax for most companies. However, employers must pay a 3% tax on employees' wages.

Employees must contribute 1% of their wages to unemployment insurance and 6% to social security. Employers must contribute 9% of wages to social security.

Health Insurance in Bahrain

Bahrain has a public healthcare system, but foreigners may not be eligible for insurance and should always purchase private insurance. Some employers choose to offer private health insurance as an employee benefit, but this is fairly rare.

Salary and Benefits

Bahrain’s Compensation Law

Bahrain does not have a mandatory minimum wage for private sector employees.

Welfare Management in Bahrain

Setting up a benefits system for employees in Bahrain can be confusing if you're not familiar with the country's complex labor laws, language and cultural differences, so delays are common.

Outsourcing your benefits administration processes ensures you fully understand and follow the rules, ensuring your compliance and significantly speeding up the process. At Horizon, our Bahrain employment experts will help you find and arrange your benefits, advise on your strategy and ensure compliance with the law.