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Employer of Record (EOR) Bahrain - Hire & Pay Employees & Contractors with a Global PEO

An Employer of Record (EOR) in Bahrain is a company that takes on the responsibility of being the legal employer for a worker. This includes managing payroll, benefits, and other employment-related tasks on behalf of the worker's actual employer.

Employer of Record (EOR) Bahrain

Discover the key considerations and essential details you should be aware of before opting for an Employer of Record (EOR) in Bahrain.

Bahrain Employment Contracts

Here are the key insights about employment agreements in Bahrain

  • All employment contracts must be documented in writing and in Arabic. In case if the employment contract is in non-Arabic language, a copy of the Arabic version must be attached to the actual contract.
  • All employment contracts in Bahrain must include
    • Business name, Address, Commercial registration number
    • Employee name, Address, Nationality, Designation, Qualification, Proof of Identity and the Date of Birth.
    • Scope of work, Employment type and the Duration.
    • Salary, Payment Date and the Mode of payment
  • Obligations of the Employers
  • Obligations of the Employee
  • Probation Period
  • End of Service Benefit Policy
  • Leaves

Here is sample work contract from LMRA. Both the employer and the employee must have a copy of the work contract. All employment contracts must be registered with LMRA in order to obtain a work permit and residency visa. Here are the steps to document service agreements between employer and the service provider.

Working Hours

The working hours in Bahrain cannot exceed 48 hours per week. During Ramadan, the working hours cannot exceed 36 hours per week for Muslims.

Overtime Pay

Employees are entitled to receive an overtime pay of 1.5 times in Bahrain.

Employees vs Independent Contractors in Bahrain

The standard employment types when hiring employees in Bahrain are unlimited or fixed-term contracts. While part-time employment is legal, it is uncommon to hire employees part-time in Bahrain. Consulting is not widely accepted in the country. Self-employed individuals can be engaged as independent contractors if they hold a professional license or operate a business.

Minimum Wages

There is no legally mandated minimum wage in Bahrain. The legal minimum wage for Bahrain nationals in the public sector is 300 BHD per month. The minimum wage for diploma holders is 380 BHD per month. The minimum wage for university degree holders is 450 BHD per month.

Payroll in Bahrain

In Bahrain, payroll is typically processed monthly and the salaries are paid at the end of month in Bahrain local currency, Bahrain Dinar (BHD). Payroll records must be retained for at least 5 years.

Probation Period, Notice Period and Severance Pay

The probation period in Bahrain can be up to three months and may be extended to six months for certain roles. The combined duration of the original and extended periods should not exceed six months. Either party can terminate the contract with a 30-day notice period.

Severance Pay or End-of-Service benefits are calculated based on the length of employment. For the initial five years, severance equals half a month’s pay. For each subsequent year after the first five years, monthly severance is equivalent to one month’s gross salary.

In the event of unlawful termination, severance pay varies based on the contract type. For definite contracts, severance pay equals the gross wages for the remaining contract duration or two months’ wages, whichever is greater. For indefinite contracts, severance pay is calculated as 15 days for each year of service or two months’ gross wage, whichever is greater.

13th Month Salary

It is not legally mandated to pay 13th month salary in Bahrain.

Social Security in Bahrain

Social Insurance Organization (SIO) provides social insurance and pension services in the Kingdom of Bahrain. The Labour Market Regulatory Authority (LMRA) in Bahrain is a government agency responsible for regulating the labor market and employment-related matters in the Kingdom of Bahrain.

Social Security Contributions in Bahrain

Social Security contributions were calculated based on the nationality of the employees.

  • Bahrani Workers: Employers contribute 12% and employees contribute 7% of social insurance salary towards social security.
  • Non-Bahrani Workers: Employers contribute 3% and employees contribute 1% of social insurance salary towards social security.

Category Bahraini Workers Non-Bahraini Workers
Social Insurance (Employer) 12% 3%
Social Insurance (Employee) 7% 1%

Employees' salary is capped at BD 4000 while calculating the social security contributions. This is called social insurance salary.

Bahrani Workers

Employers% of Gross Salary
Pension Fund9
Work Related Injury Fund3
Total Employment Cost12

Employees% of Gross Salary
Pension Fund6
Total Employee Cost7

Personal Income Tax in Bahrain

There is no personal income tax in Bahrain.

Employee Benefits in Bahrain

Statutory Leaves in Bahrain

Leave Type Duration Pay/Entitlement
Annual Leave 30 calendar days Full pay; Cannot be waived, postponed, or received as payment in lieu
Maternity Leave 60 days (full pay), extendable to 75 days without pay Additional two hours each day for nursing upon return
Paternity Leave Up to 5 days after birth No additional benefits
Sickness 55 calendar days Full pay for the first 15 days, half pay for the next 20 days, no pay for the remaining 20 days; No sick leave during probation
Overtime Payment for overtime work Wage for the day plus overtime wage based on overtime falling on a weekend or weekday
Pilgrimage 14 working days Full pay for Muslim employees with five consecutive years of service for Hajj

Public Holidays in Bahrain

Public Holiday Number of Days
New Year's Day 1 Day
Labour Day 1 Day
Eid Al Fitr 3 Days
Eid Al Adha 3 Days
Al Hijra New Year 1 Day
Ashoora 2 Days
Prophet's Birthday 1 Day
National Day 1 Day
Accession Day 1 Day

Bahrain Overview

Time zoneUTC+03:00
Total Time zones1
Working hours per week40
Working weekSunday–Thursday
Typical hours worked8 (6 during Ramadan for Muslim employees)[24]
Personal Tax filing deadlineNA
Financial Year1st January to 31st December
Date formatdd/mm/yyyy
CurrencyBahraini Dinar (BHD)
VATthe standard rate is 5%


Choosing an Employer of Record (EOR) in Bahrain proves to be a strategic decision for companies embarking on global expansion. Entrusting the EOR with tasks like navigating local employment regulations, handling payroll intricacies, and ensuring compliance allows businesses to seamlessly establish a foothold in Bahrain without the complexities of establishing a legal entity. This collaborative partnership empowers companies to focus on core objectives and growth strategies while ensuring that their workforce in Bahrain operates in full compliance with local laws. The EOR streamlines international employment procedures and provides expert guidance in navigating the nuanced landscape of Bahrain's employment regulations.