Bahrain: A Guideline to Payroll and Employer of Record

Establish your presence globally with Neeyamo as we help you go beyond borders to manage your international payroll and hire new talent in Bahrain.

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Bahrain is a country in Asia that shares its borders with Iran, Qatar, and Saudi Arabia. The prominent industries in the country include Oil and Gas, Islamic and Offshore Banking, Aluminium smelting, Iron pelletization, Insurance, and Tourism.

Do your organization’s expansion plans require you to hire employees in Bahrain? Do you lack a physical entity in the country – a key requisite to hire local talent? Neeyamo assists organizations worldwide with onboarding and managing employees in Bahrain -processing payroll, managing local compliance requirements, benefits, and more.

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Facts And Stats




Bahraini Dinar (BHD)

Official Language


Fiscal Year

1 January - 31 December

Date Format


Country Calling Code


Time Zone

UTC + 03:00

Global Payroll


Handling payroll for a widespread workforce can pose a significant challenge for any organization, and the added complication of compliance can make things worse. If companies spend more time processing payroll, it directly impacts day-to-day operations and their overall productivity.

Over the years, Neeyamo has observed these complexities and strived to provide a global payroll solution through a single technology platform - Neeyamo Payroll.

Payroll Taxes

Payroll tax is the percentage amount retained from an employee's salary and paid to the government to invest in the general population's welfare. These are statutory in nature and are levied from both the employer and employee. Additional statutory contributions are made by employers towards aiding both short-term and long-term benefits for their employees.

Employee Taxes

Employee Contributions:

  • 7.00% Insurance against old age, disability, and death (applicable only to Bahraini employees)
  • 1.00% Unemployment
  • 8.00% - Total Employee Cost
  • Employee Income Tax
  • No personal income tax
  • Employer Taxes

    Employer Payroll Contributions

  • 9.00% Pension
  • 3.00% Work Injury
  • 72 BHD per annum for every non-Bahraini worker
  • Ministry of Health, Healthcare fee
  • 22.5 BHD per annum for every Bahraini worker
  • Ministry of Health, Healthcare fee
  • 12.00% + Healthcare fee - Total Employment Cost
  • Payroll Cycle


    Undoubtedly, payroll is a critical process for any organization. Pay cycle in Bahrain refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.


    Typically, salaried employees are paid at least once a month.

    13th Month Cycle

    Bahrain does not require employers to pay a 13th-month salary.

    Global Work


    An Employer of Record (EOR) service provider helps you eliminate the hassle of handling complexities while onboarding a new employee in an international location. They help bridge the gap that otherwise mandates organizations to have a locally registered entity and a local bank account before making a job offer to an international hire.

    An EOR service provider acts as a legal employer, facilitates salary payments, and manages other statutory requirements such as health insurance, payroll taxes, and employee benefits, ensuring compliance with local tax laws and regulations.

    This allows organizations to focus on collaborating with the employee in Bahrain for operational tasks, with the knowledge that they have a cost-effective solution to support their global payroll & HR requirements as they continue their global expansion.

    HR Mandates and Practices

    Minimum Wage

    There is no minimum wage in Bahrain.


    The employer may employ the employee for additional hours beyond the regular hours if required. Overtime hours should not exceed 2 hours per day.

    Pay – The employee shall receive for each additional working hour a wage equivalent to his due wage plus at least 25% for hours worked during the day and at least 50% for hours worked during the night.

    Data Retention Policy

    Tax records must generally be kept for a minimum of five years. Social security records should be kept for five years. All records regarding compensation and benefits must be kept for a minimum of five years.

    Hiring and Onboarding Requirements


    Employers are not prohibited from carrying out background checks, and these can be done at any stage in the hiring process.


    Foreign nationals are required to have a work permit sponsored by an employer in Bahrain. The application for the work permit must be submitted to the Labour Market Regulatory Authority ('LMRA') using the online Expat Management System ('EMS'). The following documents must be submitted with the application:

    Required documents

    • Copy of the applicant's passport
    • Copy of the latest paid electricity bill of the employer
    • Applicant's ID card
    • Copy of the offer letter or work contract between the employer and the applicant employee pages.
    • Copy of medical check-up report
    • Copy of the residence permit if the applicant works in any of the Gulf Cooperation Council countries.

    Once the LMRA approves the application, the employer must pay the work permit fees through the EMS system. The permit must then be printed from the EMS system and taken to the Immigration Office to be stamped into the individual's passport.

    After arriving in Bahrain, the employee will need a further medical check and have their photograph and fingerprints taken to be issued the Central Population Registry ('CPR') identity card


    Bahrain labor law allows employers to have a probationary period, which is expressly stated in the employment contract. Probation can be used only once during the period of employment. The probationary period can last up to three months and, in certain professions, up to six months


    Paid Leave

    Paid leave is granted to workers who have completed at least six months of service with the same employer for over 12 months. Its length depends on the worker's seniority. It is 14 calendar days when the worker has less than five years of service, 21 calendar days from 5 to 10 years of service, 28 calendar days from 10 to 20 years of service, and 35 calendar days when the worker's length of service is 20 years or more.

    Public Holidays

    01 January: New Year

    01 May: May Day

    02 May: Eid al-Fitr

    03 May: Eid al-Fitr Holiday

    04 May: Eid al-Fitr Holiday

    08 July: Arafat Day

    09 July: Eid al-Adha

    10 July: Eid al-Adha Holiday

    11 July: Eid al-Adha Holiday

    12 July: Eid al-Adha Holiday

    30 July: Muharram

    31 July: Muharram Holiday

    08 Aug: Ashoora

    09 Aug: Ashoora Holiday

    08 Oct: The Prophet's Birthday (Tentative Date)

    16 Dec: National Day

    17 Dec: National Day (Second day)

    Sick Leave

    An employee completing three consecutive months in the employer's service, whose sickness and entitlement to sick leave by providing a certificate issued by any of the Government Medical Centers or any of the clinics retained by the employer, shall be entitled to the following sick leaves during the same year:

    • Fifteen days on full pay
    • Twenty days on half-pay
    • Twenty days without payment

    Maternity Leave

    Employees expecting a child are entitled to 75 days of maternity leave. The first 60 days are paid in full, with the last 15 days remaining unpaid.

    Paternity Leave

    Fathers are entitled to one day of paid leave when a child is born.

    Other Leave

    Child Care Leave: Female employees are entitled to unpaid leave for taking care of her child not exceeding six years of age, of a maximum of six months each time, and for three times throughout her service.


    Notice Period

    The minimum notice period is 30 days. The minimum notice period may be increased contractually when the employer terminates the employment relationship. The law is silent about whether the notice period can be increased if the employee terminates the employment relationship.

    Severance Pay

    Employees shall receive the following:

    • First three years: 15 days' salary for each year
    • From the fourth year: 30 days' salary for each year



    Foreign employees will all need work visas if they take up any employment. This permit is valid for one to two years and entitles your workers to residency. You will arrange most of the paperwork.

    Requirements for Visa

    An employer or Bahraini national needs to sponsor anyone seeking a Bahrain working visa. The number of visas a company can sponsor depends on two factors: The physical size of the office and the limit set forth by national regulations. The employer handles the process on behalf of the employee and must show a letter of employment, commercial registration number, the employee's capacity, the contract duration, and more.

    Other requirements include the following:

    • A completed visa application form
    • The employee's passport
    • A passport-size photo
    • Copy of the contract with the employee's name, birth date, and nationality
    • Health record from an authorized clinic
    • Proof of payment of BHD 100 fee

    Employee Background Checks

    Legal and Background Checks

    Employers are not prohibited from carrying out background checks, and these can be done at any stage in the hiring process. Nevertheless, it is recommended that checks should only be carried out where they are proportionate and necessary and following an offer of employment. Applicants should be notified beforehand that their application will be conditional on background checks being carried out.

    Expatriate job candidates must also complete satisfactory medical and police clearance checks.

    Checks on social media are not regulated, and employers are free to use them to perform background checks on an applicant. However, it is recommended that these checks are confined to professional sites (e.g., LinkedIn) and carried out after the interview process to avoid any suggestion that candidates were selected or not selected because of their characteristics.

    Last updated on December 31, 2022

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