Bahrain at a glance
Taxes in Bahrain
Bahrain has no personal income tax on employment income — employees retain their full gross salary, net of social insurance contributions only.
| Contribution | Bahraini Nationals | Expatriates |
|---|---|---|
| Social Insurance (SIO) | 12% | 3% |
Employer contributions are remitted to the Social Insurance Organization (SIO).
| Contribution | Bahraini Nationals | Expatriates |
|---|---|---|
| Social Insurance (SIO) | 7% | 1% |
| Income Tax | 0% | 0% |
Employer of Record in Bahrain
What Is an Employer of Record?
An Employer of Record is the legal employer of your worker under Bahraini law. Remote& handles employment contracts, LMRA work permit sponsorship, SIO registration, payroll, and statutory benefits — so you can hire in Bahrain compliantly without setting up a local company.
How Remote& EOR Works
| Party | Role |
|---|---|
| Your Company | Recruits the worker, assigns tasks, manages performance |
| Remote& | Signs the employment contract, sponsors the work visa, processes payroll, remits SIO contributions, manages statutory entitlements |
| Employee | Fulfills their role for your company under a Bahraini-compliant employment contract |
Ask Remi:
"Hire a Finance Analyst in Manama — 2,500 BHD/month, starting next month" Remi handles contract drafting, LMRA work permit coordination, SIO registration, payroll setup, and benefits enrollment — all in one conversation.
Benefits in Bahrain
Social Insurance The Social Insurance Organization (SIO) provides pension, disability, and occupational injury coverage. Bahraini nationals receive comprehensive coverage; expatriate employees receive more limited coverage focused on work-related injuries.
End-of-Service Indemnity Expatriate employees are entitled to end-of-service indemnity upon completion of one year of service. The calculation is based on final salary and length of service: typically half a month's salary per year for the first 3 years and one month's salary per year thereafter.
- Private health insurance (common but not universally mandated)
- Transportation allowance
- Housing allowance
- Annual flight ticket to home country
- Mobile phone allowance
- Education support for dependents
Leave entitlements
| Leave type | Entitlement |
|---|---|
| Annual Leave | 30 calendar days per year |
| Sick Leave | Up to 55 days per year (15 days full pay, 20 days half pay, 20 days unpaid) |
| Maternity Leave | 60 days |
| Paternity Leave | 1 day |
| Hajj Leave | 15 days unpaid (once during employment relationship, for Muslim employees) |
Employment conditions
Working Hours
Standard hours are 48 per week (8 hours per day). During Ramadan, hours are reduced to 6 hours per day for Muslim employees. Overtime must be compensated at a minimum of 125% of the regular hourly rate (150% for night-time or holiday overtime).
Probation
Probation periods may not exceed 3 months. Either party may terminate during probation without compensation.
Payments
End of employment in Bahrain
Employment contracts may be terminated by mutual consent, expiry of a fixed-term contract, resignation, or employer-initiated termination for cause. Termination without valid reason requires payment of compensation in lieu of notice and end-of-service indemnity.
Notice periods are typically 1 month for indefinite-term contracts, unless a longer period is specified in the contract. Gross misconduct may justify immediate termination without notice. Final settlement must include all outstanding wages, accrued leave, and end-of-service indemnity.
Frequently asked questions
The main paths are: employing through your home-country entity (not viable due to LMRA and visa requirements), engaging independent contractors (appropriate for genuine project-based work only), registering a local Bahraini entity, or using Remote& as your Employer of Record. For most international companies, the EOR approach is the fastest and most compliant route.