How to hire and pay employees in Bahrain
With Instahirin, your business can easily hire employees in Bahrain. No more worrying about local laws, complex tax systems, or managing international payroll.
Before hiring
EMPLOYEES IN The Bahrain
Before hiring employees in Bahrain, one key thing employers should be aware of is the country’s Personal Data Protection Law (PDPL). This law regulates how personal data including employee information is collected, processed, stored, and transferred. Employers must obtain consent and take appropriate security measures, especially when transferring data internationally.
Another critical consideration is Bahrain’s Labour Law (Law No. 36 of 2012) and the country’s mandatory employment benefits. Employers must provide a written employment contract, contribute to the Social Insurance Organization (SIO) for pensions and unemployment insurance, and offer benefits such as paid annual leave (30 days), sick leave, maternity leave, and observe public holidays. For expatriate employees, employers must also handle work visas, medical insurance, and sponsorship obligations. Employment laws apply to both Bahraini and foreign workers and must be strictly followed to avoid penalties.
At a glance
CURRENCY
Bahraini Dinar
OFFICIAL LANGUAGE
Arabic
PAYROLL FREQUENCY
Monthly
EMPLOYER TAXES
17%
of gross salary
13th / 14th SALARY
N/A
Good to know
Bahrain provides basic public healthcare through government facilities, but most private sector employers are required to offer private health insurance for expatriate employees under the SEHATI health program. Bahraini nationals are covered under public healthcare, which is heavily subsidized or free.
The standard workweek is 48 hours, typically 8 hours per day over 6 days. During Ramadan, Muslim employees work 2 hours less daily. Overtime must be paid at 125% to 150% of the regular rate, depending on timing. Employees are entitled to 30 calendar days of paid annual leave, plus public holidays, including religious and national observances.
Labor laws in Bahrain
Working hours and overtime
Standard working hours are 45 hours per week, 9 hours per day, inclusive of a 1-hour lunch break. The standard work week is from Saturday to Thursday. Working hours shall not exceed 48 hours per week.
Overtime payment is mandatory for non-managerial positions. Hours outside of standard work hours are considered overtime. For additional hours, employees are paid:
- 125% of the hourly rate
- 150% of the hourly rate for public holidays
Employment contracts
Contracts must be in English and can be bilingual. They must be in writing and signed by both parties.
A contract must include:
- Name
- Start date
- Length of the employment
- Job description
- Termination conditions
Probationary period
In Bahrain, the standard probation period is 90 days, with a maximum of 180 days. Probation periods help an employer and the employee ensure they're a hiring match, allowing a company to quickly decide if it's a fit or the employee to see if the job aligns with their career goals.
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Benefits and leave in Bahrain
Annual leave in Bahrain
In Bahrain, employees are entitled to 30 calendar days of paid annual leave after completing one year of continuous service. During the first year, leave accrues at a rate of 2.5 days per month.
Employees must take at least 15 days of annual leave each year, with a minimum of 6 consecutive days . Unused leave can be carried forward for up to two years with employer approval. Upon termination, any unused leave must be compensated in cash.
Annual leave is paid at the employee's basic wage plus any applicable housing allowance. Additionally, employees are entitled to 6 days of emergency leave per year, deducted from their annual leave balance.
Sick leave
Employees are entitled to paid sick leave for up to 55 days, which can be taken upon the presentation of a medical certificate once they have completed 3 months of service. The pay rate for this leave varies depending on its duration.
- 0 - 15 days - 100% of salary - Paid by employer
- 16 - 35 days - 50% of salary - Paid by employer
- 36 - 55 days - No pay
Parental leave
In Bahrain, no law covers parental leave.
Holidays
Bahrain has around 14 public holidays each year, including Islamic festivals like Eid al-Fitr, Eid al-Adha, and Ashura, as well as National Day on December 16–17. Islamic holiday dates vary yearly based on the lunar calendar.
Employer tax
In Bahrain, employers contribute 17% of a Bahraini employee’s salary to social insurance (set to rise to 20% by 2028), covering pensions and healthcare. For expatriates, the contribution is 3%, mainly for workplace injury coverage.
Individual tax
Bahrain has no personal income tax, but employees and employers must contribute to social insurance—17% employer and 8% employee for nationals, and lower rates for expatriates. These contributions are capped at a monthly salary of BHD 4,000.
Termination in The Bahrain
Terminations in Bahrain can be complex. There is no at-will termination in Bahrain for employers outside the probation period and termination must be done for just cause. Compliant terminations include:
- Voluntarily by the employee
- By mutual agreement
- By expiration of the contract
Notice period
The minimum notice period is 1 month after the completion of the probation period. During the probation period, the notice period is 1 day.
Start hiring employees in
Bahrain
Setting up a business entity in every country where you want to hire isn’t scalable it’s time-consuming, costly, and legally complex. In Bahrain, navigating labor laws, social insurance contributions, work permits, and tax regulations can be challenging. Managing contracts, payroll, and compliance manually through spreadsheets and emails increases the risk of errors and inefficiencies.
With InstaHirin, you can easily manage HR, payroll, and automate compliance in Bahrain and 180+ countries all from one user-friendly platform so you can hire quickly and confidently without setting up a local entity.
Disclaimer: The information provided in this resource is for general educational purposes only and shall not be construed as legal advice. While InstaHirin yster strives to provide current and accurate information, InstaHirin makes no warranties or representations as to the correctness of the content provided and accepts no liability or responsibility for any errors or omissions in the content provided. By using this resource you acknowledge and agree that you do so at your own risk. The content of this resource is subject to change without notice.
