United Arab Emirates

Hiring in Bahrain

To ensure legal compliance, a well-constructed employment contract is necessary and should clearly outline the terms of the employee's pay, benefits, and severance requirements. This document must be in the local language in Bahrain and provided in duplicate copies, one for the employer and the other for the employee. In addition, all remuneration amounts must be in Bahraini dinar. Our PEO solution provides locally compliant contracts for all employees hired in Bahrain, who are included as part of our comprehensive services.

Employment Contracts in Bahrain

To ensure compliance with local labor laws in Bahrain, the workday typically consists of 40 to 48 hours, with an average of 8 hours per day, while the workweek runs from Sunday through Thursday. During Ramadan, the workday is reduced to 6 hours for Muslim employees. The weekend days are Friday and Saturday. Additionally, employers must compensate their employees with 25% more for overtime work.

Holidays in Bahrain

In the region, there are nine holidays.

Vacation Days in Bahrain

After a year of employment, employees are typically eligible for 30 days of yearly paid leave. The employee has the right to use earned vacation time in the initial year of employment; which for all workers accrues at a rate of 2 1/2 days each month. As a result, the leave is valid for six consecutive days. Normally, employers cover the cost of an employee’s return flight home while they are on leave.

If they provide a duplicate of the marriage certificate, workers have the right to three days of leave for marriage-related reasons.

Muslim workers who have been working for the business for at least five years are eligible for a single 14-day leave for a pilgrimage to Mecca with pay.

Health Insurance in Bahrain

In Bahrain, the healthcare system is a combination of public and private entities. Citizens of Bahrain are entitled to free or substantially reduced medical treatment. On the other hand, foreign nationals have access to the same facilities and doctors but must pay for the services. Thus, it is crucial to obtain health insurance coverage. Companies do not provide extra health insurance coverage; however, employers and employees can discuss such benefits as part of their agreement.

Termination in Bahrain

In Bahrain, employees with indefinite contracts who are terminated after 3 months are generally entitled to two days of compensation per month worked. This equates to a minimum of one month's salary and a maximum of 12 months' pay, regardless of the reason for the termination.

For employees with fixed-term contracts, the compensation is the salary they would have earned for the remaining period of the contract. However, if both parties agree, a new arrangement can be made, which must be for a minimum of three months' pay or the remaining term, whichever is less.

Employees not subject to the Law on Social Insurance are typically eligible for an indemnity or gratuity at the end of their employment. This amount should be set at half a month's pay for the first three years of employment and one month's pay for each subsequent year. Our team at Lionconsulting can provide guidance on local labor laws and regulations to ensure compliance with these requirements.

Taxes in Bahrain

Bahrain is a tax-friendly country, as there are no personal income taxes to pay. However, workers are required to pay a social tax of 1% on their earnings, which goes towards providing unemployment insurance. For Bahraini employees, there is also a mandatory contribution of 7% of their earnings towards social security, while employers are required to pay 12%. For foreign workers, the contribution is 1% for the employee and 3% for the employer.