Payroll and HR in Bahrain
The International HR & Payroll Company
That Speaks Your Language
IRIS FMP will simplify Bahrain payroll and HR. As a recognized, trusted global payroll and HR specialist, we have 88 in-country teams on-hand to help ensure your international employees are taken care of.
Navigating the intricacies of global payroll and HR in Bahrain is not always easy without the right help. As compliance is always a top priority for businesses, we can support you during a global expansion with any HR or payroll inquires. This includes differing laws, cultures and regulations, it can feel overwhelming to stay on top of it all. Fortunately, our expert teams are here to help. We offer:
Looking for a Payroll and HR Solution?
We take away the complications of global payroll and manage everything for you – this includes local pay to benefits, and more. Through our payroll support, your growing workforce will be paid accurately, on-time, every time.
Bahraini Employment Law Compliance
We will help you onboard your organization’s people, putting compliance and ease at the forefront. As a leading in-country specialist, we can help with contracts, policies, handbooks and more.
Jump to section
- Asia (Western Asia)
- Calling Code
- Bahraini dinar (BHD)
$1 = .د.ب0.38
- Main Language
- Other Business Languages
- English, Arabic
- Tax Year Start
- 1st January
- Tax Year Start
- 31st December
Details correct at time of publication. You should not rely on these details without first seeking professional international advice.
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Global Expansion in Bahrain
The Bahraini Dinar is the second highest valued currency worldwide, after the Kuwait Dinar. This is because of Bahrain’s prosperity in the oil industry; refined petroleum remains its chief export. After oil, its aluminium products make up a significant proportion of exports too. The affluence of the Kingdom of Bahrain is one of the principle reasons why many businesses choose to expand there; that and the fact that both businesses and individuals are exempt from tax – apart from in the oil and gas sector. The country’s government have taken steps in welcoming foreign businesses over recent years, making Bahrain more attractive.
Bahrain Island Airport (BAH) offers direct flights to 63 destinations in 31 countries across Europe, the Middle East, and Asia. There are also several non-stop flights to African capitals. From a business perspective, this makes it easy to get from Bahrain to business hub cities such as London, Manila, Paris and Moscow. Bahrain itself offers public transport in the form of buses and taxies, from capital Manama to major cities such as Riffa and Muharraq.
It is imperative that any business owners considering expanding to this part of the world are familiar with local law concerning all aspects of HR and payroll. Navigating this legislation in Bahrain can be no mean feat, but fortunately the team at IRIS FMP are well-equipped to offer advice and support.
In Bahrain, the following is due for submission:
- Certified, audited financial statements
- Employee sponsorship forms for expats
Payroll in Bahrain
What tax considerations are there?
Corporate Income Tax (CIT)
Apart from businesses dealing in the fuel and gas sector, which are taxed at a rate of 46%, all companies operating in Bahrain are exempt from tax.
All companies are required to keep accurate financial records, and submit an estimated income tax statement by the 15th of the third month of the taxable year. Tax returns must be certified by an approved accountant.
Businesses that are required to pay tax can do so across the year in 12 monthly instalments. These are due from the 15th of the fourth month of the taxable year, using the calculations of the estimated income tax statement. Any overpayment will be credited and used against future tax.
Personal Income Tax
In Bahrain, individual income derived from salaries/wages is not taxed.
Individuals are asked to pay Social Security contributions, however. For residents this is at a rate of 19% (7% from the employee and 12% from the employer), and 4% for non-resident employees (1% from employee and 3% from employer). The contributions should be withheld by employers at the time of salary/wage payment.
HR in Bahrain
What are the regular working hours in Bahrain?
Office hours in Bahrain are usually between 8.30am and 6pm, and the average working week is between 40 and 48 hours. Most people work a five day week, and because Bahrain is a predominantly Muslim country (70% of inhabitants) – the official day of rest is Friday. The additional day will usually be Thursday or Saturday – the former of which applies for schools. Many companies choose Saturday as the additional rest day, however, so as to avoid any loss of international business communication.
During Ramadan, the working day is reduced to six hours. This should legally apply to all employees, however a number of companies only extend this to Muslim employees.
Vacation, maternity and sickness
There are nine public holidays in Bahrain, during which employees are not expected to work. As well as this, employees are entitled to 30 days of annual leave. In the first year this is accrued at a rate of 2½ days each month. At least six days of the leave must be taken consecutively, and in the case of expat employees, employers conventionally pay for their airfare to travel home.
Additional paid leave includes three days in the event of marriage, as long as they present a marriage certificate. Muslim employees who have given at least five years service can also take 14 days of paid leave to pilgrimage to Mecca.
Female employees in Bahrain are entitled to 75 days of maternity leave. 60 days of this is paid and 15 unpaid. The law states that women are not allowed to work during the 40 days following the birth of a child. In order to qualify for maternity leave before the birth, a pregnant employee must provide a medical certificate detailing her due date. In addition to maternity leave, women are entitled to two periods of an hour each during the working day, to breastfeed her child until the child is six months old, and two periods of 30 minutes per day after this until the child is one year old.
As long as they provide a certificate from a medical professional, employees are entitled to up to 55 days of sick leave annually. 15 days are fully paid, 20 days at half pay, and 20 days with no pay.
Employees in Bahrain must provide at least 30 days notice before terminating their contract. Apart from in cases where an employee has broken the law, they are entitled to three written warnings before being dismissed, and at least 30 days of notice. With regards to severance pay, employees on an indefinite contract are entitled to two days of wages for every month they have worked – with a minimum of one and maximum of twelve months worth of salary.
Get to Know Global HR & Payroll Law
Find out about employment law across the world with our downloadable guide. We cover everything from international personal and corporate income tax, to maternity leave and pensions.
IRIS FMP’s Bahraini Payroll and HR Solutions
Before expanding to Manama, Riffa, Muharraq, or another of Bahrain’s big cities, business owners need to familiarise themselves with the country’s employment law. HR and payroll considerations in this part of the world can be complex and require a lot of care and attention. This is where IRIS FMP come in. We have experience in navigating the world of international employment law, and can guide you through the process to ensure you remain compliant. Our services include:
- Payroll processing
- Multi-currency payroll
- Translation services
- Emailed payslips
- Tax deductions
- Pension payments
- Sick leave and maternity pay
- Annual leave management
- Sick leave management
- HR auditing and consultancy
- Local law consultation
- Employment contracts
- Payroll auditing
- End-of-year tax reconciliation
Stay Compliant with Bahrain Employment Law with IRIS FMP
With the help of our experts, you can be confident that you fully comply with the HR and payroll law in Bahrain. Get in touch to let us help you achieve seamless business expansion.