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The trial phase is three months long, while fixed-term contracts are limited to 6 months.
The notice period must not be shorter than 30 days, according to Bahraini labour law. Employers, on the other hand, are required to follow a lengthier notice period if it is specified in the employee’s contract.
Bahraini nationals with a high school diploma are entitled to a monthly minimum salary of BHD270. Bahraini citizens with diploma degrees are entitled to a monthly minimum pay of BHD350, whereas Bahraini nationals with university degrees are entitled to a monthly minimum income of BHD400.
The maximum number of regular working hours per week is 48 hours per week at an 8-hour-per-day rate. During the month of Ramadan, the maximum weekly working hours are 36 hours at a pace of 6 hours each day.
If the conditions of the job necessitate it, the employer may hire the worker for more hours. For such labor, the worker will earn 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 for each extra working hour. As a result, workers get paid 125 percent of their usual income for overtime during the day and 150 percent of their normal wage during the night.
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An employer can terminate an employee’s employment contract with or without cause, as long as he gives the employee at least one month’s notice. When an employee is terminated without cause, compensation is payable; the amount depends on the circumstances, such as whether the employment is for a fixed term or an indefinite period. The numerous computations for this compensation are spelled forth in Article 111 of the Labour Law.
Collective bargaining is recognized under the Bahraini Labour Law under Article 137; nonetheless, agreeing on the terms and conditions of employment through collective bargaining is not a typical practice in the Kingdom of Bahrain.
The Ministry of Justice, Islamic Affairs, and Waqf is tasked with establishing the foundations of the judicial system in the Kingdom of Bahrain, in collaboration with the Supreme Judicial Council and other parties involved in the justice system and law enforcement. Its responsibilities encompass all administrative elements of judicial activities.
After one year of work, employees are normally entitled to 30 days of paid annual leave. During the first year of work, the employee is eligible to take accumulated vacation, which accrues at the rate of 2 1/2 days per month for all employees. Six days of leave must be taken consecutively. Employers generally pay for expatriate workers’ flight travel home on their holiday.
Employees are generally entitled to 55 days of sick leave each year:
Maternity leave is often granted to women for 75 days:
Fathers are only entitled to one day of paid leave after the birth of their kid.
Female employees are entitled to unpaid childcare leave over the course of their job to care for their children under the age of six. By virtue of Article 34 of the Labour Law, such leave shall not exceed six months in duration and shall be restricted to three times over the course of their employment.
There are in total 9 paid public holidays.
Employees are also entitled to three days of paid leave for marriage provided a copy of the marriage certificate is shown. Muslim workers who have worked for the business for at least 5 years are entitled for 14 days of paid leave for a trip to Mecca once during their employment.
In 2007, the Bahraini government established a nationwide Unemployment Insurance Scheme (UIS). The UIS is a required contribution program that covers all Bahrainis and foreign nationals working in the official and informal sectors of Bahrain. Contributions of 3% of employee salaries are split equally between the employee, the employer, and the government to fund the system. The Compensation Payment is offered to jobless people and consists of a monthly benefit computed at 60% of the insured wage, up to a minimum of BHD 150 and a maximum of BHD 500, or USD 1,326, payable for up to 6 months.
Disability / Work Injury Benefit
During the course of his therapy, a wounded worker gets paid his regular salary. If the duration of treatment exceeds six months, the employer pays half of the worker’s salary until he recovers or his inability to work is confirmed. A worker who is injured on the job has the right to be compensated for his or her injuries in accordance with the schedule to be set by an order of the Minister. However, no compensation or medical care is provided if the injury is self-inflicted; the injury occurs as a result of the worker’s gross and deliberate misbehaviour, which includes any act performed by an injured worker while under the influence of intoxicating materials or narcotic drugs; or the worker violates the employer’s instructions concerning occupational safety and health. If a worker dies as a consequence of an occupational accident, compensation will be distributed in line with Sharia inheritance regulations.
In most cases, the pensionable age cannot be set higher than 65 years of age. If the retirement age is raised to over 65, it must take into account “the working capabilities of senior people” as well as “demographic, economic, and social conditions, which must be scientifically shown.” Pensions can be calculated as a percentage of either the minimum wage or the earned pay. When the breadwinner dies, the spouse and children are entitled to a payment calculated as a proportion of the minimum wage or the earned wage. This must be at least 40% of the reference wage. For a short time, the jobless are entitled to unemployment benefits calculated as a percentage of the minimum wage or a percentage of their earned pay. Invalidity benefits are paid when a protected person is unable to work for a living before reaching the regular retirement age owing to a nonoccupational chronic condition that causes sickness, injury, or disability. The Invalidity Benefit must be at least 40% of the reference pay.
Employed Bahraini citizens who work in establishments with at least one employee or in one of the Gulf Cooperation Council nations (Kuwait, Oman, Qatar, Saudi Arabia, or the United Arab Emirates) are covered by the Act. Voluntary coverage is also available for those with at least five years of previous obligatory social security coverage, self-employed individuals, and other Bahraini citizens working abroad. However, the legislation excludes home workers, some types of agricultural laborers, casual workers, temporary noncitizen workers, and other groups defined by law. The Act provides for a range of sources of funding for pensions. The insured individual contributes 6% of total monthly earnings, whereas the voluntarily insured contribute 15% of disclosed monthly income. The employer contributes 9% of the employee’s monthly salary. The maximum monthly earnings for contribution purposes are 4,000 dinars.
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There is private workers compensation available in Bahrain.
There are private retirement schemes available in Bahrain.
Private healthcare is available in Bahrain.
Private life insurance is available in Bahrain.
The tax year in Bahrain is a calendar year from 1st January to the 31st December.
Bahrain has no personal income tax (PIT) regime. Individuals employed by a natural person, a legal company, or a business in the Kingdom of Bahrain, on the other hand, are subject to Social Insurance Organization (SIO) laws in Bahrain.
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Bahrain has multiple double tax agreements (DTA) with other countries.
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Employees who are paid on a salary are paid at least once a month.
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In 2007, the Bahraini government established a nationwide Unemployment Insurance Scheme (UIS). The UIS is a required contribution program that covers all Bahrainis and foreign nationals working in the official and informal sectors of Bahrain. Contributions of 3% of employee salaries are split equally between the employee, the employer, and the government to fund the system. The Compensation Payment is offered to jobless people and consists of a monthly benefit computed at 60% of the insured wage, up to a minimum of BHD 150 and a maximum of BHD 500, or USD 1,326, payable for up to 6 months.
In most cases, the pensionable age cannot be set higher than 65 years of age. If the retirement age is raised over 65, it must take into account “the working capabilities of senior people” as well as “demographic, economic, and social conditions, which must be scientifically shown.” Pensions can be calculated as a percentage of either the minimum wage or the earned pay. When the breadwinner dies, the spouse and children are entitled to a payment calculated as a proportion of the minimum wage or the earned wage. This must be at least 40% of the reference wage. For a short time, the jobless are entitled to unemployment benefits calculated as a percentage of the minimum wage or a percentage of their earned pay. Invalidity benefits are paid when a protected person is unable to work for a living before reaching the regular retirement age owing to a nonoccupational chronic condition that causes sickness, injury, or disability. The Invalidity Benefit must be at least 40% of the reference pay.
Salaries, wages, and allowances received by working persons are not subject to income tax.
13-month payments are not required by law. Employers have the option to give out incentives at their discretion.
Benefits in kind are simple payments in kind and company subsidies offered for workers’ personal or social needs. Also, depending on its purpose, money provided to employees may be considered a kind benefit and may be excluded from tax and premium contributions.
Capital gains and income of citizens and non-residents who are not paid in Bahrain are not subject to Bahraini taxation or social insurance requirements.
Employed Bahraini citizens who work in establishments with at least one employee or in one of the Gulf Cooperation Council nations (Kuwait, Oman, Qatar, Saudi Arabia, or the United Arab Emirates) are covered by the Act. Voluntary coverage is also available for those with at least five years of previous obligatory social security coverage, self-employed individuals, and other Bahraini citizens working abroad. However, the legislation excludes home workers, some types of agricultural laborers, casual workers, temporary noncitizen workers, and other groups defined by law. The Act provides for a range of sources of funding for pensions. The insured individual contributes 6% of total monthly earnings, whereas the voluntarily insured contribute 15% of disclosed monthly income. The employer contributes 9% of the employee’s monthly salary. The maximum monthly earnings for contribution purposes are 4,000 dinars.
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Salaries, wages, and allowances received by working persons are not subject to income tax.
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In 2007, the Bahraini government established a nationwide Unemployment Insurance Scheme (UIS). The UIS is a required contribution program that covers all Bahrainis and foreign nationals working in the official and informal sectors of Bahrain. Contributions of 3% of employee salaries are split equally between the employee, the employer, and the government to fund the system. The Compensation Payment is offered to jobless people and consists of a monthly benefit computed at 60% of the insured wage, up to a minimum of BHD 150 and a maximum of BHD 500, or USD 1,326, payable for up to 6 months.
In most cases, the pensionable age cannot be set higher than 65 years of age. If the retirement age is raised to over 65, it must take into account “the working capabilities of senior people” as well as “demographic, economic, and social conditions, which must be scientifically shown.” Pensions can be calculated as a percentage of either the minimum wage or the earned pay. When the breadwinner dies, the spouse and children are entitled to a payment calculated as a proportion of the minimum wage or the earned wage. This must be at least 40% of the reference wage. For a short time, the jobless are entitled to unemployment benefits calculated as a percentage of the minimum wage or a percentage of their earned pay. Invalidity benefits are paid when a protected person is unable to work for a living before reaching the regular retirement age owing to a nonoccupational chronic condition that causes sickness, injury, or disability. The Invalidity Benefit must be at least 40% of the reference pay.
Disability / Work Injury Benefit
During the course of his therapy, a wounded worker gets paid his regular salary. If the duration of treatment exceeds six months, the employer pays half of the worker’s salary until he recovers or his inability to work is confirmed. A worker who is injured on the job has the right to be compensated for his or her injuries in accordance with the schedule to be set by an order of the Minister. However, no compensation or medical care is provided if the injury is self-inflicted; the injury occurs as a result of the worker’s gross and deliberate misbehaviour, which includes any act performed by an injured worker while under the influence of intoxicating materials or narcotic drugs; or the worker violates the employer’s instructions concerning occupational safety and health. If a worker dies as a consequence of an occupational accident, compensation will be distributed in line with Sharia inheritance regulations.
Salaries, wages, and allowances received by working persons are not subject to income tax.
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In 2007, the Bahraini government established a nationwide Unemployment Insurance Scheme (UIS). The UIS is a required contribution program that covers all Bahrainis and foreign nationals working in the official and informal sectors of Bahrain. Contributions of 3% of employee salaries are split equally between the employee, the employer, and the government to fund the system. The Compensation Payment is offered to jobless people and consists of a monthly benefit computed at 60% of the insured wage, up to a minimum of BHD 150 and a maximum of BHD 500, or USD 1,326, payable for up to 6 months.
In most cases, the pensionable age cannot be set higher than 65 years of age. If the retirement age is raised to over 65, it must take into account “the working capabilities of senior people” as well as “demographic, economic, and social conditions, which must be scientifically shown.” Pensions can be calculated as a percentage of either the minimum wage or the earned pay. When the breadwinner dies, the spouse and children are entitled to a payment calculated as a proportion of the minimum wage or the earned wage. This must be at least 40% of the reference wage. For a short time, the jobless are entitled to unemployment benefits calculated as a percentage of the minimum wage or a percentage of their earned pay. Invalidity benefits are paid when a protected person is unable to work for a living before reaching the regular retirement age owing to a nonoccupational chronic condition that causes sickness, injury, or disability. The Invalidity Benefit must be at least 40% of the reference pay.
Disability / Work Injury Benefit
During the course of his therapy, a wounded worker gets paid his regular salary. If the duration of treatment exceeds six months, the employer pays half of the worker’s salary until he recovers or his inability to work is confirmed. A worker who is injured on the job has the right to be compensated for his or her injuries in accordance with the schedule to be set by an order of the Minister. However, no compensation or medical care is provided if the injury is self-inflicted; the injury occurs as a result of the worker’s gross and deliberate misbehaviour, which includes any act performed by an injured worker while under the influence of intoxicating materials or narcotic drugs; or the worker violates the employer’s instructions concerning occupational safety and health. If a worker dies as a consequence of an occupational accident, compensation will be distributed in line with Sharia inheritance regulations.
Statutory benefits in Bahrain include time off for the nine national holidays, as well as a minimum of 30 working days of paid annual vacation While the regular workweek is from Sunday to Thursday, anyone who works on weekends or holidays should be paid an additional 25%. Healthcare is another unavoidable advantage. Bahrain has a public/private healthcare system in place, with residents receiving either free or significantly subsidized treatment. Foreign nationals can use the same schemes, but they must pay for their own care and often obtain their own health insurance.
Bahrain provides extensive welfare to its citizens without levying any taxes. Medical care, sickness and maternity benefits, child care, pensions, and unemployment benefits are all included. Foreign workers are not permitted.
Bahrain National Bureau for Revenue.
This information is provided solely for informational purposes and should not be used as a substitute for professional advice in any jurisdiction. You should hire your own legal, tax, and accounting professionals as part of your worldwide payroll needs.
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