Bahrain's Labour Law (No. 36 of 2012) gives private sector workers a leaving indemnity at the end of service. Since March 2024, how it is paid has changed for expatriate workers.
The formula
Article 116 gives half a month's wage for each of the first three years and one month's wage for each year after, with part years in proportion.
Example: wage BHD 600 and 6 years of service. First three years: 3 × BHD 300 = BHD 900. Next three years: 3 × BHD 600 = BHD 1,800. Total BHD 2,700.
Resignation
The 2012 law removed the old reductions on resignation: a worker who resigns gets the full indemnity. It is lost only for dismissal for gross misconduct under Article 107.
The SIO system since March 2024
From 1 March 2024, employers pay monthly end of service contributions for non-Bahraini workers to the Social Insurance Organisation: 4.2% of annual wage for each of the first three years and 8.4% after. When you leave, you claim the part earned from that date from the SIO. Your employer still pays the part earned before 1 March 2024.
Leave and notice
Annual leave is 30 days a year (2.5 days a month), and notice is at least 30 days. The Bahrain final settlement calculator adds unused leave, unpaid salary and notice pay.
For the indemnity alone, with the employer and SIO parts, use the Bahrain gratuity calculator.
Sources
- Bahrain Labour Law for the Private Sector, Law No. 36 of 2012
- Resolution No. 109 of 2023 on end of service payments through the SIO
- Social Insurance Organisation (SIO)
- Labour Market Regulatory Authority (LMRA)
Want the exact figure for your case?
Open the Bahrain gratuity calculator