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Compensation & Benefits in BhBahrain.






Country Capital



Bahraini dinar (BHD)

Most employees will typically prioritize 2 aspects of employment — compensation and benefits. When expanding to a new country such as Bahrain, you need to make sure you’re providing the right compensation and benefits that both meet the nation’s laws and satisfy local employees.

Bahrain compensation laws

Bahrain’s compensation laws do not dictate a minimum wage, but the median salary is BDH 1,534 per month. However, 25% of the population earns less than BDH 781 per month, while 75% makes more than BHD 781 each month. Keep in mind that the country does not have a personal income tax, meaning net salaries offered to employees will typically look higher than in other countries.

Contract workers are also entitled to an indemnity at the end of their contract period. This amount is usually based on basic salary without any bonuses and serves as a “thank you” to international workers serving Bahrain. It typically equals between 15 and 20 days of pay for an employee’s first 3 years of work, then a month’s salary for each year of work after that.

Guaranteed benefits in Bahrain

A solid Bahrain benefits management plan must include statutory benefits guaranteed to all employees, including time off for the holidays celebrated in the country, as well as a minimum of 30 working days of paid annual leave. While the typical workweek is Sunday to Thursday, overtime should be paid at an additional 25% for anyone who works on weekend days and holidays.

Another guaranteed benefit is healthcare. Bahrain operates under a public/private healthcare system where citizens receive either free or heavily subsidized care. Nationals from other countries can access the same plans but will have to pay for care and typically purchase their own health insurance.

Bahrain benefits management

In addition to the guaranteed benefits in Bahrain, companies will also need to give out additional benefits to increase talent retention rates and keep employees happy. You can customize the fringe benefits you offer to be of most value to local employees. Some popular supplemental offerings in Bahrain include:

  • Housing allowances
  • Transportation allowance
  • Utility allowances
  • Fitness memberships and classes
  • Emotional health support and services
  • Employee assistance programs
  • Life insurance
  • Employer-sponsored retirement saving accounts
  • Disability income protection

Restrictions for benefits and compensation

The biggest restriction regarding benefits and compensation in Bahrain is that you must set up a subsidiary before you can supply benefits. However, partnering with a subsidiary alternative like G-P can simplify the process. Instead of establishing a subsidiary in Bahrain, you can leverage our established entity infrastructure to begin hiring in minutes. We’ll hire employees to work on your behalf, handle all Bahrain benefits and compensation to ensure you stay compliant.

Bahrain competitive benefits

Your employee benefits program is a key component of your international growth strategy. With a successful program, you’ll be able to competitively recruit and hire in-country talent as well as deepen engagement and retention with local employees. Compliance, market standards, and your company’s budget are all vital factors in building an effective plan in Bahrain, and you’ll need trusted resources to help find the right balance.

Bahrain employee benefits plans

At G-P, we offer the expertise and solutions you need to craft a benefits plan that can help your company stand out. By offering competitive benefits, you can demonstrate that you truly value your team’s contributions. When you set your employees up for success, you’ll both advance your company’s growth and deepen employee engagement.

Requirements for employee benefits in Bahrain

Before you consider fringe benefits, you’ll need to make sure you have the statutory requirements covered. Employers in Bahrain must provide the following benefits at a minimum:

  • 30 days of vacation per year
  • 60 days of paid maternity leave
  • Sick leave
  • Public holiday leave

How to design your employee benefits program

The best options for benefits offerings will look slightly different in every country, but you can follow some fundamental principles to help you plan anywhere. Consider these 3 steps as you create your benefits program.

1. Establish your budget and objectives.

As you begin planning, you’ll need to identify your program goals and the scope of services you can provide. Discuss your company’s responsibilities with stakeholders, evaluate available resources, and determine what you can afford to spend. Setting aside a percentage of your revenue can make it easier to scale your offerings as your company grows. Knowing your budget and priorities will help you create a program that is sustainable in the long term.

2. Learn about local workers’ needs.

The next step is to evaluate what your employees will need from your program. You might conduct interviews or send questionnaires to local workers to obtain information regarding their expectations. During this stage, you can also research the offerings of other companies in your industry and location.

3. Build your benefits plan.

Having identified your priorities, budget, and critical employee needs, you can build your benefits plan. You’ll want to ensure to include cost containment features, outsourcing costs (if applicable), and employee contributions in your benefits administration calculations.

Average cost of benefits

Benefits administration costs can vary widely from one company to another. Knowing your budget will be more valuable than assessing an average price for employee benefits in Bahrain.

How to calculate employee benefits

Some benefits calculations are outlined in Bahrain’s labor laws. You must provide full pay during maternity leave and annual leave. Sick leave rates should be calculated as follows:

  • 15 days at full pay
  • 20 days at half pay
  • Remaining 20 days with no further pay

To calculate supplemental benefits, you can use your research on comparable industry offerings to help you set competitive rates.

How are employee benefits taxed in Bahrain?

The country has no income tax and no tax deductions. Consequently, you will not need to withhold any taxes from your employees’ benefits compensation.

Employee health benefits plans

The National Health Insurance Scheme provides coverage for all citizens of the country. However, the 2018 Health Insurance Law No. 23 stipulates that all international workers and visitors to the country must also have health insurance coverage. International workers must receive employer-sponsored insurance, so you’ll need to explore private medical insurance options for any non-nationals on your team.

Partner with G-P to build your everywhere workforce.

As your partner in global expansion, G-P will handle payroll and compliance, so you can focus on growing your team and scaling your business. Our market-leading Global Growth Platform™ is powered by the first fully customizable suite of global employment products and backed by the industry’s largest team of in-country HR and legal experts to streamline payroll management and help you offer competitive, compliant local benefits.

Learn more about our platform and request a proposal today.


THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.

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