G-P provides employer of record services for customers that want to hire employees and run payroll without first establishing a branch office or subsidiary in Bahrain. Your candidate is hired via G-P’ Bahrain PEO in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. The individual is assigned to work on your team, working on your company’s behalf exactly as if he or she were your employee to fulfill your in-country requirements.
Our solution enables customers to run payroll in Bahrain while HR services, tax, and compliance management matters are lifted from their shoulders onto ours. As a Global PEO expert, we manage employment contract best practices, statutory and market norm benefits, and employee expenses, as well as severance and termination if required. We also keep you apprised of changes to local employment laws in Bahrain.
Your new employee is productive sooner, has a better hiring experience and is 100% dedicated to your team. You’ll have peace of mind knowing you have a team of dedicated employment experts assisting with every hire. G-P allows you to harness the talent of the brightest people in more than 185 countries around the world, quickly and painlessly.
When negotiating terms of an employment contract and offer letter with an employee in Bahrain, it may be useful to keep the following in mind:
Employment Contracts in Bahrain
It is legally required to put a strong, written employment contract in place in Bahrain, in the local language, which spells out the terms of the employee’s compensation, benefits, and termination requirements. Two copies of the contract should be created, and the employer and employee should each retain one. An offer letter and employment contract in Bahrain should always state the salary and any compensation amounts in Bahraini dinar rather than a foreign currency. All employees engaged via G-P’ Global PEO and employer of record solution in Bahrain are engaged via a locally compliant contract, which is, of course, part of our service.
Working Hours in Bahrain
In Bahrain, the workweek is generally 40 to 48 hours, eight hours per day, with daily hours restricted to six hours per day for Muslim workers during Ramadan. Friday and Saturday are the weekend days; the workweek runs Sunday through Thursday.
Overtime should be paid at an additional 25%.
Holidays in Bahrain
9 holidays are celebrated in Bahrain:
- New Years Day
- Labour Day
- Eid Al Fitr
- Eid Al-Adha
- Hijri New Year
- Prophet’s Birthday
- National Day
Vacation Days in Bahrain
Employees are generally entitled to 30 days of annual paid leave after one year of service. During the first year of employment, the employee is entitled to take accrued vacation, which for all employees accrues at a rate of 2 1/2 days per month. Six days of the leave must be taken consecutively. Employers typically pay for expatriate employees’ air travel home during their vacation.
Employees are also entitled to a three day period of paid leave for marriage if they present a copy of the marriage certificate.
Once during employment, Muslim employees are eligible for 14 days of paid leave for a pilgrimage to Mecca, providing they have worked for the employer for at least 5 years.
Bahrain Sick Leave
Generally, employees are entitled to 55 days of sick leave per year:
- 15 days at full pay
- 20 days at half pay
- 20 days without pay
Maternity/Paternity Leave in Bahrain
Women are generally entitled to 75 days of maternity leave:
- 60 days of paid leave
- 15 days of unpaid leave
Women in Bahrain are not allowed to work for 40 days after the birth of a child.
Health Insurance in Bahrain
Bahrain has a public/private healthcare system. Citizens of Bahrain receive free or heavily subsidized medical care. Foreign nationals have access to the same facilities and doctors, but must pay for care and thus are strongly advised to purchase health insurance. It is not common for companies to provide supplemental health insurance benefits, but it can in some cases be negotiated.
Bahrain Supplementary Benefits
Housing, transportation, and utility allowances are common in Bahrain. We generally recommend negotiating the total compensation with an employee in Bahrain inclusive of such allowances, otherwise, an employer will be negotiating multiple elements when the total compensation is what ultimately matters to both parties.
Termination/Severance in Bahrain
Employees in Bahrain with indefinite contracts who are terminated after three months are generally entitled to receive two days of wages for each month served, with a minimum of one month pay and a maximum of 12 months of pay, regardless of whether the termination was for cause.
Employees with fixed-term contracts are generally entitled to receive the pay they would have received for the rest of the contracted period. A different arrangement may be made if both parties agree and that agreement is at least three months’ pay or the remaining term, whichever is less.
Employees in Bahrain who are not covered by the Law on Social Insurance (GOSI) are generally entitled to an indemnity at the end of their employment contract, also known as an End of Service Gratuity. Such indemnity should be calculated at a half a month for each year of the first three years of work and a month for each of the following years.
Paying Taxes in Bahrain
There are no personal income taxes in Bahrain.
Employees pay a social tax of 1% of wages for unemployment insurance.
Local employees also must contribute 7% of their salary for social security; employers pay 12%. For expats, employees pay 1% while employers pay 3%.
Establishing a branch office or subsidiary in Bahrain to engage a small team is time-consuming, expensive and complex. Bahraini labor law has strong worker protections, requiring great attention to detail and an understanding of local best practices. G-P makes it painless and easy to expand into Bahrain. We can help you hire your candidate of choice, handle HR matters and payroll, and ensure that you’re in compliance with local laws, without the burden of setting up a foreign branch office or subsidiary. Our Bahrain PEO and Employer of Record solution provides you peace of mind so that you can focus on running your company.
If you would like to discuss how G-P can provide a seamless employee leasing or PEO solution for hiring an employee in Bahrain, please contact us.