G-P Logo
Request a proposal

Payroll in BhBahrain.






Country Capital



Bahraini dinar (BHD)

There are plenty of laws and regulations to consider during the expansion process. From creating a solid benefits plan to setting up a locally compliant payroll, you have to make sure everything is in place before you begin operations in the country.

Taxation rules in Bahrain

Bahrain payroll tax laws apply to both employers and employees. While there are no personal income taxes in the country, employees are responsible for paying 1% of their wages for unemployment insurance. Local employees also need to contribute 7% of their salary to social security, while international workers have to contribute 1%.

Employers must contribute 12% of a local employee’s salary to social security and 3% for international employees.

Bahrain payroll options

Companies have 3 main Bahrain payroll options:

  • Internal: Larger companies expanding to Bahrain with a commitment to the country may choose to run internal payroll. You’ll need an established subsidiary, hire a full HR team, and ensure you have the funds necessary to run an internal payroll. This choice could be costly and time-intensive.
  • Bahrain payroll processing company: Choosing to work with a Bahrain payroll processing company will help alleviate the burden of running payroll, but keep in mind that with this option, your company is still responsible for compliance. This could mean increased legal costs and hiring experts in the country to ensure that you remain compliant.
  • G-P: The easiest way to run payroll in Bahrain and stay compliant is partnering with an Employer of Record like G-P. With us, you can rest assured that all employees will be paid on time, freeing you to focus on other important aspects of your business.

How to set up a payroll in Bahrain

Before you can set up your Bahrain payroll, you have to establish a subsidiary in the country. Depending on where you incorporate and what type of entity you choose, this process could take weeks or months. You also need to establish in-country bank accounts to pay employees.

Entitlement/termination terms

We recommend outlining important entitlement and termination terms as part of a written employment contract prior to hiring employees and discussing a Bahrain payroll option. Generally, employees with indefinite contracts who are terminated after 3 months get 2 days of wages for each month worked with a minimum of 1 month’s pay and a maximum of 1 year’s pay.

Streamline global payroll management with G-P.

G-P streamlines each step of the payroll management process with our market-leading Global Growth Platform™. Pay teams with confidence anywhere in the world in 150 currencies with our 99% on-time automated payroll system — all with just a few clicks. Our products also integrate with leading HCM solutions, syncing employee payroll data across platforms automatically to create one reliable, convenient source of truth for HR teams.

Contact us to learn more about how we can support you.


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.

Expand in

Book a demo
Share This Guide