Payroll management in Bahrain means much more than just calculating salaries: it entails adherence to local labour laws, social insurance, and tax compliance in the right manner every month.
Several companies, therefore, seek the services of Payroll Middle East for smooth, accurate, and timely management.
We offer comprehensive Bahrain payroll services designed to keep your company compliant with the Bahrain Labour Law, the requirements of the Social Insurance Organization (SIO), and all other local regulations, saving your HR team time and resources.
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Understanding Payroll Compliance in Bahrain
Bahrain enforces strict rules that employers are supposed to follow while paying salaries, including: All companies should
Salaries are paid in Bahraini Dinar, through a bank transfer.
Provide monthly payslips showing clearly the basic pay, allowances, and deductions.
Register all employees with the Social Insurance Organization (SIO).
Deduct and contribute social insurance as per SIO guidelines.
For non-compliances with such duties, penal provisions may operate, apart from suspension of company records; compliance is not optional but imperative.
Payroll Components in Bahrain
Here is what constitutes a compliant payroll process in Bahrain:
- Basic Salary: As per the agreed employment contract.
- Allowances: Housing, transportation, or other benefits.
- Overtime Pay: The overtime rate should at least be 125% of the prevailing rate for excess hours of work.
- Annual Leave Pay: A minimum of 30 days annually of paid annual leave.
- End-of-Service Benefits (EOSB): a lump-sum amount given when an employee leaves employment after a year or more.
- Social Insurance Deductions: SIO is contributed by both employee and employer.
Social Insurance Contributions in Bahrain (SIO)
Every organization must register its workers under the Social Insurance Organization.
Below is the standard contribution breakdown:
| Category | Employer Contribution | Employee Contribution | Total |
|---|---|---|---|
| Bahraini Employees | 12% | 7% | 19% |
| Expatriate Employees | 3% (for occupational injuries) | — | 3% |
Contributions shall be paid on a monthly basis through the official SIO system.
How End-of-Service Benefits Are Calculated
Bahrain Labour Law provides for end-of-service compensation at the end of an employee’s service.
Formula:
The first three years of service: 15 days’ basic salary every year
For each additional year: 1 month’s basic salary per year
Example:
If an employee earns BHD 600 per month and has 5 years of service:
(15/30 × 600 × 3) + (600 × 2) = BHD 3,300 gratuity.
Our payroll professionals make sure it’s always correctly calculated and compliant.
Why Outsource Payroll in Bahrain?
In-house payroll processing is very time-consuming and increases compliance risk significantly. Partnering with a professional team like Payroll Middle East, you will be guaranteed of:
- 100% compliance with Bahrain Labour Law and SIO.
- Salaries, benefits, and deductions have to be calculated correctly.
- Ensuring security and confidentiality of data during handling.
- Timely salary payments, backed by detailed payslips.
- Hassle-free reports for audits or management.
Be it a small startup or large multinational, we have scalable payroll solutions that adapt to your needs.
Industries We Serve
We offer payroll services for a wide range of business lines, including:
- Construction and Real Estate
- Retail and Hospitality
- Healthcare and Education
- Financial Services
- Information Technology
FAQs on Payroll Services in Bahrain
Employers pay 12% for Bahraini nationals and 3% for expatriates, while employees pay 7% of their salary.
Under the Bahrain Labour Law, salaries must be paid at least once a month.
Of course, all professional payroll services calculate EOSB and leave settlement correctly as per Bahrain’s law.
We will handle all tasks, from the calculation of salary to compliance filing, so that you can focus on running the business.
Comply with Bahrain Payroll Law
Payroll in Bahrain doesn’t need to be difficult. From SIO registration to the calculation of end-of-service settlements, our experts will keep your company compliant while paying your employees accurately and on time.
Contact us at Payroll Middle East today and let us make payroll simple, secure, and worry-free.
