How to Hire in Bahrain

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Hiring in Bahrain - Brief Overview

1.7MBahrain is a thriving business hub in the Middle East, known for its favorable economic policies and growth potential. The country offers a stable political climate, supportive government, low corporate taxes, and easy access to financing. Its strategic location is ideal for regional and international trade.

Bahrain’s modern infrastructure supports efficient business operations. The country’s real strength, however, is its workforce. Bahrain attracts a diverse and skilled pool of professionals, especially in cities like Manama. This multicultural environment fosters innovation and allows businesses to tap into global talent.

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Facts & Stats

Population

1.7M

Caspital City

Manama

Languages Spoken

Arabic

Currency

Bahraini Dinar

GDP Per Capita

$33,100

Ease of Doing Business

69th in the world

Minimun Wage

BHD 300

Average Wage

BHD 1500

Paid Leave

30 days of paid annual leave

Labor Laws in Bahrain

Fundamental Aspects of Hiring in Bahrain

Bahrainization 

Bahrainization is a national policy initiative designed to increase the employment of Bahraini citizens and reduce reliance on expatriate labor. The government sets specific quotas and targets for industries to hire a minimum percentage of Bahraini nationals, complemented by training and development programs to enhance local skills and employability. 

Employers are incentivized to meet these targets through various benefits, while penalties may be imposed for non-compliance. By collaborating with the private sector, the government aims to identify employment opportunities and ensure the effective implementation of Bahrainization policies. The goal is to create a sustainable and inclusive economy, empower the local workforce, and reduce unemployment among Bahraini nationals.

Working Hours in Bahrain

In Bahrain, a typical workweek ranges from 40 to 48 hours. During Ramadan, working hours are reduced to six hours per day. Fridays are usually the designated rest day for Muslims, but some businesses might choose Thursday or Saturday off, aligning with global operations or local school schedules.

Minimum Wage Requirements

Bahrain does not have a government-enforced minimum wage. Instead, wages are generally determined by industry standards and negotiated agreements between employers and employees.

Individual Income Tax

Bahrain does not levy an individual income tax.

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Overtime Pay & Maximum Hours

In Bahrain, employees can work up to two hours of overtime per day, receiving at least 25% extra pay for daytime overtime and 50% for nighttime hours. Overtime compensation is in addition to the annual salary stated in the contract, and senior managers are typically exempt from receiving overtime pay.

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Navigating Employment Taxes in Bahrain

Here's a breakdown of the tax landscape in Bahrain:

Employer Tax Contributions

9%

In Bahrain, employee payroll contributions are generally estimated to be around 9% of their salary.

Employer Tax

17.00%

In Bahrain, employer payroll contributions typically amount to approximately 17% of the employee's salary, plus an additional healthcare fee.

Individual Tax

0%

There is no personal income tax in Bahrain.

Pension in Bahrain

Pension in Bahrain Bahrain is reforming its pension and retirement system, including increasing employer contributions, revising pension calculations, and raising the retirement age for women. Other changes involve linking pension increases to the Social Security fund's financial status and requiring employers to fund end-of-service benefits.

Understanding Employment Termination in Bahrain

Here’s what you need to know about the termination process in Bahrain:

Termination Process

In Bahrain, terminating an employee necessitates valid reasons and a notice period, with office closures requiring notification to the Ministry of Labor. Bahraini nationals generally receive greater protection and higher compensation. Justifiable reasons for termination include:

  • Contract expiration
  • Failure to improve after 60 days
  • Redundancy
  • Resignation

Notice Period

Both employer and employee can terminate the contract with a 30-day notice, during which the contract remains valid, and both parties must fulfill their obligations. If notice is not given, payment instead of notice is required. During the probation period, only a week's notice is needed.

Severance Pay

Upon termination in Bahrain, employees are entitled to salary and benefits up to the termination date, notice or payment instead of notice, compensation for unused leave, reimbursement for unpaid business expenses, and an end-of-service gratuity (EOSG). If the employer terminates the employee, the EOSG typically amounts to 50% of the monthly salary for each year of service up to three years and 100% after that, prorated for partial years.

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Leaves and Company Policies in Bahrain

Here's an overview of the various types of leaves and their corresponding regulations:

Annual Leave

The annual leave entitlement in Bahrain is 30 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays

Employees in Bahrain are given paid time off on public holidays, which are separate from annual leave entitlements.

Date Day Holiday Name
January 1 Monday New Year's Day
April 8 Monday Eid al-Fitr Holiday
April 9 Tuesday Eid al-Fitr
April 10 Wednesday Eid al-Fitr Holiday
June 15 Saturday Arafat Day
June 16 Sunday Eid al-Adha
June 17 Monday Eid al-Adha Holiday
June 18 Tuesday Eid al-Adha Holiday
July 7 Sunday Islamic New Year
September 15 Sunday Prophet Muhammad’s (PBUH) Birthday
December 16 Monday National Day
December 17 Tuesday National Day Holiday

Maternity Leave

Female employees are entitled to 60 days of paid maternity leave, which can be taken before and/or after childbirth. This is applicable to employees who have completed one year of service with the employer.

Paternity Leave

Fathers are granted one day off with full pay following the birth of their child.

Parental Leave

In Bahrain, there are provisions for only maternity and paternity leave.

Sick Leave

In Bahrain, after three consecutive months of service, an employee with a certified illness from a government health center or clinic is entitled to annual paid sick leave as follows:

  • Up to 15 days of fully paid sick leave
  • 20 days of sick leave on half-pay
  • More than 20 days of sick leave without pay

Bereavement Leave

Employees may be granted a few days of paid leave in case of death in their immediate family. 

Study Leave

Employees may also be eligible for leave to pursue further education or training, subject to company policies.

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Frequently asked questions

1. What makes Iris unique for hiring in Bahrain?

Iris offers an advanced AI talent intelligence platform that includes features like an AI job description generator, AI video interviews, and an advanced applicant tracking system (ATS). Additionally, Iris supports personalized outreach and payroll management, making it a comprehensive solution for hiring skilled professionals in Bahrain.

2. Why is Bahrainization important for employers in Bahrain?

Bahrainization is vital for employers as it ensures compliance with legal quotas for hiring Bahraini nationals, offering incentives for adherence and penalties for non-compliance. It enhances corporate social responsibility, fosters socio-economic development, and supports business sustainability by building a skilled local workforce.

3. What are the key labor laws employers should know in Bahrain?

Employers should know Labor Law No. 36 of 2012, which covers employment aspects like working hours, wages, and termination. They must comply with Social Insurance Law, Occupational Safety and Health Regulations, anti-discrimination laws, and the Nitaqat System, which impacts work permits based on Bahrainization targets.

4. How does termination of employment work in Bahrain?

Termination requires a notice period (30 days to three months) and can be for just cause or without cause, the latter needing severance pay. Unlawful termination can be challenged through the Ministry of Labor. Employees are entitled to end-of-service benefits, including unused leave and gratuity based on service years.

5. What are the leave policies and entitlements in Bahrain?

Employees are entitled to 30 days of paid annual leave after one year, up to 55 days of sick leave (full, half, unpaid), 60 days of paid maternity leave, one day of paid paternity leave, 14 days of unpaid Hajj leave, and emergency leave as per contract discretion.

6. How can I get started with Iris for hiring in Bahrain?

To get started with Iris for hiring in Bahrain, you can book a demo or sign up directly through the platform. Iris offers a range of benefits to help you streamline the hiring process. From job description generation to payroll management, Iris makes it easier to build a team of skilled professionals in Bahrain.