Tax
Bahrain has no personal income tax and no general corporate income tax; oil and gas companies pay 46%. Large multinational groups pay a 15% domestic minimum top-up tax from 2025.
Social insurance (SIO)
| Employer | Employee | |
|---|---|---|
| Bahraini (2026) | 18% | 8% (7% pension + 1% unemployment) |
| Expatriate | 3% occupational injury + 4.2% / 8.4% end-of-service | 1% unemployment |
Under the Law 14/2022 reform, the employer rate for Bahrainis rises 1 point each January: 17% in 2025, 18% in 2026, 19% in 2027 and 20% in 2028. Contributions are capped at a wage of about BHD 4,000 a month and are due by the 15th of the following month. Bahrainis working in other GCC states have a separate rate.
Leaving indemnity for expatriates
Labour Law 36/2012, Article 116: half a month’s wage per year for the first three years, then one month per year, pro rata.
Since 1 March 2024 (Decision 109/2023), employers pre-fund the indemnity through monthly SIO contributions. When the worker leaves, they claim it from the SIO. The employer is still liable for service before March 2024. The Bahrain indemnity calculator splits the two.
Wage Protection System
Wages must be paid through banks or payment providers licensed by the Central Bank of Bahrain. The requirement was phased in by company size between 2021 and January 2022. An enhanced WPS run through LMRA’s Expat Management System launched in October 2025 and requires a named “Wages Responsible Person”. Check LMRA for the current filing deadline, because sources differ on when it became mandatory.
Working time and leave
- Hours: 8 a day, 48 a week; 6 hours a day in Ramadan for Muslim workers.
- Overtime: +25% by day and +50% at night. Rest-day or public-holiday work is paid at 150% or given as a day off in lieu.
- Annual leave: 30 days a year (2.5 days a month) after one year.
- Maternity leave: 60 days at full pay plus 15 days unpaid.
- Minimum wage: there is no statutory private-sector minimum.
Gotchas for foreign employers
- Budget the Bahraini employer rate step-ups through 2028.
- Keep a record of pre-March 2024 service: that portion of the indemnity is still your liability.
- Payments outside WPS count as non-compliant.