The formula
| Service | Indemnity per year |
|---|---|
| Years 1–3 | ½ month’s wage |
| Year 4 onwards | 1 month’s wage |
The calculator also splits the result by period:
- Owed by the employer: the formula applied to service before 1 March 2024.
- Funded via the SIO: the remainder. The worker claims it from the SIO, and its real value depends on the contributions actually paid (4.2% or 8.4% of the monthly wage).
Worked example
Joined 1 March 2019, leaving 28 February 2026, wage BHD 600
- Total service: about 7 years.
- First 3 years: 3 × ½ × 600 = BHD 900. Next 4 years: 4 × 600 = BHD 2,400. Total: BHD 3,300.
- Service before March 2024 (5 years): 900 + 2 × 600 = BHD 2,100 owed by the employer.
- BHD 1,200 funded through the SIO.
Sources differ on whether the wage means basic pay only or basic plus social allowance. Use the figure in the employment contract. See the Bahrain payroll guide.
Frequently asked questions
How is leaving indemnity calculated in Bahrain?
Half a month's wage per year for the first three years and one month's wage per year after that, pro rata (Labour Law 36/2012, Art. 116).
Who pays the indemnity since March 2024?
For service from 1 March 2024, employers pre-fund the indemnity through monthly SIO contributions (4.2% of wage in the first three years, 8.4% after), and the worker claims it from the SIO. For service before March 2024, the employer still pays.
Do Bahraini nationals get leaving indemnity?
No. Bahrainis are covered by the SIO pension scheme instead.