Do allowances count towards the award in Bahrain?

Wages in Bahrain are assessed on the "basic wage plus the social allowance" basis. See "How is the award calculated?" above for details.

When and how is the award paid?

Gratuity is a lump sum paid at the end of employment. For post-1-March-2024 service the worker applies to the Social Insurance Organisation (no application charges). Scope: expatriate private-sector employees covered by the employment-injuries insurance branch; Bahraini employees fall under the pension system.

Are fractions of a year counted?

Yes — fractions of a year are pro-rated to the actual period of service.

End-of-Service Benefits Guide: Bahrain

This guide explains the key end-of-service rules in Bahrain in plain language, based on Labour Law No. 36 of 2012. Every figure comes from the official texts listed under Sources below, and the worked example is computed by our own calculator.

Scope: private-sector employees covered by the labour law. Excludes domestic workers, free-zone employees under separate regimes, and workers covered by national pension/social-insurance systems.

Who qualifies?

On termination or contract expiry: no statutory minimum service period.
On resignation: no statutory minimum service period.

Identify the right payer by your start date: the employer for earlier service, the Social Insurance Organisation for later service.

How is the award calculated?

The award is based on the "basic wage plus the social allowance", with fractions of a year pro-rated to actual service. The formula:

half a month for each year during the first 3 years of service
a full month for each year after that

Worked example

An employee on a monthly wage of 10,000 BHD with 6 years of service (termination case):

3 years × half a month of the wage = 15,000 BHD
3 years × a full month of the wage = 30,000 BHD
Total: 45,000 BHD

Resignation vs termination

The law does not distinguish between resignation and termination when calculating the award — the result is the same either way.

Cap on the award

no statutory cap on the total award

Notice period and annual leave

Notice (Termination with notice (Art 99)): employee 30 days / employer 30 days.
Annual leave: 30 days — On full pay after 1 year of service, accruing at 2.5 days per month.

Transitional periods

Service before 1 March 2024: the employer owes the Article 116 indemnity directly (lump sum on leaving). Service from 1 March 2024: the employer pays monthly SIO subscriptions (4.2% of monthly wages for the first three years of service, 8.4% after) and the worker claims the gratuity from the SIO. Workers leaving now typically claim TWO amounts from two places.

1 March 2024

Common mistakes

The common claim that resignation halves the award — the law contains no such reduction.
Claiming from the wrong payer — identify the payer from your service start date.
Including allowances other than the social allowance in the base.

Notes on the figures

Because you did not enter a start date, we could not attribute the payer. Enter the date to see the employer and social-insurance portions.

Official sources

Every figure in this guide comes from the following official sources:

Labour Law No. 36 of 2012 — Article 116

Formula verified against the law text: half a month/year (first 3 years), one month/year after, pro-rata fractions. The SIO page states the wage basis: basic salary + social allowance, on the last wages.
https://www.sio.gov.bh/en/end-of-service-gratuity-for-non-bahrainis
Edict No. 109 of 2023 (SIO end-of-service reform) — Effective 1 March 2024

Official SIO page: 4.2% of monthly wages for the first three years, 8.4% after; worker claims from SIO. Pre-March-2024 service remains the employer’s liability under Article 116.
https://www.sio.gov.bh/en/end-of-service-gratuity-for-non-bahrainis
Labour Law No. 36 of 2012 — Article 99

30 days’ notice for termination.
https://www.sio.gov.bh/en/end-of-service-gratuity-for-non-bahrainis

Frequently asked questions

Do allowances count towards the award in Bahrain?: Wages in Bahrain are assessed on the "basic wage plus the social allowance" basis. See "How is the award calculated?" above for details.
Is the award lower if I resign?: No — the law does not distinguish between resignation and termination when calculating the award.
When and how is the award paid?: Gratuity is a lump sum paid at the end of employment. For post-1-March-2024 service the worker applies to the Social Insurance Organisation (no application charges). Scope: expatriate private-sector employees covered by the employment-injuries insurance branch; Bahraini employees fall under the pension system.
Are fractions of a year counted?: Yes — fractions of a year are pro-rated to the actual period of service.