How leaving indemnity works in Bahrain
Bahrain changed its system on 1 March 2024, and if your service spans that date your money now comes from two separate places. This is the single most important thing to understand about a Bahraini settlement, and almost no calculator online accounts for it.
Before 1 March 2024: your employer pays
Article 116 of Labour Law No. 36 of 2012 gives half a month's wage for each of the first three years of service and one month's wage for each year after that, paid as a lump sum by the employer. For any service before 1 March 2024, that remains your employer's direct responsibility and you claim it from them.
| Period of service | Rate per year | Paid by |
|---|---|---|
| Before 1 Mar 2024, first 3 years | 15 days' wage | Employer |
| Before 1 Mar 2024, year 4 onward | One month's wage | Employer |
| From 1 Mar 2024, first 3 years | 15 days' wage | SIO, funded by 4.2% employer contributions |
| From 1 Mar 2024, year 4 onward | One month's wage | SIO, funded by 8.4% employer contributions |
From 1 March 2024: the SIO pays
Under Resolution No. 109 of 2023, employers now make monthly contributions to the Social Insurance Organisation for expatriate workers: 4.2% of the monthly wage for the first three years of service, then 8.4%. The three-year mark counts from your original joining date, so anyone with more than three years' service on 1 March 2024 went straight onto the higher rate.
The contributions fund the system; they are not your entitlement. The SIO's own guidance is that it pays the Article 116 formula — 15 days' wage a year for the first three years, one month a year after — on your last basic wage plus social allowance. That is what this page calculates for the SIO portion. When your job ends, you apply to the SIO rather than your employer, and payment is normally made within five working days at no fee. You can claim for a previous employer's period even if you have moved to another company in Bahrain.
The figure depends on the wage your employer declared to the SIO and on the months they actually paid for. Missed months carry a 20% surcharge for the employer, but public guidance does not spell out what the SIO pays while months are missing — so check your wage record on the SIO portal before your last day, while a correction is still a conversation rather than a complaint.
Resignation carries no penalty
Unlike Saudi Arabia and Kuwait, a resigning worker in Bahrain receives the full Article 116 indemnity with no reduction. It is forfeited only in the gross-misconduct cases listed in Article 107 — fraud, serious breach of duty, assault. Ordinary resignation, redundancy and contract expiry never forfeit it.
Bahraini nationals are covered by the SIO pension scheme rather than the expatriate indemnity contributions.
Questions people ask
Who do I claim my indemnity from?
Both, if your service spans 1 March 2024. Service before that date is claimed from your employer as a lump sum. Service after it is claimed from the SIO, which holds the monthly contributions. Two applications, two payments.
What if my employer never registered me with the SIO?
Then contributions may be missing from your account. Check your SIO statement. Employers who fail to submit wage data face penalties, and the obligation to ensure the indemnity is paid still rests with them.
Does resigning reduce my indemnity?
No. Bahrain applies no resignation penalty.
Do I get the contributions, or the formula?
The formula. The SIO pays the Article 116 rate — 15 days' wage a year for the first three years, one month a year after — on your last basic wage plus social allowance. The 4.2% and 8.4% are what your employer pays in to fund it, and they are deliberately close to the same amounts, so the two rarely differ by much; but the entitlement is the formula, not the sum of the contributions.
Does this apply to domestic workers?
Domestic workers are covered by the same Article 116 formula under the main Labour Law, though their indemnity is not universally routed through the SIO. Check your specific arrangement.
Where these rules come from
Labour Law for the Private Sector No. 36 of 2012, Articles 47, 99, 107 and 116 · Resolution No. 109 of 2023, the Leaving Indemnity Resolution, effective 1 March 2024, as amended (Article 5 sets the contribution rates) · Social Insurance Law, Decree-Law No. 24 of 1976, Articles 29 and 31 (late and unpaid contributions) · Social Insurance Organisation guidance, End of Service Gratuity for non-Bahrainis.
Where sources genuinely disagree, this page says so rather than picking a number quietly.