How to calculate end-of-service indemnity in Bahrain
Last reviewed: 14 June 2026Checked against the official rules.How we verify
Bahrain changed its end-of-service system for expatriates on 1 March 2024. The value you accrue is the same, but it is now pre-funded through monthly employer contributions to the Social Insurance Organisation (SIO). Here is how the amount works.
In short
An expatriate's end-of-service value in Bahrain is half a month's wage for each of the first three years and a full month for each year after, on basic salary plus social allowance. Since March 2024 it is funded monthly to the SIO and claimed from the SIO when you leave.
Key facts
- Rate
- Half a month/year for years 1-3, then 1 month/year
- Wage basis
- Basic salary + social allowance
- Funding
- Monthly SIO contributions (since 1 Mar 2024)
- Eligibility
- 1 year (for the pre-2024 portion)
- On resignation
- No reduction
01Step 1 — Use basic salary plus social allowance
The indemnity is based on basic salary plus the social allowance, if any. Housing, transport and other allowances are excluded.
02Step 2 — Apply half a month, then a full month
You accrue half a month's wage for each of the first three years of service, and one full month's wage for each year beyond three, pro-rated for partial years.
03Step 3 — Understand the SIO system
Since 1 March 2024 the employer pays a monthly contribution to the SIO instead of a lump sum: 4.2% of wage for the first three years and 8.4% after. Over a year these equal roughly half a month and one month, so the accrued value matches the formula above. You claim it from the SIO when you leave.
04Worked example — 6 years at BHD 750
First three years: 0.5 × 750 × 3 = BHD 1,125. Next three years: 1 × 750 × 3 = BHD 2,250. Total accrued value = BHD 3,375.
| Years of service | Accrued value |
|---|---|
| 1 year | BHD 375 |
| 3 years | BHD 1,125 |
| 5 years | BHD 2,625 |
| 6 years | BHD 3,375 |
| 10 years | BHD 6,375 |
Enter your salary and dates for your exact figure.
Frequently asked questions
What changed in March 2024?
For service from 1 March 2024 the indemnity is funded monthly into the SIO (4.2% then 8.4% of wage) and paid out by the SIO, rather than paid as a lump sum by the employer at the end.
Which salary is used?
Basic salary plus social allowance only; other allowances are excluded.
Does resignation reduce it?
No. Under the current system the value accrues the same whether you resign or are terminated.
Guides for other countries
Based on Bahrain Labour Law No. 36 of 2012 and SIO Resolution 109/2023