Employer of Record in Bahrain

An Employer of Record (EOR) in Bahrain legally employs your workers on your behalf. This means the EOR handles all local employment tasks. They manage payroll, taxes, benefits, and compliance with Bahrain's labor laws. You get to manage your team's day-to-day work without needing to set up a local entity. An EOR like Rivermate makes hiring in Bahrain simple.

How an Employer of Record (EOR) Works in Bahrain

Using an EOR in Bahrain follows a straightforward process. You find the talent, and the EOR takes care of the rest.

1. You Find Your Candidate. You recruit and select the person you want to hire in Bahrain.
2. The EOR Hires Them. The EOR legally hires the employee through their local Bahraini entity. They prepare a compliant employment contract.
3. Onboarding Begins. The EOR manages the entire onboarding process. This includes adding the employee to their payroll system and enrolling them in mandatory social security and benefits.
4. We Handle HR. The EOR takes on all legal and HR responsibilities. This includes running payroll, withholding taxes, and ensuring compliance with Bahrain's Labour Law. You can find details on the law at the Labour Market Regulatory Authority website (https://lmra.gov.bh/portal/en/page/show/253).
5. You Manage Your Team. You direct your employee's daily tasks and responsibilities. The EOR is the legal employer, but you manage their work and performance.

Why use an Employer of Record in Bahrain

An EOR helps you expand into Bahrain quickly and compliantly. It removes the significant administrative and legal burdens of international hiring. This lets you focus on growing your business and managing your team.

• Enter the Market Faster. You can hire employees in Bahrain in days, not the months it takes to establish a legal entity.
• Ensure Full Compliance. EORs are experts in Bahraini labor law. They stay up to date on changing regulations so you don't have to. This minimizes your risk of non-compliance.
• Reduce Costs. Setting up a subsidiary in a new country is expensive. An EOR provides a cost-effective alternative to hiring internationally.
• Offer Competitive Benefits. EORs can provide your employees in Bahrain with access to comprehensive benefits packages. This helps you attract and retain top talent.
• Simplify HR. You avoid the complexities of international payroll, tax withholding, and social security contributions. The EOR handles all of it.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Bahrain includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Bahrain.

Hiring in Bahrain can be a great move for your company. The country offers a skilled, bilingual workforce and a business-friendly environment. But before you start, it's important to understand the local labor laws. This guide will walk you through the key aspects of hiring in Bahrain.

Employment contracts & must-have clauses

You must provide a written employment contract in Arabic. If you use another language, you must also provide an official Arabic translation. Keep two copies of the contract, one for you and one for the employee.

Your employment contract should include these essential clauses:

• Parties' Information: Full name and address of both the employer and the employee.
• Employee's Personal Details: Include their date of birth, qualifications, and nationality.
• Job Details: Clearly define the job title, responsibilities, and work location.
• Contract Duration: Specify if the contract is for a fixed term or is indefinite.
• Compensation: State the salary and any benefits in Bahraini Dinar.
• Working Conditions: Outline the working hours, leave entitlements, and overtime provisions.
• Termination Conditions: Detail the notice period and other terms for ending the contract.

Probation periods

You can include a probation period in the employment contract. The standard maximum duration for a probation period is three months. For certain occupations, you may extend this to six months.

During the probation period, either you or the employee can terminate the contract with at least one day's notice. You cannot place the same employee on probation more than once.

Working hours & overtime

The standard workweek in Bahrain is a maximum of 48 hours, typically spread over six days. A regular workday should not exceed eight hours. During Ramadan, the workday for Muslim employees is reduced to six hours.

Here’s how overtime pay works:

Public & regional holidays

Your employees are entitled to paid leave on public holidays. The dates for Islamic holidays are subject to moon sightings and may vary.

Here is a list of public holidays in Bahrain:

• New Year's Day
• Eid al-Fitr
• Eid al-Adha
• Labour Day
• Islamic New Year
• Ashura
• Prophet Muhammad's Birthday
• National Day

Hiring contractors in Bahrain

You can hire independent contractors for specific projects or specialized skills. This offers flexibility, as contractors manage their own taxes and social security obligations.

However, it's crucial to classify workers correctly. Misclassifying an employee as an independent contractor can lead to significant risks, including fines, back payment of wages, and tax liabilities.

An Employer of Record (EOR) can help you avoid these risks. An EOR acts as the legal employer for your workers, ensuring compliance with Bahrain's labor laws. This means the EOR handles contracts, payroll, and benefits, while you manage the employee's day-to-day work. Using an EOR allows you to hire in Bahrain without establishing a local legal entity, saving you time and reducing compliance risks.

In Bahrain, your payroll process is straightforward. A key point is that there is no personal income tax. This means your employees' net salaries can appear higher than in other countries. Your main responsibility for deductions relates to social security contributions.

Payroll cycles & wage structure

You should pay salaried employees at least once a month, usually at the end of the month. If you have employees who work on an hourly basis, you must pay them at least once a week.

An employee's total compensation is made up of a basic salary plus any allowances. The basic salary is the core part of their income before any additions or deductions.

Overtime & minimums

Bahrain does not have a national minimum wage.

When your employees work overtime, you must pay them their regular wage plus an additional amount.

• For extra hours worked during the day, add at least 25% to their hourly rate.
• For hours worked at night, that increases to at least 50% extra.

Overtime should not exceed two hours per day.

Employer taxes and contributions

As an employer, you contribute to social insurance for your employees. The rates are different for Bahraini nationals and expatriates.

Employee taxes and deductions

Your employees also contribute to social insurance. You will deduct this from their wages.

In Bahrain, the benefits and leave you provide to your team are shaped by the Bahrain Labour Law. This law sets the minimum standards you must meet. Think of these as the foundation. Many companies choose to offer more to attract and keep the best talent.

Statutory leave

The law requires you to provide several types of paid leave.

• Annual Leave: Employees get 30 days of paid annual leave after their first year of work. In the first year, they earn 2.5 days for each month they work.
• Sick Leave: If an employee gets sick, they can take up to 55 days of sick leave per year. This is how it's paid:
  • First 15 days: Full pay.
  • Next 20 days: Half pay.
  • Final 20 days: Unpaid.
• Maternity Leave: Female employees receive 60 days of paid maternity leave.
• Paternity Leave: Male employees get one day of paid paternity leave.
• Hajj Leave: Muslim employees who have worked for you for at least one year can take 14 days of paid leave once to perform the Hajj pilgrimage.

Public holidays & regional holidays

Your employees are entitled to paid time off for national and religious holidays. If they have to work on a public holiday, you must pay them their regular wage plus a 150% bonus or give them another day off in lieu.

Typical supplemental benefits

While the law sets the minimum, many businesses offer more to stay competitive. Here’s a look at what's required versus what's often added.

How an EOR can help with setting up benefits

Setting up a benefits plan in a new country can be complex. An Employer of Record (EOR) simplifies this for you.

An EOR acts as the legal employer for your team in Bahrain. This means they handle all the HR tasks, including benefits administration. They make sure your benefits package complies with all local laws. This saves you time and reduces risk.

An EOR can also help you create a competitive benefits package. They understand the local market and can advise you on what supplemental benefits are common. This helps you attract and retain top talent in Bahrain.

When an employee leaves your company in Bahrain, you need to follow a clear process. This process, known as termination or offboarding, is guided by Bahrain's labor laws. You must handle it correctly to be fair to the employee and to protect your business from legal problems. The process involves giving proper notice, paying final dues, and in many cases, providing a severance payment.

Notice periods

You must give employees a written notice before their employment ends. The standard notice period is 30 days. This applies unless the employee is on probation or is paid weekly. For weekly-paid workers, the notice period is 15 days. If your employment contract specifies a longer notice period, you must follow that. You can terminate an employee without notice for serious misconduct, but you need to have a very clear and legally sound reason. If you end a contract without giving the required notice, you have to pay the employee their regular wage for the notice period.

Severance pay

When you terminate an employee's contract, they are usually entitled to severance pay, also known as an end-of-service gratuity. Here is how it is calculated:

This payment is based on the employee's last basic wage. An employee is not entitled to this payment if they are dismissed for gross misconduct.

How Rivermate handles compliant exits

We make sure every employee exit follows Bahrain's labor laws. We manage the entire process so you don't have to worry about compliance.

Here is what we do:

• Verify notice periods. We check the contract and local laws to make sure the correct notice period is given.
• Calculate final payments. We figure out all final dues. This includes unused vacation days, outstanding salary, and the correct end-of-service gratuity.
• Handle the paperwork. We prepare all the necessary termination documents to ensure everything is clear and lawful.
• Ensure a smooth transition. Our goal is to make the employee's departure respectful and professional. This protects your reputation and helps maintain a positive relationship with the departing employee.

Navigating visas and work permits in Bahrain can seem complex. We will break it down for you. Essentially, any non-Bahraini national needs a work visa to be employed in Bahrain. The primary path to getting this visa is through employer sponsorship. This means your employer in Bahrain is responsible for handling the application process on your behalf.

The main authority overseeing this process is the Labour Market Regulatory Authority (LMRA). They issue the work permits that allow you to live and work in the country. These permits are typically valid for one to two years and can be renewed.

Employment visas & sponsorship realities

When you want to hire employees in Bahrain without setting up your own local entity, an Employer of Record (EOR) is a practical solution. An EOR already has a legal presence in Bahrain and can hire and pay employees on your behalf.

Here is what an EOR can and cannot do for visa sponsorship:

• What an EOR can do: An EOR can sponsor work permits for your employees. They handle the application process with the LMRA, ensuring all legal requirements are met. This allows you to bring international talent to Bahrain without the administrative burden of setting up a local company.
• What an EOR cannot do: While an EOR can sponsor many employees, there are limitations. Visa availability can be subject to national quotas. An EOR must also partner with a local Bahraini sponsor to secure work permits.

The most common route for long-term employment is the standard Employment Visa, or work permit. This visa ties the employee to the sponsoring employer. If you have a family, your work permit allows you to sponsor residence permits for your spouse and children, though they will not be able to work without their own separate work visa.

Business travel compliance

For short-term business trips, such as meetings, conferences, or negotiations, a business visa is required. It is important to remember that a business visa does not permit you to carry out paid work in Bahrain.

Here are the key aspects of business travel compliance:

• eVisas: Many nationalities can apply for an eVisa online before traveling. This simplifies the process and is ideal for planned business trips.
• Visa on Arrival: Citizens of some countries can get a visa upon arrival at the Bahrain International Airport.
• Required Documents: When applying for a business visa, you will generally need:
  • A passport valid for at least six months.
  • Proof of a return or onward ticket.
  • Evidence of accommodation, such as a hotel booking.
  • A letter of invitation from a sponsoring Bahraini company may also be required.

Always check the latest regulations before you travel, as visa requirements can change. The official eVisa website is a reliable source of information.