Bahrain Indemnity Calculator
Updated November 2026 · Free · No sign-up
Calculate Bahrain end-of-service indemnity — expat workers: half a month’s wage per year for the first three years, one month per year after — now funded through monthly SIO contributions since March 2024.
Quick answer: Bahrain indemnity: 15 days’ wage/year (first 3 years) + one month/year beyond, on the last wage. Since March 2024 employers pay it monthly into the SIO (4.2% then 8.4% of wages) instead of a lump at exit — the Gulf’s first funded-portability conversion.
The Classic Formula (Still the Benefit Measure)
| Years | Accrual |
|---|---|
| First 3 | Half a month’s wage per year (15 days) |
| Beyond 3 | One month per year |
On the final wage, fractions pro-rata, resignation and termination treated alike for the accrued amount (Bahrain never had Saudi-style resignation haircuts for the post-3-year band).
The 2024 SIO Conversion — What Changed
From 1 March 2024, employers of non-Bahrainis pay monthly contributions to the Social Insurance Organisation: 4.2% of wages (years 1-3) and 8.4% (after) — the actuarial equivalent of the indemnity formula. At exit, the WORKER claims the accumulated amount from the SIO, not the employer. Effects: no more insolvency risk on your indemnity, no more exit-time disputes over the lump sum, and pre-2024 service remains an employer liability under the old formula (two-era exits, like Hong Kong’s transition).
Worked Example
BD 600, 7 years (all pre-2024 for simplicity): 3 × 300 + 4 × 600 = BD 3,300. Post-2024 service instead accumulates in SIO at 4.2/8.4% monthly — roughly the same money, state-held.
Claims
Post-2024 portions: SIO claim at end of service (portable between employers — the regional novelty). Pre-2024 portions: employer-owed under the Labour Law, Ministry of Labour mediation then courts. Bahrainis sit in the social-insurance pension system instead. Compare the unfunded neighbours: Kuwait, Qatar.
Frequently Asked Questions
How is Bahrain indemnity calculated?
Half a month’s wage per year for the first three years, one month per year after, on the final wage — now accrued via monthly SIO contributions (4.2%/8.4%) since March 2024.
What changed in March 2024?
Expat indemnity became a funded SIO scheme — employers pay monthly; workers claim from the SIO at exit, eliminating employer-default risk.
What happens to pre-2024 service?
It remains an employer liability under the classic formula at exit — most tenured expats have two-era computations.
Does resignation reduce it?
No tenure haircuts like Kuwait/Saudi — accrued indemnity pays on exit regardless of who ends it (gross-misconduct forfeiture aside).
Is it portable between jobs now?
The SIO-held portion is — changing employers no longer resets or risks the accumulated amount.
✓ Formula verified • Last updated: November 3, 2026