Bahrain indemnity calculator

How it is calculated

• Wage used: Last basic wage plus social allowance.
• Formula: Half a month’s wage for each of years 1–3, then one month’s wage for each year after 3.
• Minimum service: none when the employer ends the contract.
• If you resign: Full, no reduction.
• Half a month’s wage per year for the first 3 years and one month per year after, with fractions of a year paid pro rata. No reduction for resignation.
• Summary dismissal under Article 107 removes notice and compensation but not the leaving indemnity.
• For non-Bahraini workers, service from 1 March 2024 is paid by the Social Insurance Organization (SIO) from employer contributions; the employer still pays directly for service up to 29 February 2024.

Worked example

An employee on BHD 500.00 a month worked from 1 January 2019 to 31 March 2026 (7 years 3 months) and the employer ended the contract:

Indemnity by years of service: terminated vs resigned

On a wage of BHD 500.00 a month, this is the award under Article 116 after each length of service, if the employer ends the contract and if you resign:

What to know in Bahrain

Bahrain's leaving indemnity under Article 116 of Law No. 36 of 2012 is half a month's wage for each of the first three years and one month for each year after, on the last basic wage plus social allowance. Fractions of a year are paid pro rata. Resigning does not reduce it, and summary dismissal under Article 107 removes notice and compensation but not the indemnity.

For non-Bahraini workers, service from 1 March 2024 is paid by the Social Insurance Organization (SIO) from employer contributions, while the employer still pays directly for service up to 29 February 2024. Sources disagree on exactly which workers the new system covers, and on how the SIO works out its share, so treat the calculator's total as an estimate and confirm your status with the SIO.

Common questions