Setting up and managing payroll in Bahrain
If your organization is looking to expand in Bahrain, one of the first steps will be hiring employees locally, and this requires setting up a payroll in the country. While it is certainly possible to do this, Bahrain’s unique employment laws, as well as language and cultural barriers, can cause delays and make it a lengthy process for foreign businesses.
At Horizons, we specialize in helping organizations spanning all industries expand internationally, including into Bahrain. We can handle your payroll setup and management, even if you don’t have a legal entity in Bahrain.
Why choose the Horizons payroll solution?
If you have an entity
If you have already established an official entity in Bahrain, we offer outsourced payroll support to help you set up and run your Bahrain payroll. In addition, we can provide HR, contract, and legal compliance support meaning you won’t have to worry about any of the complex administration and can focus on your expansion efforts.
This service is the perfect solution for any organization that has already registered an entity in Bahrain but could benefit from support navigating the unique Bahraini employment system.
If you don’t have an entity
If you don’t have a registered entity in Bahrain, you can use our full payroll outsourcing service. Our Bahraini subsidiary will act as employer of record for your employees, and our team will handle the HR, administration, and complex legal compliance work.
Choose this service for a low-risk, flexible, and scalable solution for your Bahraini payroll setup and management, with all the benefits of hiring locally and none of the usual complications.
Bahrain payroll guide
What are payroll tax and withholdings rules in Bahrain?
Bahrain does not have a personal income tax. There are also no general corporate taxes for most companies. However, employers must pay a 3% tax on the salaries of employees.
Employees must pay 1% of salaries toward unemployment insurance and 6% for social security. Employers must pay 9% of salaries for social security.
Entitlements and terminations
Employees in Bahrain who are on indefinite-term contracts and have worked for at least three months are entitled to a severance payment upon dismissal. This payment varies depending on the length of service as it generally equates to two days of salary per month of service. For fixed-term contractors, employees will usually need to pay for the time left on the contract when dismissing prior to completion.
Notice of termination is usually 30 days or more.
How to establish a Bahrain payroll
If you have not registered an official entity in Bahrain yet, we can provide our more comprehensive payroll service, offering our Bahrain subsidiary to work as your employer of record in the country. Our Bahrain payroll experts can also manage your HR, contracts, legal compliance, and more.
Another option is to outsource your payroll setup and management to Horizons. We can offer the use of our Bahraini subsidiary to act as employer of record for your employees in Bahrain, so you can avoid the complex setup and management process, and can benefit from our solutions even if you don’t have a legal entity in Bahrain. Additionally, we can set up and run your payroll, HR, compliance, and any other associated work, allowing you to work on successfully expanding your businesses in Bahrain.
Manage payroll in Bahrain
Whether it’s EOR service or just payroll management, Horizons’ employment experts can help you get started in 24h.