End-of-Service Benefit Calculator
Bahrain Indemnity Calculator: End-of-Service Leaving Indemnity
Free, accurate, and instant — based on Bahrain Labour Law for the Private Sector No. 36 of 2012, Article 116
Bahrain's end-of-service mechanism changed on 1 March 2024. Service before that date is paid as a lump sum by your employer; service from that date onward is funded through employer contributions to the Social Insurance Organisation (SIO) and is claimed from SIO directly, per Art. 116.
Bahrain End-of-Service Gratuity Calculator
Based on Bahrain Labour Law for the Private Sector No. 36 of 2012, Article 116
Your result will include
Total gratuity in BHD
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Year-by-year accrual table
See exactly how gratuity builds over time
Law citation & legal notes
Bahrain Labour Law for the Private Sector No. 36 of 2012, Article 116
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How much leaving indemnity do you get in Bahrain?
In Bahrain, end-of-service leaving indemnity is half a month’s wage for each of your first three years of service, then a full month’s wage for every year after that. It is calculated on your basic salary plus social allowance, has no cap, and is paid whether you resign or are terminated — there is no resignation reduction and no minimum service, so it accrues from your first day. Since 1 March 2024, for expatriate workers this benefit is funded by monthly employer contributions to the Social Insurance Organisation (SIO) and claimed from SIO. This is set by Labour Law No. 36 of 2012, Article 116.
- Local term
- Leaving indemnity
- Years 1–3
- ½ month’s wage per year
- Year 4 onward
- 1 month’s wage per year
- Wage base
- Basic + social allowance
- Minimum service
- None — accrues from day one
- Maximum
- No cap
Last reviewed: July 2026
What is end-of-service leaving indemnity in Bahrain?
End-of-service leaving indemnity — also called gratuity or an end-of-service benefit — is the payment you receive when your employment ends in Bahrain. For Bahrain’s expatriate workforce it is the main statutory leaving entitlement, while Bahraini nationals are covered by the Social Insurance Organisation (SIO) pension scheme.
The indemnity is governed by Bahrain Labour Law for the Private Sector No. 36 of 2012, Article 116. The rate is half a month’s wage for each of the first three years of service, and one month’s wage for every year after that, calculated on your basic salary plus social allowance.
Since 1 March 2024, the way expatriate indemnity is funded changed under Resolution No. 109 of 2023: instead of a lump sum paid by the employer at the end, employers now pay monthly contributions to the SIO, and the worker claims the benefit from SIO. The amount you are owed under Article 116 did not change — only who holds and pays it. This calculator shows your full Article 116 entitlement and explains how the new claim mechanism works.
How to calculate indemnity in Bahrain, step by step
How to compute indemnity in Bahrain: you need your last basic salary plus any social allowance, your length of service, and the two rates in Article 116. That is the whole Bahrain labour law gratuity calculation: follow these steps, or use the calculator above.
- 1
Add basic salary and social allowance
Your indemnity wage is your last basic salary plus any social allowance. Other allowances (housing, transport, etc.) are not included (Article 47).
- 2
Work out your daily wage
Daily wage = (basic + social allowance) ÷ 30.
- 3
Apply half a month for the first three years
For each of your first three years you earn 15 days of wage (half a month): 15 × daily wage × years (up to three).
- 4
Apply one month from year four
For every year beyond three you earn a full month (30 days): 30 × daily wage × the years above three. Partial years are prorated at that year’s rate.
- 5
No reduction, no cap
There is no resignation reduction and no maximum. For expatriates, service from 1 March 2024 is funded through the SIO — see below.
| Service period | Indemnity earned |
|---|---|
| Each of years 1–3 | ½ month’s (15 days’) wage per year |
| Each year from year 4 | 1 month’s (30 days’) wage per year |
| Wage base | Basic salary + social allowance |
| Overall cap | No maximum |
Calculated on basic salary + social allowance, daily wage = wage ÷ 30. No minimum service and no resignation reduction. Since 1 March 2024, expatriate indemnity is funded via SIO monthly contributions — Article 116 & Resolution 109/2023.
Indemnity calculation in Bahrain: worked examples
Three worked examples using Article 116 (daily wage = (basic + social allowance) ÷ 30), then the two examples in LMRA's own wages and indemnity booklet with this calculator's figure beside each. Your own figures will differ, so run them in the calculator above.
| Service | Days of wage | On BHD 500 basic + social allowance |
|---|---|---|
| 1 year | 15 days | BHD 250 |
| 3 years | 45 days | BHD 750 |
| 5 years | 105 days | BHD 1,750 |
| 10 years | 255 days | BHD 4,250 |
| 15 years | 405 days | BHD 6,750 |
| 20 years | 555 days | BHD 9,250 |
Figures from the calculator above on BHD 500 a month of basic wage plus social allowance (daily wage BHD 16.67). They are the same on resignation or termination, there is no cap, and part-years are paid in proportion.
3 years, contract ended
- Basic + social allowance: BHD 400 → daily wage = 400 ÷ 30 = BHD 13.33
- 15 days × 3 years = 45 days
- 45 days × BHD 13.33 = BHD 600 (1½ months)
- Half a month per year for the first three years.
IndemnityBHD 6006 years (tier jump after year 3)
- Basic + social allowance: BHD 600 → daily wage = BHD 20
- Years 1–3: 15 × 3 = 45 days
- Years 4–6: 30 × 3 = 90 days → 135 days total
- 135 days × BHD 20 = BHD 2,700
IndemnityBHD 2,7005 years, resignation
- Basic + social allowance: BHD 800 → daily wage = BHD 26.67
- Years 1–3: 45 days; years 4–5: 60 days → 105 days total
- 105 days × BHD 26.67 ≈ BHD 2,800
- Paid in full — no resignation reduction in Bahrain.
Indemnity≈ BHD 2,800LMRA's first example: BHD 150 for 15 months
- LMRA's booklet (December 2024) counts months: half a month's wage is BHD 75 a year, so 75 ÷ 12 × 15 = BHD 93.75
- This calculator counts days: 1 Jan 2025 to 1 Apr 2026 is one year (BHD 75) plus 90 days at the same rate (75 × 90 ÷ 365 = BHD 18.49), so BHD 93.49
- The same 15 months from 1 Mar 2025 to 1 Jun 2026 end on 92 days: BHD 93.90
IndemnityBHD 93.49 to 93.90 (LMRA: 93.75)LMRA's second example: BHD 420 for 55 months
- Booklet: the first 36 months 210 ÷ 12 × 36 = BHD 630, the next 19 months 420 ÷ 12 × 19 = BHD 665, total BHD 1,295
- This calculator, 1 Jan 2021 to 1 Aug 2025: BHD 630 for years 1–3, BHD 420 for year 4, and 212 days at the full-month rate (420 × 212 ÷ 365 = BHD 243.95), so BHD 1,293.95
- From 1 Jul 2021 to 1 Feb 2026 the last part-year is 215 days: BHD 1,297.40
- Both apply Article 116. The booklet treats every month as a twelfth of a year; the calculator counts the actual days, so the two differ by a few dinars at most.
IndemnityBHD 1,293.95 to 1,297.40 (LMRA: 1,295)
Who is eligible for leaving indemnity in Bahrain?
The indemnity applies to private-sector employees under the Labour Law. There is no one-year qualifying period.
No minimum service period
Article 116 grants the indemnity “for fractions of the year in proportion to the period spent at the employer’s service” — it accrues from your first day, so even a few months of service earn a proportional amount. (Separate probation rules can affect a dismissal in the first three months.)
Expatriate (non-Bahraini) employees
Leaving indemnity is the end-of-service benefit for expatriate private-sector workers. Since 1 March 2024 it is administered through the SIO monthly system for this group.
Bahraini nationals
Bahraini nationals are covered by the SIO social-insurance pension scheme (with employer and employee contributions) rather than the leaving indemnity.
Resignation and termination are equal
Bahrain does not reduce the indemnity for resignation. Whether you resign, are terminated, or your contract expires, the amount is the same.
Wage base is specific
The indemnity is calculated on basic salary plus social allowance only. Other allowances (housing, transport, etc.) are excluded.
Dismissal without notice (Article 107)
Article 107 lets an employer end the contract “without notice or compensation” on a listed serious ground, such as forged certificates, or unexcused absence of more than 20 scattered or 10 consecutive days in a year after written warnings. It does not take away the leaving indemnity: Article 116 grants it whenever the contract ends, and no article of Law 36/2012 removes it. Guides that say otherwise are repeating the previous law.
The new SIO system, resignation, and service before March 2024
The 2024 funding change: this is the biggest recent development in Bahrain end-of-service. Under Resolution No. 109 of 2023, from 1 March 2024 the leaving indemnity for expatriate private-sector workers is no longer paid as a lump sum by the employer when you leave. Instead, employers pay a monthly contribution to the Social Insurance Organisation (SIO) — 4.2% of your wage for the first three years of service and 8.4% thereafter — and you claim the accumulated benefit directly from SIO when your employment ends.
Service before and after 1 March 2024: only service from 1 March 2024 onward is funded through SIO. Any service you completed before that date remains your employer’s direct obligation, paid as a lump sum under the traditional Article 116 formula. If your employment spans the change, your indemnity is effectively split into an employer-paid portion (pre-March 2024) and an SIO-paid portion (from March 2024). The calculator flags which part of your service falls on each side.
The amount did not change: importantly, the SIO reform changed who holds and pays the indemnity, not how much you are owed. Your Article 116 entitlement — half a month per year for the first three years, then a month per year — is the same. This calculator shows that full entitlement.
Resignation vs termination: the reason your employment ends does not change your indemnity in Bahrain. Resignation, termination, and contract expiry are all paid the same, and there is no minimum service — the indemnity accrues proportionally from your first day.
Common Bahrain leaving indemnity mistakes
Thinking the SIO change reduced your entitlement
It didn’t. The 2024 reform changed who pays (employer lump sum → SIO monthly contributions), not the Article 116 amount you are owed.
Using total salary instead of basic + social allowance
The indemnity is calculated on basic salary plus social allowance only. Housing, transport, and other allowances are excluded.
Assuming a one-year minimum
There is none. Article 116 pays for fractions of a year in proportion to service, so the indemnity accrues from your first day.
Forgetting the rate rises after three years
The first three years accrue half a month each; every year after that accrues a full month. Missing the jump undercounts longer service.
Expecting a resignation reduction
There is none in Bahrain. Resignation is paid the same as termination.
Not knowing where to claim
For service from 1 March 2024, expatriates claim from the SIO, not the employer. Pre-March-2024 service is still claimed from the employer.
Tips for employees in Bahrain
- Check your payslip for your basic salary and social allowance — together they form your indemnity wage.
- Know your start date: if it is before 1 March 2024, part of your indemnity is an employer lump sum and part is via SIO.
- For service from March 2024, keep your SIO records — you claim that portion from SIO when you leave.
- Keep copies of your contract, joining date, and last working day so your service is counted correctly.
- If your final settlement or SIO benefit looks wrong, you can raise a complaint with the Ministry of Labour or the LMRA.
Important legal notes
Governing law
Bahrain Labour Law for the Private Sector No. 36 of 2012, Article 116 (leaving indemnity), and Resolution No. 109 of 2023 (the SIO monthly-contribution system from 1 March 2024).
Wage base
The indemnity is calculated on the last basic salary plus social allowance; other allowances are excluded.
SIO administration
Since 1 March 2024, expatriate indemnity for service from that date is funded by monthly employer contributions to the SIO (4.2% of wage for years 1–3, 8.4% thereafter) and claimed from SIO. Earlier service remains the employer’s lump-sum obligation.
Estimate, not legal advice
This tool gives an accurate estimate for guidance. Confirm your final figure with your employer, the SIO, the Ministry of Labour, or a qualified lawyer before acting.
Frequently asked questions
How is leaving indemnity calculated in Bahrain?
Leaving indemnity is half a month’s wage for each of the first three years of service, then a full month’s wage for every year after that, calculated on your basic salary plus social allowance — Bahrain Labour Law No. 36 of 2012, Article 116. There is no cap.
How did Bahrain’s end-of-service system change in 2024?
From 1 March 2024, under Resolution No. 109 of 2023, expatriate leaving indemnity is no longer a lump sum paid by the employer at the end. Employers now pay monthly contributions to the Social Insurance Organisation (SIO) and the worker claims the benefit from SIO. The Article 116 amount owed is unchanged.
Is Bahrain indemnity based on basic salary only?
No. It is calculated on basic salary plus social allowance. Other allowances such as housing and transport are excluded.
Do I get leaving indemnity if I resign in Bahrain?
Yes. Bahrain does not reduce the indemnity for resignation — resignation, termination, and contract expiry are all paid the same amount.
Is there a minimum service period for indemnity in Bahrain?
No. Article 116 pays the indemnity for fractions of a year in proportion to your service, so it accrues from your first day. (Separate probation rules can apply to a dismissal in the first three months.)
How many days of indemnity do I get per year in Bahrain?
15 days (half a month) of wage for each of the first three years, and a full month (30 days) for every year after that.
Is there a maximum leaving indemnity in Bahrain?
No. Bahraini labour law does not cap the total leaving indemnity.
Where do I claim my end-of-service benefit in Bahrain?
It depends on when the service was completed. Service before 1 March 2024 is paid by your employer as a lump sum. Service from 1 March 2024 onward is funded through the SIO, and you claim that portion from the SIO.
When is my indemnity paid in Bahrain?
It depends on who ended the contract and when you worked. Article 40(b)(4) requires your employer to pay your wage and all amounts due immediately when the employment ends, or within seven days of your last day if you resigned. For service from 1 March 2024 the indemnity comes from the SIO instead: you apply online once the job ends, and the SIO says it pays within 5 working days of the application. Your employer still owes the share for any service before that date.
Did the SIO change reduce my end-of-service benefit?
No. The reform changed who holds and pays the benefit — from an employer lump sum to SIO monthly contributions — not the Article 116 amount you are entitled to.