Bahrain End of service gratuity has been subject to recent changes.

See below the Mar 2024 updates:

In Bahrain, the legal framework traditionally didn’t require employers to establish pension or savings schemes for their expatriate workers.
However, an End of Service Gratuity (EOSG) upon the cessation of employment, calculated based on a combination of the employee’s final salary, years of service, and certain accrual rates was in place.

Essential Elements:

Employers are to report their foreign workers’ complete compensation through the SIO portal, detailing all salary components such as base pay, sales commissions, annual bonuses, and relevant allowances for housing, transportation, and communication.
Should any component of an employee’s compensation change, the employer is mandated to update the information on the portal accordingly.

The contribution rates to the EOSG fund continue unchanged; employers will contribute 4.2% of an employee’s monthly earnings for the initial three years of service, increasing to 8.4% thereafter. For employees with over three years of service by 1 March 2024, contributions will automatically be set at the higher rate of 8.4%.
Employers must also settle any gratuity payments for service periods before 1 March 2024, as these are not covered by the new EOSG system.

Imposed Penalties:

Contributions to the EOSG are due within the first half of each month. Late payments will accrue interest at 5% of the overdue amount. Non-payment may incur penalties of up to 20% of the owed contributions for the duration of the delay.

Next steps

Employers should ensure their non-Bahraini employees’ salary data are recorded in the SIO portal by 1 April 2024.