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INDEMNITY CALCULATION IN BAHRAIN LABOUR LAWS

According to Bahrain Labour Law Indemnity is protection or compensation is right of every employee given when employee service is ended or terminated. To understand the laws related to indemnity or end of service compensation/ Benefits you must first have knowledge related to you contract, check if your contract is indefinite(permanent) or definite(temporary). There are lot of things in labour laws that were not easy to understand but I try my best to give the simplest possible explanation of each provisions and article related to Indemnity laws.

The legal document which represents Bahrain Labor laws is Law No.36 2012 which is also called  “The promulgation of the labour law in the private sector”. All of below references is taken from that document.

On Which Basis Indemnity(End of Service Compensation) Calculated:

According to Article 47 of Bahrain Labour laws End of Service Indemnity is calculated on the basis of last Basic Salary of month including Social Gratuity if any. Also those worker who works on daily basis and get paid for one day as well as given with commission on each sale or production will be given  indemnity  on the basis of Average wage of Last 3 Months.

Article 111 Provision on End of Service Indemnity:

For Indefinite Labour Contract Holder:(Termination)

Paragraph A: If company/employer terminates the indefinite contract with worker means if worker is fired by company/employer within period of first three months after starting of employee service. Than in this case employee is not given with compensation but the reason of termination is due to employer  arbitrary reasons or personals reasons than worker is must be given with compensation equals to one month salary.

Paragraph B: In case if worker completes its first three month of service and employer terminate him with no reason or due to any other legal excuse than worker will be given with compensation equals to wage of 2 days of each month OR minimum one month wage OR maximum 12 months wage totally relies on employer.

For Definite Labour Contract Holder:(Termination)

Paragraph C: In case the employer terminates or fired his worker in Definite Labour contract without any reason than employer must give his employee with compensation equals to wage of remaining period of the contract. Sometime both parties agrees on lesser compensation but still minimum three months compensation must be given or wage of remaining period whichever is decided by both parties.

Paragraph D: In case of Termination due to Work Performance:  If the employer terminates the labour contract concluded for the performance of a specific work for no reason or for an illegitimate reason, employer shall give the compensation to worker equal to wage of remaining period of labour contract. Sometime both parties agrees on lesser compensation but still minimum three months compensation must be given or wage of remaining period whichever is decided by both parties.

The above article is defined in terms for those who were terminated or fired by employer to reason or not any reason we shall discuss what compensation is given in case if employee successfully. completes its service.

Article 116:

For those employees  who don’t subject to provisions of the Social Insurance Law shall be given with compensation equals to the monthly half wage for each year of service if the contract is completed or terminated less than 3 years of service. In case the service exceed 3 years than compensation equals to each full wage of one month for each year of service will be given to employee. The worker
shall be entitled to a reward for the fraction of a year pro rata the period of service he spent with
the employer. 

Other Articles related to INDEMNITY is 104, 105, 115, 112

For example if an employee completes first 3 year of his employee and his salary of last month is 3500 bhd than he is entitled for 1250+1250+1250 of compensation. These figures can only be derived after calculations through formulas.
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These articles were complicated for normal persons in case you didn’t understand anything or your situation is different from above stated articles than must Comment below.

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49 comments

  1. Is it applicable to teachers?

  2. It is possible for me coz i finish 3years to my old employer… and she not give me any indemnity…
    Coz she said the indemnity is for 5years only

    • These laws are not for domestic workers may be you have a domestic worker visa thats why she didn’t give you compensation

  3. I am working In the salon for almost 21 years now with the same sponsor what indemnity should I get

  4. Hi can I ask question about my indemnity calculation if my salary basis is 466bhd how much total I get If I resign within 8 years . Thanks and good day.

    • 3,728 bhd
      as you completed 3 year and exceed to 8 years you get indemnity equal to full last wage for each year of your service.

  5. If the employee got terminated long time ago thus she still have a chance ti take her money rights to her old employer ? Let say 1 year ago.

  6. If I am getting 168bhd salary, how much I can get indemity if I am 3yrs in the company?

    • If you work less than 3 year you get 84 x 2 = 168
      Work for 3 year or more than full basic wage of per year service
      lets say if you work for 3 year than 504 indemnity

  7. My basic salary is now 151 bhd. I have finished almost 7 years. Aproximitly how much I can get my indemnity? Moreover I will resign after completing 7 years.
    Thanks & Regards

    • You worked for more than 3 year means you can get full basic wage of per year service
      Basic salary 151
      Years work 7
      so 151 x 7 equals to 1057

  8. Sir I worked with my single sponsor 6 years if I give resign how much indemnity I can get my basic salary is 140 BD Visa is restaurant

  9. I unerstand that the indemnity payable is on the total wages. Please explain.

    Also, if the employer terminate the contract after 25 years, is he eligible for both, indemnity as per clause 116 and compensation as per clause 111? Please explain?

  10. Jesusa S. Candia

    Mam/Sir, my contract is finish by February of this year to complete 4 years contract but I am terminated last December -3 ,2016. My basic salary is 315 bd + 150bd for housing allowance and 32 bd for food allowance . How much they should give me total amount of my indemnity? And one more question the company giving me a chance to find a job here . My question is How many months should company giving me a time to used my visa ?

    • As your service exceeds 3 years you can get indemnity of 4 year basic wage 315 x 4…
      Regarding job finding this relies on your visa validity see how much valid is your visa to stay in bahrain

  11. I am working 3 years in my company as a sale executive sadenly they force me to change my position as a greeter ang im not agree . Now the office said they will terminate me.

  12. Jesusa Luzano Laxamana

    Hi, it’s been a year and 4 months since I resigned from my first job here in Bahrain. When I resigned i was told that they will release my indemnity money as soon as I present to them my new visa and I did it in just 2 weeks but until now I’m not getting any amount from them and they keeps on ignoring my messages and i don’t even know how much I should get as they don’t want to tell me. I worked with them for almost 5 years and my last monthly salary was BHD200. What should I do and how much should I get?
    Thank you very much.

  13. I worked five years Sheraton bahrain hotel but I terminated and I didn’t got my any indemnity s per human resources I don’t have right to get any indemnity in case of termination. Kindly help me coz I loss huge amount of my hard work

    • How much time do you work their
      If you terminated within less than 3 months after staring job you don’t get any indemnity

  14. Salam sir I have work with my employer for five year…and have terminate my contract how indemnity will get from him please can u help me with that

  15. I just want to know if the employee If the employee works in percentage rate of salary thus he has a right to get indemnity and how much it will get?

  16. I just want to know If the employee works in percentage rate of salary thus he has a right to get indemnity and how much it will get?

  17. I cancelled my contract why my company, after working wth them for 2 yrs i did everything formally i sent cancellation on August, n stopped working on November because i was to go for vacation, until now am not been paid my salary since september, october, 2yrs leave n rest benefit n my ait ticket, i have pending case at court, its over a month now which my company thy never respond to even at court , what does the does government do to help such cases i can’t afford a lawyer , i need legal advice i need my benefit,can anyone help ?

  18. Chamila ranasingha

    I am working 5years and 2month one company.but one of employees have problems .but that problem put my head the company terminated me.in case how I can get my indemnity.my basic salary 105.+50elauns so how I can get that.please help me.my company say they not give my indemninty

  19. Chamila ranasingha

    I am working 5years and2month one company.but they terminated me that not my reason.ather employees do it that but company mananegment say they will terminated me .my salary there basic 105+50 elounse.so how I can get get my indemnity.please help me know about that

  20. Hi good day sir,
    Can i ask regarding indemnity for almost 1yr 1/2 it’s possible toget indemnity if i iam going to resign to my previous company now, which article that i can find that law, so that i can show to them.
    Looking forward to your reply,
    Thank you and have agoodday ahead.

  21. I’m working almost 8 years same boss but different different visa , if I want to go vacation I can get my indemnity ? Or I need to resign? If I resign how much I can get ?

  22. Hello… just want to ask how about if my contract is 2 yrs but my employer just give me 1yr visa, and now I want to resign after I finish my 1yr or at the end of my visa, can I still get any indemnity???what’s the calculation if this will happen??? Thank you very much…

  23. I am working as an engineer for 2 years and 6months already in a construction firm and my basic salary is 700bhd i finish my contract already for 2 years. If i am going to end my service now less than 3 years, how much indemnity i will get?

  24. Hello sir,
    I m working here in one coffee shop for last 5 year I will finish my contract at June 6th 2017 full 5 year in this situation what indemnity I should get??

  25. Good day ,
    Ma’am sir i just wanna ask im 2 years and 11month already in the company then i resigned my basic is 155bhd +60bhd allowance how much i will get indemnity ? Is it possible also to answer me coz my employer wants me to pay back to company coz i will resigned.

  26. Hi good morning..i would like to ask my basic salary on my 1st year was 168bd and then it increases to 200 until i reached my 3yrs it was increase to 257 bd. Now im almost 4yrs and i resigned…i dont know how they calculate my indemnity.please help me thank u

  27. how much will i get if my salary is 160 and work in the same company for 28 years.plesae help

  28. who completed 3 years of service, the employee will received half of his monthly salary multiply into 3 years, now my question is monthly salary means gross salary ( including housing and transport allowance) or only basic salary?

  29. I work in a company for 5 yrs
    Each contract every 2yrs they giving me one month salary indemnity equivalent of 145 bd becoz this my salary. In 4yrs I have only recieve 2 indents.
    In my 5th year I resign what I get only is one year compensation becoz this only I finish.
    Is this rigth?? Can I make complain to the LMRA for this??

  30. How about 500 salary and finished for 4 years?

  31. Hi im working since 2013 in a salon and i am almost 4 yrs and will be finish my visa this month.. my basic salary is 150.. how much is the computation of my indimity

  32. Hi

    My company is deducting 1% of my full salary everymonth and saying that is GOSI contribution. Is it deduct from staffs Salaries or compnay is the one should pay?. For expatriates also they are deducting the same amount every month salary.

    Our compnay is under dubai management but CR is under on local bahraini sponsor.

    So please let me know is the deduction is from employees salary or by employer ?.

    How to stop this .

    Thanks

  33. Social Insurance

    All foreign and local staff are required to be
    registered with the General Organization for
    Social Insurance (GOSI). GOSI contributions
    are as follows:

    For Bahraini employees: Employer pays 10%of basic salary and recurring constantallowances, employee pays 5% of basic salaryand constant allowances
    For expatriate employees: Employer pays 3%of basic salary and recurring constantallowance

    @For more information please contact theInsurance Contribution & Statistics Directorateat GOSI at Tel: (+973) 17532222; Website:http://www.gosi.org.bh

  34. It’s only for companies compensation,
    How about house worker?

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