Aqid ERPMeaning
The leaving indemnity (مكافأة نهاية الخدمة) is what an expatriate worker in Bahrain's private sector is owed when the contract ends. Since 1 March 2024 the employer no longer saves it up: it pays a monthly contribution to the Social Insurance Organization, 4.2% of the wage for the first three years of service and 8.4% after, on the basic wage plus any social allowance, with nothing deducted from the worker, and the SIO pays the worker on leaving.
Service before 1 March 2024 stays the employer's to pay itself under article 116 of the Labour Law: half a month's wage for each of the first three years and a month's wage for each year after, at the last wage. Bahraini employees earn no indemnity; they are covered by the SIO's pension instead.
Also called: end of service indemnity Bahrain · end-of-service gratuity Bahrain · SIO indemnity
Example
An expatriate on a basic wage of BHD 800.000 with two years' service since March 2024: the employer pays the SIO BHD 33.600 a month for him. His four years before March 2024 are the employer's own debt: 3 × 400.000 + 800.000 = BHD 2,000.000 when he leaves.