Bahrain Labour Law, Article 116: leaving indemnity
What Article 116 owes you, and where the money has been kept since March 2024.
Enter your monthly basic wage and how long you have worked. Article 116 gives half a month's wage for each of the first three years and a month's wage for each year after that, with part years counted in proportion, and Article 47 puts it on the last basic wage plus the social allowance. It covers workers not subject to the Social Insurance Law: expatriates, and Bahrainis whose wage is above the insurance ceiling.
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How is the Bahrain leaving indemnity calculated?
- First 3 years = half a month's wage a year
- After 3 years = a month's wage a year
- A part year counts in proportion
- Indemnity = the two bands added, × the monthly wage
Symbols
- wage
- The last basic wage plus the social allowance, if any (Art. 47)
- the two bands
- They accumulate: five years is 1.5 months + 2 months = 3.5 months
- resignation
- Takes nothing off: no article of the law reduces the indemnity on resignation
What is five years on 800 dinars worth?
An expatriate worker on a basic wage of 800 dinars a month, five complete years, contract ended:
- First three years: 3 × half a month = 1.5 months
- The next two years: 2 × a month = 2 months
- Total: 3.5 months of wage
- 3.5 × 800 = 2,800 dinars
- Resigning would have given the same figure, because the article does not distinguish
2,800 dinars is due. If the service runs past March 2024, part of that is a balance with the Social Insurance Organisation to be claimed from them, rather than a lump sum the employer pays.
What changed in March 2024?
Article 116 splits service into two bands: half a month's wage a year for the first three years, and a full month a year after that. They accumulate rather than replace one another, so five years is half a month × 3 plus a month × 2.
Part years count in proportion, so nothing has to be completed before the entitlement starts. The wage comes from Article 47: the indemnity is worked out on the last basic wage plus the social allowance, if there is one, so housing, transport and other allowances stay outside it, as they do in the UAE and Oman. If you receive a social allowance, add it to the basic wage.
Resignation does not reduce it. The article attaches the entitlement to the contract ending without asking who ended it, and no other article cuts it back when the worker is the one who leaves. Dismissal under Article 107 comes without notice or compensation, but in the law's Arabic text the indemnity is an award, a different word from that compensation, and no article takes it away, so the calculator pays it in full. Whether the courts read Article 107 as reaching the indemnity is a question for a lawyer, and this page marks it as awaiting review.
What changed on 1 March 2024 is not the amount but who holds it: an employer now pays a monthly contribution to the Social Insurance Organisation for an expatriate worker, and the indemnity is claimed from the SIO rather than paid out by the employer. The reported rates annualise to almost exactly the Article 116 bands, so the accrual is much the same, but a contribution is calculated on the wage at the time it was paid, not on the final wage, so anyone whose pay rose will have a smaller balance than the figure shown here.
- Half a month's wage a year for the first three years
- A month's wage a year after the third
- Part years in proportion, with no minimum before it starts
- Worked out on the last basic wage plus the social allowance (Art. 47), without other allowances
- Resignation does not reduce it, and no article takes it away on dismissal under Art. 107
The same calculation in other Gulf countries
| Country | Wage basis | Rate | On resignation | |
|---|---|---|---|---|
 Saudi ArabiaSaudi Labor Law, Article 84: end-of-service award | Basic plus fixed allowances | half a month's wage for the first 5 years, then a month's wage | Reduced by length of service | End-of-service gratuity, Saudi Arabia |
 UAEUAE Federal Decree-Law No. 33 of 2021, Article 51: end-of-service benefits | Basic wage only | 21 days of wage for the first 5 years, then 30 days of wage, capped at 24 months of wage, from 1 year of service | No reduction | End-of-service gratuity, UAE |
 QatarQatar Labour Law No. 14 of 2004, Article 54: end-of-service gratuity | Basic wage only | 21 days of wage for every year, from 1 year of service | No reduction | End-of-service gratuity, Qatar |
 KuwaitKuwait Labour Law No. 6 of 2010, Article 51: end-of-service indemnity | Basic plus fixed allowances | half a month's wage for the first 5 years, then a month's wage, capped at 18 months of wage | Reduced by length of service | End-of-service indemnity, Kuwait |
 OmanOman Labour Law, Article 61: end-of-service gratuity | Basic wage only | a month's wage for every year, the rule in force now | No reduction | End-of-service gratuity, Oman |
 BahrainBahrain Labour Law, Article 116: leaving indemnity | Basic wage only | half a month's wage for the first 3 years, then a month's wage | No reduction | This page |
Questions about the Bahrain leaving indemnity
Is the indemnity reduced if I resign?
No. Article 116 attaches the entitlement to the contract ending and does not ask who ended it, so someone who resigns and someone whose contract is terminated get the same rate: half a month a year for the first three years, a month a year after. That differs from Saudi Arabia and Kuwait, where a resigning worker drops onto a ladder that pays less for shorter service.
Is the indemnity lost on dismissal under Article 107?
The law does not say so. Article 107 lets the employer dismiss without notice or compensation in the cases it lists. But in the Arabic text compensation is the word for the notice payment of Article 99 and the payment of Article 111, while the Article 116 indemnity is called an award, and Article 47 lists the two as separate rights. No article takes the indemnity away, so the calculator pays it in full. How the courts read Article 107 is a question for a lawyer, and this rule is marked as awaiting review.
Who does this cover, and who does it not?
Article 116 covers workers not subject to the Social Insurance Law: expatriates, and Bahrainis whose wage is above the insurance ceiling. A Bahraini inside the insurance scheme has their pension and end of service dealt with under that law instead of under this article.
What changed in March 2024?
From 1 March 2024 an employer pays a monthly contribution to the Social Insurance Organisation for an expatriate worker rather than holding the indemnity until the end of service, and it is claimed from the SIO. The annualised contribution comes to almost exactly the Article 116 bands, so the amount has not changed much; who pays it out has.
Why might my SIO balance be less than the figure shown here?
Because a monthly contribution is calculated on your wage in the month it was paid, while this calculator multiplies the Article 116 rate by your current wage. If your pay never moved the two figures are close. If it rose during your service the real balance will be lower, because the early years were paid on a smaller wage.
Do part years count?
Yes. The article gives the fraction of a year in proportion to the period served, so three years and seven months is half a month × 3 plus seven months at the full-month rate. There is no minimum period to complete before the entitlement starts.
Do allowances count towards it?
Only a social allowance. Article 47 works the indemnity out on the last basic wage plus the social allowance, if there is one, so housing, transport and other allowances stay outside it, as they do in the UAE and Oman. The same article puts the leave balance and notice compensation on that wage. For piece, production or commission pay it takes the average wage of the last three months instead, which this calculator does not work out.
Sources
Under reviewReviewed September 2026One figure on this page is applied the way the authority applies it; the article's own wording is still being read.
Still being checked: whether dismissal for cause removes the award
- Law No. 36 of 2012 issuing the Labour Law for the Private Sector (Arabic): Legislation and Legal Opinion Commission
- Article 116 of the Bahrain Labour Law for the Private Sector (Law No. 36 of 2012): half a month's wage for each of the first three years and a month's wage for each subsequent year, with the fraction of a year pro rata
- Article 116 applies to workers not subject to the Social Insurance Law: expatriates, and Bahrainis whose wage is above the insurance ceiling
- Article 47 of the Labour Law: the indemnity, the leave balance and notice compensation are worked out on the last basic wage plus the social allowance, if any
- Article 107 of the Labour Law: dismissal without notice or compensation. It does not name the Article 116 indemnity; how the courts read it is awaiting review
- From 1 March 2024 an expatriate's end of service is funded by monthly contributions to the Social Insurance Organisation and claimed from it. The contribution rates and the treatment of earlier service are awaiting a check against the SIO's own rules
Statutory articles this calculator applies
- Bahrain Labour Law, Article 116: leaving indemnity
- Bahrain Labour Law, Article 47: the wage for the indemnity, leave balance and notice
- Bahrain Labour Law, Article 107: dismissal without notice or compensation
Bahrain Labour Law for the Private Sector: Law No. 36 of 2012, as amended