Bahrain leaving indemnity calculator
What Article 116 owes you, and where the money has been kept since March 2024.
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- Sources cited
- Last reviewed: September 2026
Art. 116 says wage rather than basic wage, so regular allowances count. Check which elements the Ministry treats as wage for this purpose.
Monthly wage used in the calculation: 1,000.00 BHD
Art. 116: paid in full
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Leaving indemnity due
5,500.00 BHD
On a monthly wage of 1,000.00 BHD over 7 years
Breakdown
| Period | Years | Amount |
|---|---|---|
| First 3 yearsHalf a month's wage a year | 3 | 1,500.00 |
| After 3 yearsA month's wage a year | 4 | 4,000.00 |
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 wage including regular allowances, not the basic alone
- the two bands
- They accumulate: five years is 1.5 months + 2 months = 3.5 months
- resignation
- Takes nothing off; only dismissal under Art. 107 forfeits it
What is five years on 800 dinars worth?
An expatriate worker on 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?
Enter your monthly 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. It covers workers not subject to the Social Insurance Law: expatriates, and Bahrainis whose wage is above the insurance ceiling.
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. And the article says wage rather than basic wage, so regular allowances go into the figure, unlike the UAE and Oman, where only the basic wage counts.
Resignation does not reduce it. The article attaches the entitlement to the contract ending and does not ask who ended it. The only case that forfeits the indemnity is dismissal under Article 107.
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
- Calculated on the wage including regular allowances, not the basic alone
- Resignation does not reduce it; dismissal under Art. 107 forfeits it
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.
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?
The article says wage without limiting it to the basic, so regular allowances such as housing and transport go into the figure. That differs from the UAE and Oman, where only the basic wage counts, and the gap between the two bases can be a third of the total. Check your payslip and what the Ministry treats as wage.
Sources
Reviewed September 2026- 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 107 of the Labour Law: the dismissal cases in which the indemnity is forfeited. The article number is awaiting a check
- 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 107: dismissal without indemnity
Bahrain Labour Law for the Private Sector: Law No. 36 of 2012, as amended