HR software in Manama for small businesses
In Bahrain you deal with three bodies: the Labour Market Regulatory Authority (LMRA) for work permits and the Wage Protection System, the Ministry of Labour for the private sector Labour Law, and the Social Insurance Organization (SIO), which since March 2024 collects monthly end of service contributions for expatriates. HR FLARE keeps people, leave and BHD payroll together.
How is expatriate end of service paid in Bahrain since 2024?
Since 1 March 2024, the employer pays a monthly contribution to SIO for each non-Bahraini employee: 4.2% of monthly salary for each of the first three years and 8.4% after that. For service before that date, the employer still pays the gratuity directly to the employee.
Who regulates employment in Manama?
Each body owns a clear part of the employee lifecycle.
| Body | Responsible for | What it means for you |
|---|---|---|
| LMRA | Expatriate work permits and the Wage Protection System | Salaries go into employees' accounts at banks and payment providers linked to the system |
| Ministry of Labour | Private sector Labour Law No. 36 of 2012 and inspections | Working hours, leave and the midday ban |
| Social Insurance Organization (SIO) | Social insurance for Bahrainis, and end of service contributions for expatriates | Payment within the first 15 days of each month |
Bahrain also has its own Personal Data Protection Law, Law No. 30 of 2018. HR FLARE hosts data in Europe.
Expatriate end of service through SIO
Edict No. 109 of 2023 requires private sector employers to fund expatriate end of service gratuity through SIO. The contribution is 4.2% of monthly salary for each of the first three years and 8.4% for each year after, and anyone with more than three years' service on 1 March 2024 goes straight to the higher rate.
Contributions are due within the first 15 days of each month. Late payment adds interest of 5% of the delayed contributions, and non-payment a penalty of 20% of the unpaid amount. HR FLARE does not calculate these contributions, so record them in payroll as SIO bills them.
The Wage Protection System
LMRA rolled out WPS in phases by company size: 500 or more workers first, then 50 to 499, then companies with 49 or fewer from January 2022. The system is linked to the Central Bank of Bahrain, banks and payment service providers. LMRA is also introducing a mandatory enhanced version, with implementation extended to the first quarter of 2026.
Hours, leave and holidays
Working hours are at most 48 a week, and in Ramadan six hours a day and 36 a week for Muslim employees. Annual leave is 30 days after a year of service. The usual weekend is Friday and Saturday.
Bahrain's public holidays include Labour Day on 1 May, two days of Ashura on 9 and 10 Muharram, National Day on 16 December and Accession Day on 17 December, plus both Eids, Hijri New Year and the Prophet's Birthday. In 2026, outdoor work in direct sunlight was banned from noon to 4 pm, from 15 June to 31 August, under Resolution No. 5 of 2026.
Typical HR tasks in Manama
- Registering expatriate salaries on the SIO portal and paying the contribution before the 15th of each month.
- Keeping the gratuity for service before 1 March 2024 separate, since the employer pays it directly.
- Paying salaries through the Wage Protection System.
- Adding both Ashura days to the holiday calendar and adjusting them after the Muharram moon sighting.
- Moving outdoor work outside the summer ban hours.
How HR FLARE helps in Manama
Real capabilities in the product today. The free plan covers up to 5 employees.
Payroll in BHD
Gross, deductions, net and payslips in BHD, with a full record of every run.
Public holidays
Islamic holidays are pre-computed from the Umm al-Qura calendar, and you shift any date to match the official announcement in Bahrain.
Configurable weekend
Friday and Saturday or any days your company uses, and leave is counted on that basis.
Hijri dates
Dates show in Hijri next to Gregorian, which makes Ramadan and Eid planning easier.
Arabic and English
A full right to left Arabic interface, and every user picks their own language.
AI assistant and MCP
Ask about your team in your language, or connect HR FLARE to Claude or ChatGPT over MCP.
What HR FLARE does not do
- No SIO calculation: contributions for Bahrainis and expatriate end of service contributions are calculated and paid through SIO.
- No LMRA connection: permits and wage protection go through LMRA and your bank; HR FLARE does not transfer salaries.
- Data location: data is hosted in Europe; in-country hosting is not available.
Frequently asked questions
Who runs the Wage Protection System in Bahrain?
Is Ashura a public holiday in Bahrain?
When was the midday work ban in Bahrain in 2026?
What about gratuity for service before March 2024?
Does HR FLARE calculate SIO contributions?
Sources
- LMRA blog: Wage Protection System
- Lockton: Bahrain implements new end of service gratuity for expatriates
- Mondaq: Changes to the end of service gratuity system for foreign employees
- EY: Bahrain extends the enhanced WPS timeline in 2026
- PwC: Bahrain Wage Protection System implementation update (PDF)
- DLA Piper: 2026 summer midday outdoor work ban in Bahrain
- Migrant-Rights: Bahrain Labour Law summary (PDF)
- Wego: Bahrain public holidays 2026
Last reviewed 30 September 2026. This page is general information, not legal advice: always confirm with the official authority.
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