Taxes on salaries in Bahrain 2026

Is there tax on salaries in Bahrain?

No. Bahrain has no income tax on individual salaries in 2026, for Bahrainis or expats. Every deduction from pay is a social insurance contribution that goes to the Social Insurance Organisation.

Bahrain also has no general income tax on companies. The exceptions are the oil and gas sector and the domestic minimum top-up tax on large multinational groups.

What is the social insurance rate for Bahrainis in 2026?

A Bahraini employee in the private sector has 7% deducted for old-age, disability and death insurance and 1% for unemployment insurance, 8% of monthly pay in total.

The employer's pension share is rising step by step under Law No. 14 of 2022: it started at 11% when the law took effect in 2022 and rises by 1% a year, so it is 15% in 2026 and will reach 17% in January 2028. Another 3% is added for work injuries. The employer's 1% unemployment share is paid by the Labour Fund for private sector employees.

How much is deducted from an expat's salary in Bahrain?

Expats pay only 1% of their pay for unemployment insurance, which applies to Bahrainis and non-Bahrainis alike. The employer pays 3% for work injuries on the expat's behalf.

Since 1 March 2024 the employer has also paid a monthly end-of-service gratuity contribution to the Social Insurance Organisation: 4.2% of pay for each of the first 3 years of service and 8.4% for the years after. This contribution is paid by the employer and is not deducted from your salary.

How do I calculate end-of-service gratuity in Bahrain?

Article 116 of Labour Law No. 36 of 2012 says a worker not covered by the Social Insurance Law, which in practice means an expat, is entitled to half a month's pay for each of the first 3 years and a month's pay for each year after that, with part years counted. It is calculated on the last basic pay plus social allowance if there is one, without other allowances.

Example: basic pay of 800 dinars and 6 years of service: 3 × 400 = 1,200 dinars, then 3 × 800 = 2,400, so 3,600 dinars in total. The law does not reduce the gratuity if you resign.

What is new since March 2024 is that the Social Insurance Organisation pays the gratuity as a lump sum, within 5 working days of an online application, and it moves with you if you change employer. For service before March 2024, you claim from the employer directly.

Do Bahrainis get an end-of-service gratuity?

Bahrainis are not entitled to the Article 116 gratuity, because it is meant for workers not covered by the Social Insurance Law. Instead, a Bahraini receives a pension or a lump-sum payment from the Social Insurance Organisation, depending on how long they have contributed.

VAT and the tax on large companies

VAT in Bahrain is 10%, run by the National Bureau for Revenue, with a zero rate for some basic goods and specified services.

Under Decree-Law No. 11 of 2024, since 1 January 2025 Bahrain has applied a 15% domestic minimum top-up tax to multinational groups with global revenue of 750 million euros or more. This tax does not affect individuals or small companies.

Freelancing in Bahrain

There is no income tax on individuals' profits from self-employment. But you may have to register for VAT if your supplies pass the mandatory registration threshold. A self-employed Bahraini can join the Social Insurance Organisation's voluntary insurance.

Practical tips for employees in Bahrain

If you are an expat, add your bank account on the Social Insurance Organisation website early, because it is required before your end-of-service gratuity can be paid. Check that the basic pay in your contract is clear, because the gratuity is based on it.

If you are Bahraini, keep an eye on your contribution statement with the organisation, because since the 2022 amendments your pension is calculated on your average pay over the last 5 years.

What changed in 2026?

• The employer's share of old-age, disability and death insurance for Bahrainis rose to 15% in January 2026, part of the 1% yearly increase under Law No. 14 of 2022 up to 17% in 2028. The employee's share stays at 7%.
• No change to the expat contribution (1% for unemployment) or to the end-of-service gratuity contribution paid by the employer (4.2%, then 8.4%).
• There is no income tax on salaries in 2026.

For expats

For expats in Bahrain: the only deduction from your salary is 1% for unemployment insurance, and your end-of-service gratuity is now safer, because since March 2024 the employer deposits it every month with the Social Insurance Organisation, so it is not lost if the company runs into trouble. Money you send home is not subject to Bahraini tax. Because Bahrain does not tax salaries, you will not usually need a double tax treaty for your pay, and you can ask the National Bureau for Revenue for a tax residency certificate if your home country needs one.

Income tax rates

Bahrain does not tax employees' salaries in 2026. The only possible deduction is a social insurance or pension contribution, which can differ between nationals and expats.

Other taxes that matter in Bahrain

Capital gains

Bahrain has no personal income tax and no capital gains tax, so individuals pay no tax on gains from selling listed or unlisted shares or property. The domestic minimum top-up tax run by the National Bureau for Revenue concerns large multinational groups and does not reach individuals.

Dividends

No tax is withheld from dividends received by a resident individual, because Bahrain has no personal income tax and no withholding tax.

Crypto

Crypto-asset services are regulated and allowed under a Central Bank of Bahrain licence, under the Crypto-Asset (CRA) module in Volume 6 of the bank's rulebook, and may not be offered without a licence. No tax applies to individuals' crypto gains, because there is no personal income tax.

Inheritance

Bahrain has no inheritance, estate or gift tax. Muslims' estates follow Islamic inheritance rules before the Sharia courts, and Family Law No. 19 of 2017 refers inheritance and wills to the school the deceased followed, Sunni or Jaafari.

Property and wealth

There is no annual property tax and no wealth tax. When a property sale is registered, the Survey and Land Registration Bureau charges a fee of 2% of the property value, reduced to 1.7% if registration is requested within 60 days of the sale contract being notarised. There are also municipal fees on occupied properties; we have not confirmed their rates from an official source.

Tax residency

Bahrain has no general tax residence test for individuals, because there is no personal income tax. For a tax residency certificate, the National Bureau for Revenue requires the individual to have been physically present in Bahrain for at least 183 days in the year requested, and checks this with Nationality, Passports and Residence Affairs. The Foreign Tax Relations directorate at the National Bureau for Revenue issues certificates of residence for tax purposes on a formal request that explains the purpose and names the tax treaty article or foreign law relied on. Attach certified copies of your ID card, passport, residence permit for non-Bahrainis and proof of address, and send the request to [email protected].

Retirement and pensions

Local and foreign pensions are not taxed in Bahrain, because there is no personal income tax. The Golden Residency is available for 10 years to foreign retirees with a pension of at least 4,000 Bahraini dinars; the fee is 300 dinars plus a 5 dinar application fee. We found no dedicated remote work visa in official sources.

Cost to the employer

For a Bahraini employee in 2026, the employer pays 15% for old-age, disability and death insurance, a rate that rises by 1% a year until it reaches 17% under Law No. 14 of 2022, plus 3% for work injury insurance, 18% in total. The employee pays 7% for pension and 1% for unemployment insurance, and the Labour Fund covers the employer's unemployment share in the private sector. For an expat, the employer pays 3% for work injuries and an end-of-service gratuity contribution to the Social Insurance Organisation of 4.2% of pay in the first three years and 8.4% after that, and the employee pays 1% for unemployment. The cap on pay subject to contributions is 4,000 dinars a month according to secondary summaries; we could not confirm it from an official source.

Social insurance

Sources

1. Law No. 14 of 2022 amending the Social Insurance Law (Article 33 and the fourth transitional article), Legislation and Legal Opinion Commission Official source · checked 2 October 2026
2. SIO: optional insurance FAQ (21%, rising by 1% a year to 24% in January 2028) Official source · checked 2 October 2026
3. Social Insurance Law issued by Legislative Decree No. 24 of 1976 (Article 47: employment injury 3%) Official source · checked 2 October 2026
4. Law No. 78 of 2006 on unemployment insurance (Article 6) Official source · checked 2 October 2026
5. SIO: end-of-service gratuity for non-Bahrainis (4.2% and 8.4%, since 1 March 2024) Official source · checked 2 October 2026
6. Labour Law for the Private Sector No. 36 of 2012 (Article 116) Official source · checked 2 October 2026
7. NBR: Domestic Minimum Top-up Tax (Decree-Law No. 11 of 2024, from 1 January 2025) Official source · checked 2 October 2026
8. NBR: VAT calculator, 10% Official source · checked 2 October 2026
9. PwC Worldwide Tax Summaries: Bahrain, contributions of 18% and 8% for nationals and 3% and 1% for expats, reviewed 26 July 2026 (secondary source, used as a cross-check) Secondary source used to cross-check · checked 2 October 2026