Bahrain introduces end of service benefits for foreigners, Taminat system, and separate unemployment insurance.

The social insurance organization (SIO) of Bahrain announced through circular no. (2) of 2024 a new electronic system “Taminat”. The procedure of accessing the new system is updated in the circular.

The SIO also announced separating the monthly insurance contributions bill from the unemployment insurance contributions bill, starting from January 2024, to enable the Employer to review their obligations and payments in an accurate manner.

Prime minister’s decision no. (109) of 2023 and circular no. (3) of 2024 introduces an end of service indemnity system for non-Bahraini’s working in the private sector. The employer is obligated to share the salary data and any increase if any, matching with the employee’s employment contract. If not submitted, the calculation shall be based on monthly salary submitted for the work injury insurance contributions.

The monthly percentages to be collected by the SIO for the end-of-service benefits will be as follows:

• 4.2% per month in the first three years of employment (0-3 years); i.e., half a month’s wage per year
• 8.4% per month for each subsequent year of employment (3+ years); i.e., one month’s wage per year

The SIO will provide a separate monthly invoice for this from March 2024. The payment will be done electronically through SIO’s website.

Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above change