Who pays your gratuity in Bahrain now — employer or SIO?
This is the single most important thing to understand about Bahrain end-of-service today, and it changed on 1 March 2024. Under Edict 109 of 2023, employers no longer hold your gratuity and hand it over as a lump sum when you leave. Instead they pay a monthly contribution to the Social Insurance Organisation (SIO), and when your employment ends you claim your entitlement from the SIO, not from your employer.
Bahrain end-of-service for non-Bahrainis: before and after 1 March 2024| Service period | Who pays you | How it accrues |
|---|
| Up to 29 Feb 2024 | Your employer, at the end of your service | Old Labour Law formula: half a month's wage a year for the first 3 years, then one month a year |
|---|
| From 1 Mar 2024 | The SIO, when you claim after leaving | Employer contributes monthly: 4.2% of wage for the first 3 years of service, 8.4% after |
|---|
If you were already employed on 1 March 2024, your service is effectively in two parts. Everything up to 29 February 2024 remains your employer's liability and is settled under the old Labour Law formula when you leave. Everything from 1 March 2024 is funded through SIO contributions and claimed from the SIO. Anyone who already had more than three years of service on 1 March 2024 was moved straight to the higher 8.4% rate.
Does the SIO scheme change how much you get?
Not materially — the change is about who holds the money, not how fast it builds up. A 4.2% monthly contribution across twelve months comes to just over half a month's wage a year, and 8.4% comes to just over a full month's wage a year, which mirrors the old half-month and one-month accrual rates. The estimate this calculator produces therefore remains a sound guide to the total you should expect.
Two practical points. Your actual SIO balance tracks the wage your employer declared each month, so if your salary changed over time the accrued figure reflects those actual months rather than only your final salary. And because the SIO now holds the funds, your entitlement is protected if your employer runs into financial trouble — one of the main reasons the scheme was introduced. Contribution rates were unchanged in the January 2026 social-insurance update.
