Bahrain Indemnity Calculator
Inclusive Period (Labor Law)
About the Bahrain Indemnity Calculator – Why and How to Use It
If you search for an Indemnity Law & Calculator in Bahrain, then Boston Brooks is one of the best resources available to you. Calculating indemnity is an important task for both employers and employees, and our calculator has been designed to make the process easier and more accurate. To use the calculator, you simply need to enter three key pieces of information: your last basic monthly salary (including any social allowance, if applicable), your date of joining, and your last working day. With these details, the calculator will generate an estimated indemnity amount in line with Bahrain’s labor laws.
We created this tool because calculation of indemnity is something followers ask about repeatedly. It is one of the most common HR-related queries in Bahrain, and many times, mistakes in manual calculations have caused disputes. This online calculator offers a quick solution. However, while we have tried our best to ensure accuracy and reliability, it is important to note that sometimes due to technical issues or specific contract clauses, figures may vary. Please use this tool at your own discretion, as Boston Brooks will not be held responsible for any discrepancies.
Understanding Indemnity Under Bahrain Labor Law
Indemnity, also known as gratuity, is essentially a parting gift or end-of-service benefit for employees. It is promised to all employees covered under Bahrain Labor Law, subject to certain rules and restrictions. Unfortunately, in many cases, indemnity is not calculated properly. Some employees may not receive their rightful amount, while in other cases, companies end up overpaying. Overpayment may be tolerated by employees, but underpayment can lead to serious consequences such as legal disputes, court cases, and additional costs for employers.
To avoid these issues, it is crucial that both employers and employees understand the correct calculation method. According to Bahrain Labor Law:
- Indemnity is paid to all private sector employees not covered under the Social Insurance Law.
- It is calculated based on the most recent basic pay.
- It is calculated on a pro-rata basis (years, months, and days).
- For the first three years, the employee is entitled to half a month’s salary per year.
- From the fourth year onwards, the employee is entitled to a full month’s salary per year.
Examples of Indemnity Calculation
Case 1 (Complete Years of Service):
An employee earns a monthly salary of BD 500 and his contract ends after 5 years.
- First year = Half month salary = BD 250
- Second year = Half month salary = BD 250
- Third year = Half month salary = BD 250
- Fourth year = Full month salary = BD 500
- Fifth year = Full month salary = BD 500
✅ Total Indemnity = BD 1,750
Case 2 (Partial Service with Months & Days):
An employee earns a monthly salary of BD 380 and his contract ends after 4 years, 3 months, and 11 days.
- First year = Half month salary = BD 190
- Second year = Half month salary = BD 190
- Third year = Half month salary = BD 190
- Fourth year = Full month salary = BD 380
- Extra 3 months + 11 days = 380 ÷ 365 × 101 days = BD 105.150
✅ Total Indemnity = BD 1,055.150
Final Note
The Bahrain Indemnity Calculator has been built to help simplify this process and minimize errors. It is especially useful for HR professionals, employers, and employees who want a quick estimate of indemnity based on Bahrain’s labor laws. By entering just three fields—salary, joining date, and last working date—you can get a detailed breakdown of years, months, days, and the total payable indemnity.
Use this calculator as a guideline tool to ensure transparency and fairness in end-of-service benefits.