Bahrain Pension Guide 2026

Bahrain's pension system includes the SIO old-age pension for nationals (retirement age 60), the end-of-service gratuity for expatriates, and the Sandeel unemployment insurance scheme. Voluntary contributions are available for self-employed individuals.

SIO Old-Age Pension

Bahraini nationals qualify for an old-age pension from the Social Insurance Organization (SIO) upon reaching age 60 with at least 20 years (240 months) of contributions. The pension is calculated as a percentage of the average monthly salary during the last 5 years, capped at BHD 4,000/month.

Contribution Requirements

Employee contributes: 6% of salary (up to BHD 4,000/month)
Employer contributes: 12% of salary (up to BHD 4,000/month)
Total SIO: 18%
Minimum qualifying period: 20 years (240 months)

End-of-Service Gratuity (Expatriates)

Expatriate employees are not covered by SIO. Instead, the Bahrain Labour Law requires employers to pay an end-of-service gratuity upon termination or resignation:

Less than 3 years: No gratuity
3–5 years: 2 weeks' salary per year
5–10 years: 3 weeks' salary per year
10+ years: 4 weeks' salary per year

The gratuity is calculated on the last basic salary (excluding allowances) and is capped at one year's salary for employees who resign (uncapped for termination).

Unemployment Insurance (Sandeel)

The Sandeel scheme provides unemployment benefits to Bahraini nationals who lose their jobs involuntarily. Benefits are up to 60% of salary for a maximum of 9 months. Funding comes from a 1% employee contribution matched by the government.

Voluntary Pension Contributions

Self-employed Bahraini nationals and those working abroad can make voluntary SIO contributions at 18% of declared income (up to BHD 4,000/month) to build pension entitlement.

Key Facts

Retirement age: 60
Minimum contributions: 20 years (240 months)
SIO contribution cap: BHD 4,000/month
Expat end-of-service: 2–4 weeks/year after 3 years
Unemployment benefit: Up to 60% for 9 months
Voluntary contribution rate: 18%