The government of Bahrain introduced Law No. (14) of 2022, which amends several provisions of the social insurance program including raising social security contribution rates, revising the old-age pension benefit formula, increasing the normal retirement age for women, and revising the payment method of the end-of-service benefits. The new Social Insurance Law was passed and published in the Bahraini Official Gazette on 18 April 2022. However, implementing regulations are still expected to be issued at a later date (still yet to be determined).


The Social Insurance Organization (SIO) is the authority responsible for providing social insurance services to all covered individuals.

Social insurance is mandatory in Bahrain for all Bahraini nationals. Expatriates do not benefit from social security and are covered by SIO only for work injury benefits and unemployment cover. Instead of a retirement pension, the Bahraini labor law makes it compulsory for expatriates to be paid a statutory end-of-service gratuity.

Key details

The new legislation, which aims to improve the long-term sustainability of the Kingdom’s social insurance pension program, introduced the following changes.

Increase in contribution rates

The employer contribution rate for social security for retirement, survivor’s and disability pension will increase yearly to a total of 20% of an employee’s salary (up to BHD 4,000 per month) by 1 January 2028.

The employer’s contribution increased by 2% in May 2022, from 12% to 14%. The employer’s contribution rate will continue to increase by 1% at the start of each year from 1 January 2023 to 1 January 2028.

The employee contribution rate will also increase on 1 January 2023 by 1%, from 7% to 8% of the employee’s salary (up to BHD 4,000 per month), and will remain at this rate.

Increase of Normal Retirement Age (NRA) for women

The NRA for women increases from age 55 to age 60.

Revision of old-age pension calculation

Old-age pension amounts will be calculated based on the average monthly earnings from the last five years of contributions before retirement, instead of the current last two years. In addition, in order to collect a full pension at NRA, the minimum period of insured employment increases from 180 months to 240 months.

Individuals who defer claiming an old-age pension by up to five years after NRA will receive a pension of up to a maximum of 90% of earnings based on the average monthly earnings of the last five years of contributions (previously the maximum old-age pension was 80% of earnings based on the average monthly earnings of the last two years of contributions).

Old-age pensions will no longer be automatically increased annually but any increase will instead be dependent on the social security fund having a surplus. Previously, pensions were automatically increased by 3% every year. However, the increases were suspended in 2020 and 2021 due to the pandemic. Because of such suspension, the new legislation increased monthly old-age pensions with an additional payment of BHD 60 per month, effective retroactively to 1 January 2021.

End-of-service gratuity

Employers are now required to deposit the funds necessary to fund the employer-paid end-of-service gratuity into the SIO. Therefore, the SIO will then pay the end-of-service gratuity to employees upon termination. Implementing regulations are expected to be passed to clarify this new process.

The new legislation does not introduce any changes regarding the benefit calculation of the end-of-service gratuity, which is calculated based on the employee’s last salary and length of service.

Next steps

Employers should take steps to comply with the new legislation and any upcoming implementing regulations by amending their human resource policies and practices, employment agreements, and social insurance pension-related benefits and policies as needed.