Payroll & WPS in Bahrain
Payroll in Bahrain is regulated at two levels: what you pay and how you pay it. SIO contributions are 15% employer and 8% employee for Bahrainis, and 3% employer plus 1% employee for expatriates, with the Wage Protection System mandatory for all private-sector employers. Salary files are matched against labour and social-insurance records, so a payroll that balances internally can still fail if the file format or the contract data behind it is wrong. DocMakBooks produces Bahrain WPS file lodged through LMRA-linked bank channels alongside the accounting entries.
How to set up payroll & wps in Bahrain
- 1Load employee master data — contract type, basic pay, allowances, nationality and social-insurance status.
- 2Configure statutory deductions: sio contributions are 15% employer and 8% employee for bahrainis, and 3% employer plus 1% employee for expatriates, with the wage protection system mandatory for all private-sector employers.
- 3Run the payroll, review the variance report against last month, then approve.
- 4Generate the salary file — Bahrain WPS file lodged through LMRA-linked bank channels — and upload it through your bank.
- 5Post the payroll journal, accrue leave and end-of-service, and keep the payslips retrievable for the statutory period.
Payroll & WPS document requirements in Bahrain
- Arabic is required, with English accepted as an additional language
- Show the VAT account number issued by the NBR
- Amounts in BHD to three decimal places, with the exchange rate for foreign-currency invoices
- Zero-rated supplies such as basic food, education, healthcare, oil and gas must be clearly flagged
SIO contributions are 15% employer and 8% employee for Bahrainis, and 3% employer plus 1% employee for expatriates, with the Wage Protection System mandatory for all private-sector employers. Salary files are produced as Bahrain WPS file lodged through LMRA-linked bank channels, and payments reconcile against statements from National Bank of Bahrain, Bank of Bahrain and Kuwait, Ahli United Bank, Bahrain Islamic Bank.
Payroll & WPS mistakes that cost money in Bahrain
- Paying salaries outside the protected wage channel, which exposes the licence to suspension in Bahrain.
- Understating accrued end-of-service liability so the balance sheet flatters equity.
- Mismatches between the salary file and the registered contract value, which cause file rejection.
Penalties applied by National Bureau for Revenue (NBR)
- Up to BHD 10,000 for late VAT registration
- 5% to 25% of the VAT due for late filing or late payment
- BHD 5,000 for failing to issue a compliant tax invoice
- Imprisonment and fines up to three times the tax for evasion offences
Figures reflect the published position of National Bureau for Revenue (NBR) and should be confirmed on NBR taxpayer portal before you rely on them for a filing decision.
Payroll & WPS in Bahrain: frequently asked questions
Does DocMakBooks generate salary files for Bahrain?
Yes — Bahrain WPS file lodged through LMRA-linked bank channels, ready to upload through National Bank of Bahrain, Bank of Bahrain and Kuwait, Ahli United Bank and other local banks.
How are social contributions handled?
SIO contributions are 15% employer and 8% employee for Bahrainis, and 3% employer plus 1% employee for expatriates, with the Wage Protection System mandatory for all private-sector employers.