MANAMA, 17th June, 2022 (WAM) — The Social Insurance Organisation (SIO) of the Kingdom of Bahrain has raised contribution rates due from insured individuals employed in the government and private sectors, including Bahrainis working in any of the Gulf Cooperation Council (GCC) countries.
The total increase, which includes a combined share from the insured individual and the employer, has become 24 percent.
The recent amendments to the laws regulating retirement pension and benefits in the Kingdom of Bahrain entail an increase in the contribution of the employer in the government sector by 2 percent of the employee’s salary, bringing the total percentage after the increase to 17 percent as of May 2022, while the contribution of the Bahraini employee (insured or contributor) has increased by 1 percent, bringing the total contribution rate to 7 percent, starting by January 2023.
In the private sector, the percentage of the employer in the pension contribution has increased by 2 percent of Bahraini employees’ wages as of May 2022, and to be increased by 1 percent at the beginning of each year from January 2023 until January 2028, bringing the total percentage of the employer’s share to 17 percent.
The share of the Bahraini employee in the private sector has increased by 1 percent, which means the total contribution rate will reach 7 percent by January 2023.
According to the protection extension system, the employee and the employer are obligated to bear their share in contributions in accordance to the percentage required in the employee’s own home country, provided that the employer’s share does not exceed the percentage applicable in the country where they are based.
If the employer’s contribution is less than the required percentage, the employee is required to cover the difference in the contribution rate. In this case, the employer is obligated to deduct the difference from the employee’s salary, unless the employee’s home country decides to bear such difference on behalf of its citizens.
The contribution rate that the employers in the UAE will pay on behalf of their Bahraini employees will remain unchanged (15 percent), however, it is the responsibility of the insured individuals to bear the differences. According to the new amendments, Bahrainis working in the government sector in the UAE will pay a total rate of 9 percent, but if they are working at the private sector, their share will be 11.5 percent by the end of the period announced in the decision.