--- title: Bahrain End of Service Benefits: System Configuration Requirements url: https://www.erpbahrain.com/compliance/end-of-service-benefits/system-configuration/ updated: 2026-10-09 publisher: BAHRAIN ERP (part of Shyphan AI Solutions Pvt Ltd) --- Compliance # Bahrain End of Service Benefits: System Configuration Requirements The configuration areas involved in setting up end of service benefits in an ERP system. Quick answer End of Service Benefits in Bahrain: Law 36/2012 Art 116: a worker not covered by the Social Insurance Law gets a leaving indemnity of half a month's wage per year for the first three years and one month's wage per year thereafter, pro rata for fractions. Art 47: leaving indemnity and leave balance are calculated on the most recent basic wage plus social allowance, if any. - SIO: for non-Bahrainis the employer alone pays monthly contributions of 4.2% of wages for the first three years and 8.4% thereafter; payment became effective at SIO on 1 March 2024. - SIO: non-Bahraini gratuity is calculated on basic salary plus social allowance only, as 15 days' salary per year for the first three years and one month per year after, paid as a lump sum. - SIO: gratuity is paid within 5 working days of the application (the LMRA booklet states 10 working days); LMRA says employers must pay contributions in the first 15 days of each month or incur a 5% surcharge. - Sources checked 2026-10-09 This page is part of our Bahrain compliance series. Related topics: [Employee Leave](https://www.erpbahrain.com/compliance/employee-leave/). Apply them in [Zoho Books](https://www.erpbahrain.com/zoho/zoho-books/), [Odoo Accounting](https://www.erpbahrain.com/odoo/odoo-accounting/) or [ERPNext Accounting](https://www.erpbahrain.com/erpnext/erpnext-accounting/), and see [all compliance topics](https://www.erpbahrain.com/compliance/). Checked against official sources on 2026-10-09. Source links are listed on this page. Rules change, so check the latest notice from the Ministry of Labour and your legal adviser before filing. Configuration ## What to Configure Where each setting lives differs by platform, so we map it during the project. **Configuration areas** | Configuration area | Purpose | | Calculation rules | To be set per your confirmed requirements | | Salary history fields | To be set per your confirmed requirements | | Provision accounts | To be set per your confirmed requirements | | Settlement workflow | To be set per your confirmed requirements | Records ## Records Involved End of Service Benefits affects how records are captured, approved and reported in your ERP. The rules come from the Ministry of Labour and your legal adviser; this page only describes how a system can be set up to support them. - Employment dates - Salary history - Termination reason - Calculation records Controls ## Controls and Evidence **Controls and evidence** | Control | Evidence to keep | | Calculation method is validated by your adviser | Approval record, report or screenshot with date | | Inputs are traceable | Approval record, report or screenshot with date | | Provisions are reviewed regularly | Approval record, report or screenshot with date | | Final settlements are approved | Approval record, report or screenshot with date | Setup ## How to Set Up End of Service Benefits in an ERP **Setup steps** | Step | What to do | | 1. Confirm | Confirm the current requirement for end of service benefits with the Ministry of Labour and your legal adviser | | 2. Map records | Map employment dates, salary history, termination reason to ERP fields | | 3. Configure | Set up calculation rules, salary history fields, provision accounts | | 4. Add controls | Enable the controls above, with approvals and logging | | 5. Test | Run the scenarios below with sample data and compare with expected results | | 6. Document | Record settings, owners and the review rhythm, then train users | Testing ## Test Scenarios Before Go-Live **Test scenarios** | Scenario to test | Expected result | | Try to break this control: calculation method is validated by your adviser | The system blocks or flags it, and the attempt is logged | | Try to break this control: inputs are traceable | The system blocks or flags it, and the attempt is logged | | Try to break this control: provisions are reviewed regularly | The system blocks or flags it, and the attempt is logged | | Try to break this control: final settlements are approved | The system blocks or flags it, and the attempt is logged | | Run the process end to end with sample data | Reports reconcile with the transactions entered | Ongoing ## Review Rhythm **Suggested review rhythm** | When | Review | | Before go-live | Confirm requirements with the authority or your adviser; test with sample documents | | Monthly | Reconcile reports to filings or statements; review exceptions | | Quarterly | Review user access, approvals and changes made to settings | | After a rule change | Update configuration, retest and record the change | FAQ ## Compliance Questions - Where do these requirements come from? From official publications of the Ministry of Labour and your legal adviser, linked on this page - Who sets the rules for end of service benefits? The rules come from the Ministry of Labour and your legal adviser. Always check current official sources. - What records are involved in end of service benefits? Employment dates, Salary history, Termination reason, Calculation records. - Can BAHRAIN ERP configure our system once rules are confirmed? Yes. We configure and test the system against the requirements your adviser confirms. - What do the official sources say about end of service benefits in Bahrain? Law 36/2012 Art 116: a worker not covered by the Social Insurance Law gets a leaving indemnity of half a month's wage per year for the first three years and one month's wage per year thereafter, pro rata for fractions. Art 47: leaving indemnity and leave balance are calculated on the most recent basic wage plus social allowance, if any. SIO: for non-Bahrainis the employer alone pays monthly contributions of 4.2% of wages for the first three years and 8.4% thereafter; payment became effective at SIO on 1 March 2024. - Which records does end of service benefits involve in an ERP? Employment dates; Salary history; Termination reason; Calculation records. - Which ERP controls support end of service benefits? Calculation method is validated by your adviser; Inputs are traceable; Provisions are reviewed regularly; Final settlements are approved. - Which ERP settings should be reviewed for end of service benefits? Calculation rules; Salary history fields; Provision accounts; Settlement workflow. Have More Questions? Book A Free Consultation [ Talk to Us ](https://www.erpbahrain.com/contact.html) Or, Email us at contact@erpbahrain.com ## Related Pages - [End of Service Benefits guide](https://www.erpbahrain.com/compliance/end-of-service-benefits/) - [All compliance topics](https://www.erpbahrain.com/compliance/) - [Bahrain End of Service Benefits: ERP Control Checklist](https://www.erpbahrain.com/compliance/end-of-service-benefits/erp-controls/) - [Bahrain End of Service Benefits: Frequently Asked Questions](https://www.erpbahrain.com/compliance/end-of-service-benefits/faq/)