Workforce Payments Guide Bahrain

Last updated: Dec 17, 2023

Bahraini Dinar (BHD)
Payroll Frequency
Fiscal Year
1 January- 31 December
Employer Taxes
12.00% + Healthcare fee
Employee Costs
Central Bank
Central Bank of Bahrain (CBB)
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3rd Party Payments

In Bahrain, the payment due dates for an employer are as follows:

Taxes based on the initial estimated tax statement filed are payable in 12 equal monthly instalments.

Payments are due starting on the 15th day of the fourth month of the taxable year.

The final payment is due on the 15th day of the third month after the end of the taxable year or the date the final income tax statement is filed, whichever is later.

Any excess income tax paid will be credited and used in the first invoice for income tax following the establishment of the credit by the Minister1.

Payments Coverage

Papaya Global supports payments, with potential local requirements in Bahrain.

Contractor Payments

Papaya Global supports payments to contractors in Bahrain. The payout currency may vary based on the receiver bank account setup when receiving foreign currencies. it is advised for contractors to reach out to their bank to confirm how foreign currencies are handled

Payroll Frequency



IBAN Example Bahrain BH56VXRM98286786752189
IBAN in print BH56 VXRM 9828 6786 7521 89
Country Code BH
Digit Code 56
Bank Code VXRM
Bank Account Number 98286786752189


In Bahrain, the Know Your Customer (KYC) process for companies involves several steps:

Document Verification: The company needs to read and extract identity data from the documents provided by the client.

Facial Recognition: The company needs to ensure that the person on camera is real and matches the document.

Data Validation: The company needs to verify the individual via government databases.

Screening: The company needs to check if the customers are worthy of doing business with through Anti-Money Laundering (AML) & sanctions screening.

This process is facilitated by the Benefit Company and the Information & eGovernment Authority (IGA) through an electronic means, eKYC. The eKYC service enables financial institutions to electronically authenticate customer identity and retrieve KYC data for both individual and corporate clients, in a secure and transparent manner.

The processes include highly secured consent by the customer via biometric fingerprint, e-key, or written/electronic consent. This service will allow members to view, verify, and store personal records for safety and security reasons.

Banking Regulations

In Bahrain, the Central Bank of Bahrain (CBB) has introduced several regulations that impact cross-border workforce payments:

AFAQ (GCC RTGS) System: As part of the ongoing efforts towards developing the cross-border payment systems in the Kingdom of Bahrain, the CBB, along with the Saudi Central Bank (SAMA), joined the Arabian Gulf System for Financial Automated Quick Payment Transfer (AFAQ) that was launched on the 10th of December 2020. The main objective of the System is to provide banks and customers an additional channel of transferring funds through a faster and more secure mean at a lower transaction cost.

Payment Purpose Codes: The CBB has introduced new Purpose of Payment Codes which are required for all cross-border SWIFT payments sent from bank accounts in Bahrain, or incoming payments received into your local bank accounts. The main objective of capturing these codes is to enhance oversight of all incoming and outgoing financial transfers to and from Bahrain.

These regulations are part of the CBB’s efforts to enhance the transparency, security, and efficiency of cross-border payments. For more detailed information, you can refer to the CBB’s official website.

Bank Account Opening

To open a company bank account in Bahrain, you need to follow these steps:

Identity Proof: Provide identity proof of the business shareholders and investors.

Address Proof: Provide address proof of the business shareholders and investors.

Business Plan: Prepare a well-drafted business plan.

Company Registration Certificate: Provide the company registration certificate.

Initial Deposit: The initial deposit can be 300 BD / USD 2,500 / EUR 2,000 / SAR 10,000 / AED 10, 000 / GBP 2,0001.

Additional Documents: Provide any other document if required by the bank.
The time it takes to open a company bank account in Bahrain can vary between 2 to 4 weeks

International Banks

Several major foreign banks operate in Bahrain. Here are some of them:

  • Ahli United Bank
  • Arab Banking Corporation
  • BNP Paribas (France)
  • Citibank N.A. (USA)
  • Credit Libanais SAL
  • First Abu Dhabi Bank – Bahrain Branch
  • HSBC Bank Middle East Limited
  • Habib Bank Limited

Local Major Banks

Several major local banks operate in Bahrain. Here are some of them:

  • Ahli United Bank
  • Arab Banking Corporation
  • Bank of Bahrain and Kuwait (BBK)
  • National Bank of Bahrain
  • Bahrain Islamic Bank
  • Bahrain Development Bank
  • Ithmaar Bank
  • Gulf International Bank
  • Investcorp
  • Alubaf Arab International Bank

Local B2C Payments Tools

In Bahrain, there are several B2C payment tools available for businesses and consumers:

Credit and Debit Cards: By integrating a payment gateway into your ecommerce site, you can accept card payments from customers.

Digital Wallets: Customers can store a variety of different credit cards and bank account numbers within an online wallet. Examples include services like PayPal, Apple Pay, and Google Pay.

Bank Transfers: Also known as electronic funds transfers or direct debit payments, these payment systems allow customers to complete checkout by transferring money from their bank account to the retailer’s bank account.
Mobile Payments: The customer sends a payment request to the service provider via text


Cryptocurrency is acceptable in Bahrain. The Central Bank of Bahrain (CBB) has promulgated regulatory rules in the form of a Directive governing “crypto assets”. The rules contained in the CBB’s Directive cover licensing requirements, the conditions for the issuance and holding the CBB license, minimum capital requirements, measures to safeguard client or customer interests, technology standards and in particular the cyber security risk management requirements, reporting, notifications and approval requirements, conduct of business obligations, prevention of market abuse and manipulation, enforcement and the powers under the CBB Law for inspections and access.

Under the Directive, no person may market or undertake the activities, by way of business, within or from the Kingdom of Bahrain, comprised of regulated crypto-asset services without obtaining a license from the CBB. Regulated crypto-asset services are defined to include the conduct of any or any combination of the following types of activities: Reception and Transmission of order, Execution of orders on behalf of clients, Dealing on own account, Portfolio Management, Crypto-asset Custodian, Investment Advice.

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