Bahrain Indemnity Calculation
Many confusions and complications while working with a Bahrain based HRM. From my experience and formula I used in my functions, I am sharing here to help others. The leaving Indemnity also called as End of Service Benefit(ESB). So Bahrain Indemnity Calculation is part of the employee payment service, which worked out when an employee resigned or terminated his job by employer. From different sources regarding labour law, I figured out it. It shows something like it calculated first three years 50% of the Salary. After third year, the Indemnity calculated full Salary.
The Leaving Indemnity calculated from the last salary the employee received during the time of termination. Which means the Last paid salary considered to calculate the ESB or Indemnity. Some information stating that the indemnity calculated only with Basic Salary. But some companies calculates Basic allowance plus Social allowances, if any. And even some companies providing based on the gross salary. So lets consider it as basic Plus Social allowance.
Calculating the Leaving indemnity is like Payroll calculation.But it works like the period of employee service. Which means the years and months employee worked in a company. It uses the days also to calculate the ESB. So the last paid salary will be used to calculate the ESB. Lets take an example of calculation.
An Employee works for a period of 6 years. and his gross Basic+Social allowance is 700 BD(Bahrain Dinar ).
First Year Half Salary – 350 BD
Second Year Half Salary – 350 BD
Third Year Half Salary – 350 BD
Forth Year Full Salary – 700 BD
Fifth Year Full Salary – 700 BD
Sixth Year Full Salary – 700 BD
So the Total Indemnity will be calculated as 3150 BD. And if the employee works for 6 years and 7 months and 20 days. The Fraction level Calculation should be applied to get his indemnity. That I have made a calculation for demo.
The calculation and the formulas i used to calculate is may not be matching to all companies. So Consider this calculation is an approximate or tentative values. If you guys have any suggestion or improvement, I will adjust and provide the best results in it.