Bahrain Labour Law dictates various deductions and calculations as part of the employee service schemes. If you are a Bahrain-based company or you have a business branch in the region, these deductions apply. You have to take the initiative for these specific deductions on behalf of your employees.

GOSI Bahrain is one such organization that deducts regular amounts as part of social insurance services. This post explores the roles and responsibilities of GOSI Bahrain. It helps you identify the optimum method of Bahrain Gosi calculation. Hop in to learn more about the concept of GOSI Bahrain from employee and employer viewpoints.

What is Bahrain GOSI Calculation?

Before getting started with the Bahrain GOSI calculation, let us have a quick overview of the organization behind the scheme. GOSI Bahrain is a Bahrain-based organization. Their priority is to focus on the deductions and calculations related to the social insurance segment of companies.

If your company contributes social insurance payments on behalf of an employee, it goes to the account of GOSI. The term GOSI stands for General Organization for Social Insurance. Similar organizations are available in other countries and regions as per their labour laws.

Bahrain GOSI calculation is a concept that helps your employees get specific payments and monetary support during events like:

Healthcare and medical coverage
Death and disability support
Funds for retirement
Special grants

GOSI payments are recorded as monthly deductions from both employers and employees. The calculation uses the annual salaries of employees. Different considerations and deduction factors are available before calculating the GOSI payment for your employees.

The Labour Law of Bahrain is the final authority on deciding the GOSI payments of employees. Compliance norms and regulations are in consideration with the quality provision of financial support for employees.

According to the laws, employees working in self-employment mode and for a firm are subject to GOSI deductions. You can experience the best of these monetary benefits by staying compliant with the region’s specific regulations.

How to Calculate GOSI Bahrain Rates?

You might be wondering how GOSI calculation in Bahrain is taking place. The calculation of Bahrain GOSI rates follows a fixed model as defined by the governing body. Authorities recommend you stay up-to-date on the changes in GOSI calculations.

The calculation of GOSI rates can be represented using the following points:

GOSI Calculation Formula

The formula for calculating GOSI is represented as GOSI amount = % of the employee’s basic salary or total salary (basic salary + allowances). We will see the terms in the formula in the next section. It is the universally accepted formula for calculating GOSI rates for employees in Bahrain.

Terms in the Formula

GOSI amount reflects the sum of money that should get credited monthly to the GOSI account on behalf of an employee.
Basic salary refers to the basic monthly pay of an employee. Total salary denotes the amount showing the basic pay and allowances of an employee without considering contributions like social insurance payments or other deductions.

The % sign represents a fixed percentage of the salary determined by the Labour Law in Bahrain. It varies by employers and their operations models.

Employee contributions and employer contributions differ from each other. The company determines the GOSI percentage calculations.

Involvement of Ministry

For your information, the GOSI calculation is managed by the GOSI organization in Bahrain. All reporting should be available for the transparent use of the Government of Bahrain. The Ministry of Labour and Social Development presides over the laws related to GOSI calculations and deductions in organizations.

Organization Reporting

The organization making the GOSI payment should have a clear idea regarding the calculation and deduction principles. If your company is making GOSI payments, a well-documented database is necessary. You can use it for future references as well.

GOSI Deduction Percentages

The deduction percent of GOSI payment is fixed for employers. However, the company determines that percentage according to its entire payroll processing model. Once a GOSI account is created for an employee, you have to pay a definite amount monthly to the GOSI organization.
You have to make the payment even if the monthly salary to the employee is missing from a particular month’s bank statement. The deduction is per the annual salary of your employees.

GOSI Payment Variables

GOSI calculations and deductions may undergo certain variations depending on the employee-employer deal regarding the particular payment. Some companies may ask for an additional 1.5% of the GOSI deduction as part of the administrative fee.
If your employee has completed more than 3 years in Bahrain as a professional, they may be eligible for a 0.5% reduction in their GOSI contribution calculation.

GOSI Bahrain: An Employee Perspective

GOSI calculation Bahrain exhibits different perspectives. First, let us consider the viewpoint of an employee with a GOSI deduction in their profile.

The employee should pay a fixed amount to GOSI Bahrain to become part of the scheme.
The monthly deduction is directly debited from the company’s side before making the salary payment to the employee.
GOSI deduction happens every month irrespective of the salary payment status of the employee.
The forms and payment documents regarding GOSI deduction will be given to employees by the company.
Employees can claim and withdraw the GOSI amount against their standing account because of various reasons. We have covered this in the first section.
GOSI deduction is different from other contributions, like leaving indemnity payments.
The GOSI calculation for expats and foreign employees in Bahrain under different job categories is also under consideration here.
Expats may or may not get a membership under the GOSI scheme. Companies decide the inclusion of their expatriate employees under the GOSI plan. If you are a foreign national working in Bahrain, fixed monthly contributions to GOSI are not a guarantee.

GOSI Bahrain: An Employer Perspective

The various terms to understand GOSI Bahrain from an employer’s perspective are as follows:

You have to work with the social insurance organization to create a GOSI account for your employees.
All formalities and compliance-related procedures are your responsibility. The employer has to stay on top of all regulatory norms and measures.
You have to commit to the GOSI scheme for your employees irrespective of their employment type with your organization.
Your deduction and the employee’s deduction for the GOSI contribution should be in consideration before giving them their monthly salaries.
If you make any mistakes or failures related to a particular GOSI contribution, it could result in a fine, penalty, or legal action against you.
If you are an employer, the best step is to outsource the GOSI deductions to a trusted partner to ensure a hassle-free compliance process. Connecting with HR software technology solutions can help your cause.

How Can Artify 360 HR Software Contribute to GOSI Bahrain Calculation?

Is your primary goal to build an automated platform where various deductions like GOSI calculation are feasible? Worry not, as we have the perfect cloud HR software solution for you.

Embrace your core digital HR objectives with our dedicated system, Artify 360. The proven HR software can help you manage your employee deduction calculations like GOSI payments. An integrated payroll processing module is part of this HR payroll software solution. You can use this module to avail yourself of the best scenarios of Bahrain GOSI calculation.

You can reach out to us to know more about how we can assist you in the GOSI calculation of your employees. We offer you an HR software system that promotes the optimum GOSI deductions and payments for your organization.

Bahrain GOSI Calculation: Everything You Need to Know