Thanks to the forward-thinking ways of the government, Bahrain has grown into the most well-established financial hub among the GCC (Gulf Cooperation Council) countries. Besides the non-oil sector, the financial services industry happens to be the most significant contributor to the country’s GDP. If you have a Bahrain business of your own, the time to outsource payroll services is now.
What is Payroll? In simple terms, it refers to the total money paid by the employer to the employees of a company. Payroll also means improvements in pay policies, leaves disbursal policies, and other benefits for the employees.
The Covid-19 Pandemic has changed the way people go about their businesses. Consequently, business owners are on the lookout for solutions that take huge financial responsibilities off their shoulders. Individuals who have carried out company registration in Bahrain can go for payroll outsourcing to reduce costs significantly.
Let’s look at how payroll outsourcing fares against an in-house team for payroll management in Bahrain!
What Are the Payroll Taxation Rules in Bahrain?
There is no concept of personal income tax in Bahrain. Both the employer and employee of a Bahrain business are subject to the country’s payroll taxes.
However, employees will have to pay 1% of their wages towards unemployment insurance. Local employees need to pay 7% of their wages for social security. Meanwhile, ex-pats need to pledge 1% of their salaries towards the exact cause.
An employer planning on starting a business in Bahrain will have to pledge 12% of a local employee’s wage and 1% of an ex-pat towards social security.
What Are the Benefits of Outsourcing Your Payroll Services in Bahrain?
1. Cost-Effective Alternative
If you have gone for company registration in Bahrain only recently, an in-house Payroll processing team can mean a lot of additional expenses. You will have to take care of their salaries and other vital expenses, including medical bills, bonuses, etc.
When you outsource payroll functions from another financial firm, it rids you of the expenses that come with an in-house team of employees for payroll. All you need to do is pay a one-time nominal charge, and everything will be taken care of swiftly.
2. Increased Data Security
If you are planning on setting up a company in Bahrain, you should pay extra attention to the importance of payroll data. The protection and confidentiality of payroll data is a must.
Payroll data includes secure information about the pay scale in your business.
No one should know how much one receives compared to the other as it may mean trouble for your own company. Payroll service providers in Bahrain guarantee payroll confidentiality which is a massive plus for up and coming businesses.
3. Make Sure of Payroll Compliance
Many rules exist in Bahrain concerning employees and labour, non-compliance of which can harm your business exponentially. A financial firm that offers payroll functions to companies in Bahrain are well aware of the rules as mentioned earlier and regulations and will make sure to comply with the same.
4. High Level of Accuracy
It is a well-known fact that financial firms which offer payroll services come equipped with experts who have great experience in the field and can offer accurate services unlike any other.
If high accuracy in payroll accounting is a priority, you should consider outsourcing payroll services in Bahrain.
5. Checks Fraudulent Activities
Errors in accounting books can result in enormous losses for the business. You may end up overpaying or underpaying an employee in your workforce. Inaccuracy in payroll can also invite penalties for employers due to inappropriate tax filing.
Financial firms have Payroll experts who can quickly locate fraudulent activities or errors and save your business from incurring any losses or penalties.
6. Aids in Key Business Processes
The financial firms in Bahrain are armed with people who possess expert knowledge across different fields. They can offer their suggestions to help you improve your business processes.
You can employ the help of these consultants when it comes to adopting a structure for the most major business benefits and increased revenue.
Financial firms that offer payroll services in Bahrain are much more affordable than an in-house team of employees taking care of accounting and payroll. The latter has its fair share of expenses in wages, medical expenses, and so forth compared to a one-time nominal fee attached to outside firms.
If a business setup in Bahrain is on your mind, you should go for payroll outsourcing. Following the aftermath of a global pandemic, it is one of the best options for your business.
If you want to know more about payroll outsourcing services in Bahrain or want to gain other valuable business insights, get in touch with us today!