Executive summary

On 20 November 2025, The Labor Market Regulatory Authority (LMRA) of Bahrain has announced an extension to the mandatory Wages Protection System (WPS) filing timeline. Employers now have until the end of Q1 26 to comply. This extension provides more time for companies to open WPS-compliant bank accounts and ensure readiness.

Additionally, the LMRA has issued a notice requiring employers to appoint a Wages Responsible Person (WRP) no later than 1 February 2026 to oversee wage file preparation, submission and support overall WPS compliance, in line with WPS regulatory requirements.

Detailed discussion

Background

The WPS is a regulatory framework introduced by the LMRA to ensure timely and accurate payment of wages to employees through approved financial channels. Employers are required to register and process salaries via banks participating in WPS and approved by the Central Bank of Bahrain.

The LMRA portal confirms that the list of participating banks will be updated periodically, and compliance remains mandatory by the stated timeline. Salaries paid outside the WPS will be considered noncompliant under LMRA regulations.

For more information on the advanced WPS, see EY Global Tax Alert, Bahrain announces mandatory advanced Wages Protection System, effective February 2026, dated 6 November 2025.

Highlights of the extension

The LMRA has extended the mandatory WPS filing timeline to the end of Q1 26 to allow organizations additional time to open WPS compliant bank accounts. This extension addresses challenges faced by employers whose current banking arrangements do not meet WPS requirements.

Employers should also appoint a WRP by 1 February 2026 to oversee WPS compliance and the accuracy of wage file submissions.

The first WPS filing is now required by the end of Q1 26.

Practical steps for employers

Employers should complete WPS compliance by the end of Q1 (March 2026) to avoid penalties and operational disruptions. Companies should proactively confirm that their banking partners are registered under WPS and initiate any required account changes early to mitigate unforeseen challenges. Employers should also appoint a WRP through their LMRA eKey account to support WPS compliance.

Implications

Failure to comply may result in restricted access to LMRA portal services, including work permit submissions, renewals and other essential functions. In addition, noncompliance can cause delays in payroll processing, lead to potential penalties and create reputational risks with regulators.