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Oman Payroll and Employer of Record: Employment Contracts
Each foreign national who will be sponsored by the employer needs an employment visa. The Royal Oman Police Immigration Department must receive an application for an employment visa from the employer, which can be done through a one-stop shop.
The employee must fulfill the following conditions in order to submit a legitimate visa application:
- The employee’s age must fall between 21 and 60.
- The person must be the same gender as the one listed on the work visa.
- The position and line of work must match those listed on the labor permit.
- Some nationalities require special authorization.
- Foreign nationals from specific nations must have a medical certificate.
Employees must obtain a residence card within 30 days of arrival to legally reside in Oman for the duration of their employment. The Directorate General of Civil Status will issue the residence card for a period of two years.
Probation Periods
The maximum probation period for employees paid monthly wages is three months, and other workers have a one-month probation period. An employee may not be placed on probation with the same employer more than once.
Notice Periods
30 days written notice for employees receiving monthly salaries.
15 days for any other arrangements unless otherwise specified in the contract.
Minimum Wage
In 2022, the minimum wage in Oman will remain at 325 OMR per month.
Working Hours
The standard work week in Oman is 45 hours per week, nine hours per day. During Ramadan, however, work hours are reduced to 30 hours per week, 6 hours per day.
Overtime
When an employee is asked to work overtime or on holidays, the maximum amount of time is set at 12 hours per day. Overtime hours in excess of 45 per week are compensated at a rate of 125% of the employee’s regular wage for daylight hours and 150% for hours worked at night.
Non Compete
Non-compete clauses are governed by Article 661 of Oman’s Civil Code (RD 29/2013), which specifies two key limitations. To begin, the former employee can only be restricted for a limited time. Then the former employee may only be barred from competing within a specific geographical area.
Severance
Employers in Oman are mandated to pay severance pay based on their employees years of service: For the first three years, the basic pay is 15 calendar days for each year of service. For each year of service beyond three years, the basic pay is increased by 30 calendar days.
Termination
Termination of employment and provision of a notice period are explicitly covered in the Omani Labor Law for unlimited period contracts. If a notice period is not provided, the compensating party must pay the gross salary for the notice period.
Except in cases of violation of conduct outlined in Articles 40 and 41 of the Labor Law for employers and employees, termination of a fixed contract prior to the expiry date is generally not permitted until the project has been completed. A notice period is not required in these cases.
Collective Bargaining
Under Omani labor law, the right to collective bargaining is recognized and protected.
Enforcement
- Labor Inspectorate
- Labor Courts
- Ministry of Manpower
- Arbitration
PAID TIME OFF
Annual Vacation
After six months of service an employee is entitled to 30 days of paid annual leave each calendar year.
Sick
An employee has the right to ten weeks ( continuous or not ) of sick leave in a year with the first and second weeks paid in full. Sickness must be proven.
Maternity
A female employee is entitled to 50 days maternity leave covering the periods before and after delivery with full pay no more than three times during her employment with the employer.
Paternity
N/A
Family
N/A
National Holidays
There are in total 13 paid public holidays.
Other Paid Time Off
Marriage leave – 3 days of paid leave. This is only permitted once during their entire service period.
Hajj leave – Up to 15 days paid leave. Only effective after one year of employment.
Compassionate leave – 3 days with death of a first-degree relative and 2 days with death of a second-degree relative.
Omani national employees who are studying in the country’s schools, colleges, or universities are allowed 15 days per year to take exams.
If a married Muslim female employee is widowed, she is entitled to 130 days of paid leave to mourn her husband’s death.
STATUTORY EMPLOYEE BENEFITS
Unemployment
PASI, Oman’s social insurance fund, which covers all Omanis working at home, within the Gulf Cooperation Council (GCC) countries, and abroad (optionally), as well as the self-employed, already provides long-term social insurance benefits during old age, death, and disability, as well as coverage for occupational injuries and diseases.
Benefits will be paid monthly for six consecutive or non-consecutive months and will equal 60% of the average salary paid in the 24 months preceding unemployment, provided that the benefit value does not fall below the minimum pension provided by social security law.
Workers Compensation
Employer: 1% of covered gross monthly payroll.
The minimum monthly earnings for calculating contributions are 325 rials if you work in Oman and 200 rials if you work abroad.
If you work in Oman, your maximum monthly earnings are 3,000 rials; if you work abroad, your maximum monthly earnings are 1,000 rials.
Social Security
Employee: 7% of monthly gross covered earnings.
The minimum monthly earnings for calculating contributions are 325 rials if you work in Oman and 200 rials if you work abroad.
If you work in Oman, your maximum monthly earnings are 3,000 rials; if you work abroad, your maximum monthly earnings are 1,000 rials.
10.5% of gross monthly covered payroll for the employer
The minimum monthly earnings for calculating contributions are 325 rials if you work in Oman and 200 rials if you work abroad.
If you work in Oman, your maximum monthly earnings are 3,000 rials; if you work abroad, your maximum monthly earnings are 1,000 rials.
Retirement
60 years old with at least 180 months of contributions (men) or 55 years old with at least 120 months of contributions (women) (women).
Early retirement: Men must be 45 to 59 years old and have contributed for at least 240 months (men) or 180 months (women).
Pension supplement (service award): Paid to supplement an old-age pension received at the standard retirement age.
Health
Omani nationals have free access to public health care in the country, but expatriates typically seek medical care in private clinics and hospitals. In general, for a middle-income country, the standard of care in the public sector is high.
PRIVATE EMPLOYEE BENEFITS
Workers Compensation
Private workers compensation is available in Oman.
Retirement
Private retirement/pension funds are available as options in Oman.
Health
Private healthcare is available in Oman.
Insurance
Private life insurance is available in Oman.
PERSONAL INCOME TAX
Tax Year
Same as a calendar year.
Tax Tables
Oman currently does not have a personal income tax (PIT) law in place.
Taxation Method
N/A
Double Taxation
Oman has multiple double tax agreements (DTA) with other countries.
Residence Requirements
N/A
Payroll Calendars
Payroll is usually done once a month in Oman.
Rebates & Tax Credits
N/A
Health Insurance
Omani nationals have free access to public health care in the country, but expatriates typically seek medical care in private clinics and hospitals. In general, for a middle-income country, the standard of care in the public sector is high.
Unemployment
PASI, Oman’s social insurance fund, which covers all Omanis working at home, within the Gulf Cooperation Council (GCC) countries, and abroad (optionally), as well as the self-employed, already provides long-term social insurance benefits during old age, death, and disability, as well as coverage for occupational injuries and diseases.
Benefits will be paid monthly for six consecutive or non-consecutive months and will equal 60% of the average salary paid in the 24 months preceding unemployment, provided that the benefit value does not fall below the minimum pension provided by social security law.
Social Security
Employee: 7% of monthly gross covered earnings.
The minimum monthly earnings for calculating contributions are 325 rials if you work in Oman and 200 rials if you work abroad.
If you work in Oman, your maximum monthly earnings are 3,000 rials; if you work abroad, your maximum monthly earnings are 1,000 rials.
10.5% of gross monthly covered payroll for the employer
The minimum monthly earnings for calculating contributions are 325 rials if you work in Oman and 200 rials if you work abroad.
If you work in Oman, your maximum monthly earnings are 3,000 rials; if you work abroad, your maximum monthly earnings are 1,000 rials.
PAYROLL ELEMENTS
Income
Salaries, wages, and allowances received by working persons are not subject to income tax.
Bonuses
13-month payments are not required by law. Employers have the option to give out incentives at their discretion.
Allowances
Income support (income tested): 20 to 100 rials per month, depending on the level of care required.
Cash assistance (income tested): payments range from 80 to 264 rials per month, depending on household circumstances and the number of eligible beneficiaries.
Immediate cash assistance is provided, ranging from 100 to 300 rials depending on family composition.
Housing assistance ranges from 400 to 600 rials per month, depending on family composition.
Benefits can be paid in a lump sum or in installments.
Under certain conditions, an additional lump-sum benefit of up to 2000 rials may be paid to purchase property.
A death grant of 1,500 rials is paid to an eligible survivor; 1,000 rials is paid to a dependent child.
Benefits in Kind
Omani labor law does not specify the exact types of benefits in kind that an employer must provide to their employees.
Investment Income
N/A
Retirement Funding
60 years old with at least 180 months of contributions (men) or 55 years old with at least 120 months of contributions (women) (women).
Early retirement: Men must be 45 to 59 years old and have contributed for at least 240 months (men) or 180 months (women).
Pension supplement (service award): Paid to supplement an old-age pension received at the standard retirement age.
Health Insurance
Omani nationals have free access to public health care in the country, but expatriates typically seek medical care in private clinics and hospitals. In general, for a middle-income country, the standard of care in the public sector is high.
Risk Insurance
Oman labor law does not mention risk insurance.
Taxable Income
Salaries, wages, and allowances received by working persons are not subject to income tax.
Allowable Deductions
N/A
PAYROLL TAXES AND EMPLOYER CONTRIBUTIONS
Payroll Taxes
Salaries, wages, and allowances paid to employees are not subject to personal income tax (PIT) in Oman.
Unemployment
PASI, Oman’s social insurance fund, which covers all Omanis working at home, within the Gulf Cooperation Council (GCC) countries, and abroad (optionally), as well as the self-employed, already provides long-term social insurance benefits during old age, death, and disability, as well as coverage for occupational injuries and diseases.
Benefits will be paid monthly for six consecutive or non-consecutive months and will equal 60% of the average salary paid in the 24 months preceding unemployment, provided that the benefit value does not fall below the minimum pension provided by social security law.
Social Security
Employee: 7% of monthly gross covered earnings.
The minimum monthly earnings for calculating contributions are 325 rials if you work in Oman and 200 rials if you work abroad.
If you work in Oman, your maximum monthly earnings are 3,000 rials; if you work abroad, your maximum monthly earnings are 1,000 rials.
10.5% of gross monthly covered payroll for the employer
The minimum monthly earnings for calculating contributions are 325 rials if you work in Oman and 200 rials if you work abroad.
If you work in Oman, your maximum monthly earnings are 3,000 rials; if you work abroad, your maximum monthly earnings are 1,000 rials.
Workers Compensation
Employer: 1% of covered gross monthly payroll.
The minimum monthly earnings for calculating contributions are 325 rials if you work in Oman and 200 rials if you work abroad.
If you work in Oman, your maximum monthly earnings are 3,000 rials; if you work abroad, your maximum monthly earnings are 1,000 rials.
ADMINISTRATION
Income
Salaries, wages, and allowances received by employees are not subject to income tax.
Payroll Taxes
Salaries, wages, and allowances paid to employees are not subject to personal income tax (PIT) in Oman.
Unemployment
PASI, Oman’s social insurance fund, which covers all Omanis working at home, within the Gulf Cooperation Council (GCC) countries, and abroad (optionally), as well as the self-employed, already provides long-term social insurance benefits during old age, death, and disability, as well as coverage for occupational injuries and diseases.
Benefits will be paid monthly for six consecutive or non-consecutive months and will equal 60% of the average salary paid in the 24 months preceding unemployment, provided that the benefit value does not fall below the minimum pension provided by social security law.
Social Security
Employee: 7% of monthly gross covered earnings.
The minimum monthly earnings for calculating contributions are 325 rials if you work in Oman and 200 rials if you work abroad.
If you work in Oman, your maximum monthly earnings are 3,000 rials; if you work abroad, your maximum monthly earnings are 1,000 rials.
10.5% of gross monthly covered payroll for the employer
The minimum monthly earnings for calculating contributions are 325 rials if you work in Oman and 200 rials if you work abroad.
If you work in Oman, your maximum monthly earnings are 3,000 rials; if you work abroad, your maximum monthly earnings are 1,000 rials.
Workers Compensation
Employer: 1% of covered gross monthly payroll.
The minimum monthly earnings for calculating contributions are 325 rials if you work in Oman and 200 rials if you work abroad.
If you work in Oman, your maximum monthly earnings are 3,000 rials; if you work abroad, your maximum monthly earnings are 1,000 rials.
Statutory Benefits
Statutory benefits are mainly for the citizens of Qatar yet it is mandatory for companies who employ expatriate workers to provide the equivalent.
Employee Benefits
Certain benefits are mandated by law . Qatar has 10 public holidays on which employees are excused from work, and a minimum of 15 days of leave per year. Employers are not obligated to pay for sick leave. Maternity leave is 50 days and paternity leave is not mandatory in Qatar but employers can offer it.
LEGISLATION
- Oman Labor Law (Royal Decree No. 35/2003)
- Trade Unions Law (Royal Decree No. 72/2010)
- Social Insurance Law (Royal Decree No. 32/2014)
- Health and Safety Law (Royal Decree No. 42/2020)
- Foreign Workers Law (Royal Decree No. 67/2013)
STATUTORY BODIES
- Ministry of Manpower
- Labor Inspectorate
- Labor Court
- Social Security Organization
- Public Authority for Social Insurance
