Employer of Record in Oman

Hiring in Oman for the first time can be overwhelming, especially when navigating unfamiliar employment laws. Whether you hire independent contractors, set up a legal entity, or use an EOR service, understanding the local employment landscape is crucial for success. Playroll’s comprehensive guide can help you get started if you're hiring locally or relocating a team member.

Companies can hire employees in Oman in the following three ways:

• Setting up a local entity. Entity establishment reduces risk exposure and enables direct hiring, but can be costly and time-consuming – making it less practical for companies seeking quick and flexible solutions for hiring in Oman.
• Partnering with an Employer Of Record. An EOR, like Playroll, is a third-party entity that serves as the legal employer of your international workforce which hires, pays, and manages compliance with Oman’s labor laws and tax regulations.
• Hiring independent contractors. Hiring contractors gives companies a flexible, affordable alternative to hiring local employees, though it involves unique misclassification risks.

Businesses can only operate smoothly in Oman if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Oman below, to avoid any compliance issues.

Employment Contract Requirements

The Omani government has implemented reforms aimed at streamlining employment and business procedures. Employment contracts, which can be verbal or written, must be in Arabic or a notarized Arabic translation if written. Essential components for employers in contracts include:

• Identification of both parties
• Commencement date
• Employee's compensation and other benefits
• Workplace

Onboarding Process

We can help you get a new employee started in Oman quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Oman

In Oman, regular working hours are 45 hours per week, Employees can work nine hours per day. However, during Ramadan, work hours are reduced to 30 hours per week (six hours per day) for employees.

Overtime in Oman

If an employee works beyond 45 hours per week mentioned in Article 68, the employer should pay them overtime equivalent to their basic salary, plus an extra 25% for daytime overtime and 50% for nighttime overtime.

Probation Period in Oman

Probation periods in Oman are determined by the employee's contract or collective agreement, typically lasting up to three months. During this period, no notice is required for termination.

Fiscal Year in Oman

1 January - 31 December is the 12-month accounting period that businesses in Oman use for financial and tax reporting purposes.

Payroll Cycle in Oman

The payroll cycle in Oman is usually monthly, with employees being paid as stipulated in the employment contract.

Minimum Wage in Oman

The minimum wage for employees in Oman is typically 1.80 OMR per hour, amounting to ~ 325 OMR per month for a typical 45 hour work week.

Bonus Payments in Oman

In Oman, the payment of a 13th salary or bonus is not a legal requirement. However, many employers in Oman choose to offer bonuses or additional compensation to their employees, typically during festive seasons or as a reward for performance. The provision of such bonuses is usually at the discretion of the employer and may vary depending on the company's policies and financial performance.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 12.5% on top of the employee salary in Oman.

Employee Payroll Tax Contributions

In Oman , the typical estimation for employee payroll contributions cost is around 8%.

Individual Income Tax Contributions

Oman does not impose personal income tax.

Pension in Oman

In Oman, employers are required to contribute 10.5% of their employees' salaries to social security, managed by The Public Authority for Social Insurance (PASI). This system provides pensions and various other benefits for insured individuals and their dependents, ensuring financial security and support for workers and their families.

Mandatory Leave Entitlement in Oman

The annual leave entitlement in Oman is 30 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Oman

Oman observes 8 national public holidays alongside additional state-specific holidays whose dates vary according to the Lunar calendar.

Paid Time Off in Oman

Employees in Oman are entitled to a 30-day annual leave with full pay after six months of consecutive employment at one organization. They receive 100% of their regular salary during this leave, and any unused leave can be carried over to the following year.

Maternity Leave In Oman

In the Omani private sector, women receive 50 days of maternity leave at full pay, with some organizations allowing this leave three times. In the public sector, female employees can take maternity leave up to five times during their service, although the exact duration is not specified by law. These regulations aim to support women's health and rights during pregnancy and childbirth while promoting a favorable work environment.

Paternity Leave In Oman

Male employees receive seven days of paid paternity leave, which must be taken within 98 days of the child's birth. This provision applies to both Omani and non-Omani employees across various sectors.

Sick Leave In Oman

In Oman, employees receive 10 days of sick leave paid at 100% of their regular income by the employer. Compensation beyond two weeks of sickness is calculated as follows:

Parental Leave In Oman

Oman does not have a separate shared parental leave policy.

Termination Process in Oman

Termination procedures in Oman depend on the employment agreement, contract type, and the reason for termination. Employers must have valid grounds, offer notice, and provide end-of-service gratuity. Immediate termination without notice or gratuity is only permissible for gross misconduct; otherwise, termination requires a justifiable cause.

Notice Period in Oman

In Oman, monthly salary employees typically have a one-month notice period, while other cases require a 15-day notice, unless specified otherwise in the contract. Written notices are mandatory, and no notice is required during the probation period.

Severance in Oman

In Oman, employers provide severance pay based on an employee's tenure as follows:

• 15 calendar days' basic pay per year for the initial three years.
• 30 calendar days' basic pay per year beyond three years of service.