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Oman

Payroll and Benefits Guide

Last updated:
Dec 8, 2022

Table of contents

Overview Contributions Minimum Wage Payroll Working Hours Leave Termination Common Benefits VISA VAT

Overview

Capital
Muscat
Currency
Omani Rial (OMR)
Date Format
dd/mm/yyyy
Fiscal Year
1 January- 31 December
Payroll Frequency
Monthly
Employer Taxes
12.50%

Contributions

Employer

Employer Payroll Contributions

10.50% Social Security
1.00% Occupational Injury and Disease
1.00% Job Security Fund
12.50% Total Employment Cost

Employee

Employee Payroll Contributions

7.00% Social Security
1.00% Job Security Fund
8.00% Total Employee Cost

Employee Income Tax

Oman does not have personal income tax.

Minimum Wage

General

In Oman, the minimum wage is 325 OMR per month, of which 225 OMR must be salary, and the remaining 100 OMR must be paid as a bonus.

 

Payroll

Payroll Cycle

In Oman, the payroll frequency is typically monthly. The employer must make salary payments at least once a month.

13th Salary

There is no legal requirement for employers to pay a 13th-month payment.

 

Working Hours

General

In Oman, the standard work week consists of 45 hours per week, nine hours a day. However, work hours are reduced to 30 hours a week, 6 hours a day during Ramadan.

Overtime

All work above the standard weekly hours is paid as overtime and regulated by employment contracts/collective agreements. When an employee is requested to work overtime or on holidays, the maximum is set at 12 hours a day.

All overtime hours in excess of 45 hours a week are paid at an overtime compensation rate of 125% of the employees’ regular wage for daylight hours and 150% for hours worked at night.

Working Week

Sunday–Thursday

 

Leave

Paid Time Off

Employees have the right to an annual leave of 30 days, paid at 100% of their regular salary. Employees earn the entitlement following six months of consecutive employment at one organisation.

Public Holidays

Oman has 10 public holidays.

Sick Days

An employee is entitled to 10 days of sick leave compensated by the employer at 100% of their regular income. Any sickness in excess of two weeks is paid by Social Security at a reduced rate as follows:

  • Week 3-4 of sickness – 75% of their wages
  • Week 5-6 of sickness – 50% of their wages
  • Week 7-10 of sickness– 25% of their wages

Maternity Leave

Per Article 83, Part 5 of the Labor Law of Oman, women working in the private sector are entitled to 50 days of maternity leave covering periods before and after delivery, with compensation at 100% of their regular income. An employee is entitled to maternity leave three times throughout her employment in one organisation. Civil Service Law No. 120/2004 allows female employees working in the public sector to take maternity leave up to five times throughout their service.

Paternity Leave

In Oman, there are no provisions in the law regarding paternity leave.

Parental Leave

There are no provisions in the law regarding parental leave.

Other Leave

  • Bereavement leave: for the death of a father, mother, spouse, sibling, grandparent, or child, an employee is entitled to three days of leave. For the death of an aunt or uncle, two days’ leave is granted. In the event of a working Muslim woman losing her husband, the leave entitlement is increased to 130 days.
  • Wedding leave: an employee is entitled to 3 days.
  • Hajj Pilgrimage: an employees gets 15 days of leave to perform the Hajj Pilgrimage once during their employment, following one year of service.
  • Exam leave: granted to employees in Oman for the opportunity to study in one of the schools, institutes, colleges, or universities. The leave entitlement for study leave is 15 days.
 

Termination

Termination Process

The termination process varies according to the Employment Agreement and the Collective Agreement in place and on the type of contract and reason for termination. Employers must have sufficient ground for terminating an employee and must provide a formal notice period and end-of-service gratuity.

An employer may terminate an employment contract without notice and without payment of end-of-service gratuity on the grounds of gross misconduct in circumstances specified in Article 40 of the Labour Law. An employer may not terminate an employment contract without good cause.

Notice Period

The notice period in Oman is a minimum of one month where the employee receives a monthly salary, and 15 days in all other cases unless a longer period is agreed upon in the employment contract.  All notices must be provided in writing.

Severance Pay

In Oman, employers must pay severance pay based on the employee’s years of service:

  • 15 calendar days’ basic pay for each year of service for the first three years.
  • 30 calendar days’ basic pay for each year of service above three years.

Probation Period

In Oman, probation periods are outlined in the employees’ employment contract/collective agreement. The probation period must not exceed three months.

 

VISA

VISA

Foreigners are usually requested to obtain entry visas to travel to Oman. Visas for Oman are broadly categorised as a tourist visa, employment visa, relative/friend visit visa, family joining/resident visa, investor resident and student resident visa, transit visa.

They can be issued as single-entry, double-entry, or multiple-entry visas for visits up to 90 days in periods of 180 days. The single-entry visa grants one-time entrance, whereas double-entry visa holders may travel twice in predetermined timeframes. A multiple-entry visa allows for consecutive visits to the country.

 

VAT

General

The standard rate of VAT in Oman is 5.00%

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