Hire Employees in Oman

Your own entity is normally an LLC. Registration with the Social Protection Fund is a priority from the first Omani hire, because SPF compliance feeds directly into Omanisation quota credits and therefore into expatriate permit entitlement.

An Employer of Record inverts the sequence: the Omani entity signs the Arabic contract, registers with the SPF, applies the correct gratuity formula to each period of service and manages the Omanisation position — while you direct the day-to-day work.

Oman is mid-way through the largest restructuring of its employment framework in decades, with two major provisions deferred in 2025. That transition is itself a reason to carry the relationship externally while it settles.

Oman is mid-way through the largest restructuring of its employment framework in decades, and two major provisions were deferred in 2025. The Social Protection Law replaced PASI on 1 July 2023 and for the first time brought expatriates into mandatory coverage. Royal Decree 60/2025, issued on 13 July 2025, then pushed the expatriate savings scheme from July 2026 to 19 July 2027, and work injury cover for non-Omanis was separately postponed.

The practical consequence is that anything provisioned on the original 2026 dates is premature, and anything modelled on the pre-2023 PASI regime is obsolete. Both errors are common in current guidance.

Today, an Omani national attracts 13.5% of basic wage to the Social Protection Fund. An expatriate attracts work injury cover plus an accruing end-of-service gratuity. From 19 July 2027 the employer will contribute 9% of basic wage to an SPF-managed provident fund for expatriates, replacing the lump sum — a change in both timing and cash flow that is worth planning for now.

SPF registration also feeds Omanisation quota credits, which in turn determine how many expatriate work permits an employer may hold. Failing to enrol Omani staff therefore costs permits, not just penalties — a connection foreign employers rarely anticipate.

Break-even rule of thumb: EOR fees begin to exceed the running cost of a small Omani entity somewhere between 15 and 20 employees. Model both before committing — see EOR vs Entity for the full comparison, and plan any later migration so employees keep seniority.

For an Omani national, 13.5% of basic wage to the Social Protection Fund. For an expatriate, work injury cover plus an accruing end-of-service gratuity. The SPF replaced PASI on 1 July 2023 and for the first time brought expatriates into mandatory coverage.

Two deferrals matter for planning. Royal Decree 60/2025, issued on 13 July 2025, pushed the expatriate savings scheme from July 2026 to 19 July 2027, and work injury cover for non-Omanis was separately postponed. Anything provisioned on the original dates is premature; anything modelled on pre-2023 PASI is obsolete.

From 19 July 2027 the employer will contribute 9% of monthly basic wage to an SPF-managed provident fund for expatriates, replacing the lump-sum gratuity. That converts a back-loaded liability into a monthly cost — easier to budget, harder to defer.

Three separate schemes are phasing in on three different dates, and all three were postponed in July 2025. Sick leave and unusual leave insurance starts on 19 July 2026 at 1% of gross salary with no ceiling, employer-paid. The compulsory savings system for expatriates starts on 19 July 2027 at 9% of basic salary, employer-funded, replacing the end-of-service gratuity and carrying a guaranteed 2% minimum return. Work injury insurance for non-Omani workers was pushed all the way to 19 July 2028. Treating these as one change is wrong on both the dates and the components. Separately, the gratuity itself already changed: since 31 July 2023 expatriates accrue a full month of basic salary per year of service rather than 15 days for the first three years. And Oman becomes the first GCC state to levy personal income tax — 5% above OMR 42,000 a year from January 2028.

Four representative profiles, costed with the 2026 contribution rates above. Salaries are illustrative market midpoints, not GX operating data — use them to see how the on-cost percentage behaves as pay rises, not as a salary benchmark for a specific role. For real market data on your roles, ask for a costing.

Nothing here is capped, so the on-cost percentage is identical at every salary level. A senior hire costs proportionally exactly what a junior one does, which is not true in most comparable markets and makes salary the only variable worth modelling.

Four representative profiles costed on 2026 statutory rates. Salaries are illustrative market midpoints, not GX operating data.

Payroll runs monthly in rials. There is no personal income tax on employment earnings, so nothing is withheld from gross for tax.

SPF contributions are calculated on basic wage rather than total package, and the employer must review and update salary information every month, with the system computing the amount due. Payroll changes therefore need reporting promptly rather than reconciled at year end.

Because both contributions and gratuity are calculated on basic wage, the split between basic and allowances affects two liabilities simultaneously. Oman also has a multilateral arrangement covering GCC citizens but no bilateral agreements with any other country.

Thresholds and ceilings are uprated periodically, so a figure correct in January may not hold later in the year. Where a row below is flagged, published sources disagreed and the conflict is recorded rather than resolved.

Thresholds move on a local cycle that does not always fall in January, so a figure correct at the start of the year may not hold through it. Where a row below carries a flag, published sources disagreed and the conflict is recorded rather than resolved — there are 2 such rows on this page.

The sections that follow set out contracts and probation, working time, leave, termination and immigration in that order. Where an entitlement comes from a collective agreement rather than statute it is marked as such, because that distinction determines whether it is negotiable.

A written contract in Arabic is required and registered with the Ministry of Labour, with Arabic governing where a translation differs.

Probation is three months for most roles. Complete salary histories and accurate service dates matter more here than in most markets, because the gratuity calculation depends on precisely when each period of service fell relative to 31 July 2023.

That record-keeping requirement is not administrative housekeeping. Gaps accumulated over years of employment cannot be reconstructed reliably, and the error only surfaces at exit when it is hardest to resolve.

Eight hours a day and forty-five a week, reduced during Ramadan. A midday outdoor work ban applies in summer months. Overtime carries a premium set by the Labour Law, with higher rates for rest days and public holidays.

Overtime is where payroll disputes usually start. Record hours from day one even where the role is salaried and the expectation is that overtime will not arise — reconstructing records after a complaint is far harder than keeping them.

Overtime is where payroll disputes usually begin, and the burden of proving hours worked generally sits with the employer. Record hours from the first day even for salaried roles where overtime is not expected — reconstructing a record after a complaint is considerably harder than keeping one.

Public holidays sit on top of the annual leave entitlement. Where a holiday falls at a weekend, practice varies — some markets move it, some grant a substitute day and some do neither, so check the position before assuming a day in lieu.

The 13 dates below are the statutory position. Employers in many markets grant more by policy or collective agreement, and sector agreements sometimes add local or patronal days that do not appear in a national list.

Oman observes 13 paid public holidays in 2026. Dates that fall at a weekend and any substitution rules are set out below; entitlement is separate from annual leave.

Maternity: 98 days — Now extended to non-Omani workers under the Social Protection Law, with benefits paid by the government. Paternity: 7 days — Also extended to non-Omani workers. Sick leave: Up to 182 days on a sliding scale of pay — Sick and other leave insurance now covers non-Omani workers, providing wage support during certified absences. Ramadan hours: 6 hours a day and 30 a week — For Muslim employees.

Work injury: Daily allowance until recovery or stabilisation — Wages are suspended and the fund pays the allowance instead, under Article 98 SPFL.

The question that matters for budgeting is who funds each entitlement. Where the state or a social insurance fund pays, the employer carries administration but not cost; where the employer pays, it is a direct charge that headcount models routinely omit. Both patterns appear above.

The 31 July 2023 split is the single most consequential detail in Omani payroll. Service before that date is calculated under the old formula — 15 days' basic wage for each of the first three years, then one month a year. Service from that date is one full month's basic wage for every year, under Article 61 of Royal Decree 53/2023.

An employee whose tenure spans the date needs both formulas applied to their respective periods. The Ministry of Labour confirmed this in an October 2024 clarification. Applying a single formula across the whole tenure produces a wrong settlement in one direction or the other, and the error surfaces at exit when it is hardest to resolve.

That makes record-keeping unusually important here. The calculation depends on complete salary histories and precise service dates, and gaps accumulated over years cannot be reconstructed reliably.

Omani nationals in the SPF scheme receive social insurance in place of gratuity, so the two do not stack.

Expatriates need an employer-sponsored labour clearance and residence card. Allow two to three months.

Omanisation quotas apply by sector and determine how many expatriate permits an employer may hold. SPF registration failures cost quota credits, so an administrative lapse on the national side directly reduces expatriate hiring capacity — a connection foreign employers rarely anticipate.

Certain roles are closed to expatriates entirely, and the list is periodically extended, so the position should be checked at the point of offer rather than carried forward from a previous hire.

The 31 July 2023 split is the single most consequential detail in Omani payroll. Service before that date uses the old formula — 15 days’ basic wage for each of the first three years, then one month a year. Service from that date is one full month per year under Article 61 of Royal Decree 53/2023.

An employee whose tenure spans the date needs both formulas applied to their respective periods, as the Ministry of Labour confirmed in an October 2024 clarification. A single formula across the whole tenure produces a wrong settlement in one direction or the other.

Practical controls: record the exact service start date at onboarding, track the pre- and post-July 2023 portions separately in the gratuity provision, register Omani staff with the SPF promptly to protect quota credits, and plan on 19 July 2027 for the expatriate savings scheme.

Work backwards from the start date. For someone already resident, one to two weeks is realistic. A new expatriate hire adds two to three months for the labour clearance and residence card.

Confirm before making an offer: the candidate's nationality, which determines the entire contribution position; the Omanisation quota position, which governs whether an expatriate permit is available at all; and the exact service start date, recorded precisely, because the gratuity calculation turns on which side of 31 July 2023 each period falls.

SPF registration is required before the first payroll for Omani nationals. Salary information must then be reviewed and updated monthly, with the system computing the amount due — so payroll changes need reporting promptly rather than at year end. Oman is also the only GCC state permitting union committees and collective bargaining, under Royal Decree 113/2011.