Definitive Guide to Hiring in Oman

Hiring in Oman

Hiring employees compliantly in Oman means doing it yourself or using an Employer of Record like Global Expansion. You should be careful using independent contractor agreements in Oman so that you don’t run afoul of employment laws. To hire an employee compliantly and offer them mandatory benefits and compliant agreements, you can:

(a) Establish your own new legal entity, banking, accounting and payroll service in Oman; or

(b) use an Employer of Record like Global Expansion who can handle all of the details for you.

Labor Laws in Oman

Employment laws in Oman are uniquely suited to the country’s way of life, and crucial to understand if you want to employ local talent in this country. Get the details on Oman employment laws and Oman policies here.

Employee Probation Period

Annual Leave in Oman

Holidays in Oman

Maternity Leave Oman

Paternity Leave Oman

Sick Leave in Oman

• In general, employees are entitled to 10 weeks of sick leave per year. 
• Sick leave is usually paid as follows:
  • First two weeks of leave: 100% of wages
  • 3rd and 4th weeks of leave: 75% of wages
  • 5th and 6th weeks of leave: 50% of wages
  • 7th through 10th weeks of leave: 25% of wages

Working Hours in Oman

Overtime in Oman

Termination of Employment in Oman

• Termination under Oman's Labor Law can only be made under specific exclusive grounds., such as grave violations of the terms of the employment contract, unauthorized absence for ten (10) consecutive day or health conditions which prevent the employee from doing his work. 
• Force Majeure does not apply as a principle to employment contracts and employers are not permitted to unilaterally terminate an employment contract unless for the reasons and grounds provided in the Labor Law.

• Employees working under a fixed term contract should be given 30 days’ notice if there is no intention to renew the contract, along with the reason for non-renewal. 
• Failure to provide notice may result in a lawsuit by the employee.
• Employees working under indefinite term contracts are also entitled to 30 days’ notice of termination. Such termination should be for “reasonable and fair” cause with documentation.

• At the end of a contract, employees are generally eligible for an indemnity payment. 
• This is usually paid as follows:
  • Up to three years of employment: 15 days’ pay per year worked
  • More than three years of employment: one month’s salary per year worked.

Notice Period in Oman

• Employees working under a fixed term contract should be given 30 days’ notice if there is no intention to renew the contract, along with the reason for non-renewal. 
• Failure to provide notice may result in a lawsuit by the employee.
• Employees working under indefinite term contracts are also entitled to 30 days’ notice of termination. Such termination should be for “reasonable and fair” cause with documentation.

Severance in Oman

• At the end of a contract, employees are generally eligible for an indemnity payment. 
• This is usually paid as follows:
  • Up to three years of employment: 15 days’ pay per year worked
  • More than three years of employment: one month’s salary per year worked.

Oman Salary and Wages

13th/14th Month Salary in Oman

• No
• There is no statutory requirement to pay the 13th or the 14th month salary.
• However, employees are entitled to 30 days leave after working for 6 months.

• A 17.5% social security contribution is applicable to employees who are Omani nationals, but not to expatriate employees. 
• The employee pays a contribution of 7% of salary, and the employer pays the balance of 10.5%.
• The employer is also required to contribute for insurance for work related injuries in the amount of 1% of the salary of the employee. 
• This brings the total monthly social security and insurance contributions to be made by the employer to 11.5%.
• From January 2021, employers and Omani employees are each required to make a monthly salary contribution at the rate of OMR 1 per OMR 100 of monthly salary (or 1% of payment) as part of the job security scheme implemented.
• This brings the total social security contribution to 20.5% of which the employee pays a contribution of 8% and the employer pays the balance of 12.5%

Employment visas

• Employers must obtain employment visas for their expatriate employees aged 21 or older to enter Oman. 
• The application process requires a labor clearance from the Ministry of Manpower. 
• The ministry reviews the labor clearance request from the employer and considers whether the position meets with approval criteria, which includes the level of Omanization (nationalization) achieved or planned. 
• The duration of employment visas is limited to two years from the date of entry. 
• Applicants may not work in Oman until all papers are completely processed. 
• The employment visa must be used within three months after the date of its issuance.
• Individuals holding employment visas in Oman must not stay outside Oman for more than six months. 
• However, this rule does not apply to family members of employment visa holders. 

Value Added Tax (VAT) in Oman

Mandatory Benefits in Oman

• These are mandatory benefits as postulated by law
• These include probationary period, annual leave, public holidays, sick leave, maternity leave, overtime pay, notice period, and severance pay
• Statutory benefits also include social security benefits

Payroll Accrual in Oman

Country Accruals Additional Information

Description

Social security contributions are not applicable for non-GCC nationals working in Oman. This page does not discuss social security provisions as applicable to Omanis and GCC nationals and which can be requested separately.

Job Security Fund has been established to support Omanis whose services have been terminated and job seekers. Non-Omanis are not entitled to any benefit from the Fund. Specified contributions for employers and Omani employees are provided as per the regulations governing the Fund.

Payroll Accruals Additional Information

Accrued Benefits in Oman

Why use Global Expansion to hire in Oman

Establishing a branch office or subsidiary in Oman can be time-consuming, expensive and complex. With such a robust labor market in place, one must pay great attention to detail when structuring employment because Oman labor laws are complex.

The company also has a responsibility to comply with specific employment practices dictated by Oman law to maintain its good standing as an equal opportunity employer.

Global Expansion makes it easy for you to expand into Oman. We'll help you hire your candidate of choice, handle HR matters and payroll, and ensure that you comply with local laws without the burden of setting up a foreign branch office or subsidiary. In addition, you'll have complete control and direction over your employees.

We enable you to stay in control of everything. Our Oman Global Professional Employer Organization (PEO) and Employer of Record (EOR) solution provides you with peace of mind to focus on running your company and the security to enter new markets.