Payroll and Benefits Guide Oman

Employer

Employer Payroll Contributions

Employee

Employee Payroll Contributions

Employee

Employee Income Tax

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 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.

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. Overtime expectations should be stated in the employment agreement. It is not possible to include overtime pay within the salary. Managers are exempt from overtime limits and do not need to receive additional pay.

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

Annual Leave (vacation)

Employees have the right to an annual leave of 30 calendar days paid at 100% of their regular salary. Employees earn the entitlement following six months of consecutive employment at one organization. Unused leave can carry over into the next year.

Public Holidays

The local government decides each year if holidays falling on the weekend are lost or moved to a working day in lieu.

Religious holidays are determined by the lunar cycle and will show as tentative until they are confirmed nearer the date of the holiday.

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 organization.

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 employee 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 Process

The termination process varies according to the employment and collective agreement in place and on the type of contract and reason for termination. Employers must have sufficient grounds 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 Labor 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. During the probation period, there is no notice period required.

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 employee’s employment contract/collective agreement. The probation period must not exceed three months. During the probation period, no notice is required.

VISA

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

General

The standard rate of VAT in Oman is 5%.