How To Hire And Pay Employees In Oman

In recent times, the Omani government has been changing its local policies to attract foreign investment. Tax exemptions, interest-free loans and free trade zones are some simple examples of why Oman might be a good expansion territory in the Middle East region.

Considered a gathering spot of African and Asian empires, the country’s geographic location and 1700km long coastline has helped its economy grow steadily for several years.

As in most countries in the Middle East, business traditions and hierarchy are very important and should always be respected. English is commonly used in business settings.

For Omani nationals, employers need to pay 12.5% contributions to Social Security and 1% for insurance to work-related issues. This is not applicable to expatriates.

Following six months of continuous service at one organisation, employees are entitled to 30 days' annual leave, paid at 100% of their regular salary. In addition to this, Oman has 9 public holidays.

January 1st: New Year's Day 
March 1st: Lailat al Miraj
May 1st: Eid al-Fitr
July 9th: Eid al-Adha
July 23rd: Renaissance Day 
July 30th: Islamic New Year
October 9th: Milad un Nabi
November 18th: National Day 
November 18th: Birthday of HM Sultan Qaboos

Probation periods in Oman must be detailed in the employee's employment contract and should not exceed three months. 

The termination process varies according to the employment contract in place and on the type of contract and reason for termination. Employers must have reasonable grounds for terminating an employee. All notices must be provided in writing. When dismissing an employee, employers must grant severance pay based on the employee's length of service. 

• 0-3 years: 15 calendar days' basic salary
• 3+ years: 30 calendar days' basic salary

It is permissible to have restrictive covenants contained in the contract of employment, provided that the employee has become acquainted with the employer's clients or confidential information and the covenants are reasonably drafted in relation to duration, geographic scope and the nature of the business to be protected. Parties are permitted to include a liquidated damages clause in the contract of employment, as it is not possible to obtain an injunction in Oman. Non-compete clauses typically last no longer than 6-12 months, and customer non-solicit clauses no longer than 12-24 months. Employee non-solicits are also permissible and should last no longer than 12-24 months.

The Omani contract of employment must be written in Arabic, or a translation must be formalised and notarised in Arabic. Though a written contract is not required, it is advisable and must contain the following:

• Name of the employer, establishment and address of work
• Name of the worker, date of birth, qualifications, occupation, place of residence and nationality
• Nature and type of work
• Period of contract
• Basic salary and any allowances or advantages
• Suitable period of notice to terminate the contract

An additional legal requirement for a valid employment contract is to respect the Islamic religion, laws of the country, customs and social traditions in Oman. Employment contracts in Oman can be fixed or indefinite. Fixed contracts automatically conclude on the date of termination or expiry date, although may be deemed to be renewed with the same terms if both parties continue the employment arrangement as if it were still in place.

Women working in the private sector are entitled to 50 days’ 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. There are no provisions in Omani law regarding paternity leave.

An employee is entitled to 10 days’ sick leave at 100% of their regular income, paid by their employer. Any further sick leave is paid by Social Security at a reduced rate as follows:

• Week 3-4: 75% of basic salary
• Week 5-6: 50% of basic salary
• Week 7-10: 25% of basic salary

The employer is required to contribute as follows:

• Social security: 10.5%
• Occupational Injury and Disease: 1%
• Job Security Fund: 1%

The Ministry of Health offers free universal health care to all Omani nationals and expatriates working in the government sector, including access to mental health services and associated medicines. The expatriate workforce in the private sector is mostly covered by employer-provided insurance. Other common benefits Omani employees may expect include an education allowance, mobile phone, Ramadan and Eid allowances, travel allowance, and housing allowance.

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.

Oman does not have personal income tax.

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

The employee contribution contributes 7% of their salary to Social Security, in addition to the employer contribution of 10.5%

The employee contributes 1% of their salary to the Job Security Fund, in addition to the employer contribution of 1%.