How To Hire And Pay Employees In Oman

Emerald Technology's guide to hiring employees in Oman

CURRENCY

Muscat is the official currency of Oman Its currency symbol is ر.ع., OMR.

CAPITAL CITY

Muscat, Oman's port capital sits on the Gulf of Oman surrounded by mountains and desert.

LANGUAGE

Arabic is the official language of Oman and Modern Standard Arabic is taught in schools.

POPULATION The current population of Oman is 5.223 Million 2021 based on World bank numbers.
PAYROLL FREQUENCY

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

PUBLIC HOLIDAYS Kuwait haspublic holidays.

GROW YOUR TEAM IN OMAN

NO ENTITY, NO PROBLEM

To start growing your team in Oman, you must establish a local entity- including an account with a local bank, a local office and an address registered as a subsidiary. This allows you to manage payroll, tax, benefits and compliance for your employees, but can take several months. 

Emerald can hire and payroll your workers, quickly and compliantly with their ready to go entity. Make growing your team simple with Emerald as a global partner.

PROS AND CONS OF HIRING IN OMAN

In recent times, the Omani government has been changing its local policies to attract foreign investment. Tax exemptions, interest-free loans, free trade zones and more are some simple examples that show 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.  

For  most of the countries in the region, 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. 

WHY OMAN IS GOOD FOR REMOTE WORKERS

Population in Oman are mainly working in a traditional office routine, or as a hybrid working model. Workers have the same rights regardless of their working location. 

There is no income tax in Oman. Omani individuals should contribute with 8% of their salary to Social Security. 

START GROWING YOUR REMOTE WORKFORCE NOW

WORKING TIME AND OVERTIME IN OMAN

The standard work week comprises 45 hours per week (9 hours per day). During Ramadan, work hours are reduced to 30 hours per week (6 hours per day). Any hours worked outside of this must be paid as overtime and regulated by employment contracts / collective agreements. When an employee is asked to work overtime or during holidays, this should not exceed 12 hours per day. All overtime hours in excess of 45 hours per week are paid at an overtime compensation rate of 125% of the employees' regular salary for daylight hours and 150% for hours worked at night. 

ANNUAL LEAVE AND OMAN'S PUBLIC HOLIDAYS

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 PERIOD IN OMAN

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

RESIGNATION AND DISMISSAL IN OMAN

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 day's basic salary
  • 3+ years: 30 calendar day's basic salary

RESTRICTIVE COVENANTS

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.

READY TO HIRE YOUR EMPLOYEES IN OMAN?

CONTRACT OF EMPLOYMENT IN OMAN

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.

OMAN'S MATERNITY LEAVE

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.

SICKNESS LEAVE IN OMAN

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

 

SOCIAL SECURITY

The employer is required to contribute as follows:

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

HEALTHCARE AND INSURANCE

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.

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FOREIGN NATIONALS IN OMAN

Foreign citizens are usually required 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, and transit visa. In the case of the employment visa, the employer must obtain the visa on behalf of its foreign workers (aged 21 or over). Both the employee and employer must meet specific requirements to apply. The visa is valid for two years from the date of entry.
Salary Taxes

MINIMUM WAGE IN OMAN

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'S INCOME TAX

Oman does not have personal income tax.

SALARY PAYMENTS IN OMAN

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

SOCIAL SECURITY CONTRIBUTIONS IN OMAN

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

SOCIAL CONTRIBUTION RATES

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

WORKER MISCLASSIFICATION IN OMAN

Similar to other countries, Oman has strict rules on classifying individual contractors and full-time employees differently. Misclassifying your workers can put your business at risk of fines.

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