Employment in Oman is governed by the Labour Law issued by Royal Decree 53/2023 and the Social Protection Law issued by Royal Decree 52/2023, with Omanisation rules shaping who can be hired. Here is what employers need to know about leave, pay, social protection and ending employment.
The 2023 Labour Law significantly increased leave entitlements, especially sick and family leave. All paid leave below is at the employee's gross wage unless stated otherwise.
Paid at the gross wage, available after 6 months of service. Up to 30 unused days can be carried forward.
Paid on a sliding scale: full pay for days 1–21, 75% for days 22–35, 50% for days 36–70 and 35% for days 71–182.
Fully paid, covering the periods before and after the birth, with no limit on the number of times it can be taken.
Paid, to be taken within the first 98 days of the child's life.
Set up each Omani leave type in IceHrm with its own accrual, carry forward and approval rules, from annual leave to Hajj and bereavement leave. Employees see their live balance before they apply, and managers see who is away on a shared calendar. Leave management →
The minimum wage is set by ministerial decision and applies to Omani nationals working in the private sector. There is no statutory minimum wage for expatriate employees.
Made up of OMR 225 basic wage plus OMR 100 in allowances.
And 40 hours a week, with at least 2 consecutive rest days. During Ramadan, Muslim employees work up to 6 hours a day or 30 a week.
On the basic wage for daytime and night-time overtime, or time off instead. Total hours may not exceed 12 a day.
Work on a weekly rest day or an official holiday earns an extra 100% of the daily basic wage on top of the normal day's pay, or a substitute day off.
Capture attendance and overtime in IceHrm, including Ramadan working hours, and feed the hours straight into payroll so overtime reflects what was actually worked. Time & attendance →
Oman does not currently tax employment income, so there is no income tax to withhold from salaries today.
| Annual income | Rate |
|---|---|
| Up to OMR 42,000 | 0% |
| Above OMR 42,000 | 5% |
Contributions are paid to the Social Protection Fund. Omani employees are covered by all branches. Expatriate employees are not covered by the pension branches, and new schemes for them are being introduced in phases.
| Branch | Employer | Employee |
|---|---|---|
| Retirement, disability and death | 11.0% | 7.5% |
| Work injuries and occupational diseases | 1.0% | – |
| Job security | 0.5% | 0.5% |
| Maternity and paternity leave | 1.0% | – |
| Sick and exceptional leave | 1.0% | – |
| Total | 14.5% | 8.0% |
For expatriate employees, employers pay the maternity and paternity leave branch (1%) and, since 19 July 2026, the sick and exceptional leave branch (1%). Until the Social Protection Fund's savings scheme for expatriates takes effect, employers pay an end-of-service gratuity to employees not covered by the Social Protection Law (see Ending employment). The savings scheme and work injury insurance for expatriates have both been postponed, with start dates currently expected in 2027 and 2028. Check the fund's latest guidance before budgeting.
Build Omani pay the way you already structure it, with your own salary components, allowances, deductions and formula columns, such as a Social Protection Fund column for Omani staff or a gratuity accrual for expatriates. Want to know how well IceHrm handles payroll calculations for Oman? Contact us or see Payroll →
An indefinite contract can be ended by either party for a legitimate reason with written notice. The 2023 law also allows termination for poor performance, but only after the employee has been told about the problem and given at least 6 months to improve. Dismissals for economic reasons must be notified to the Ministry of Labour in advance and, in some cases, approved by a committee.
| Employee type | Notice |
|---|---|
| Monthly-paid employees | 30 days |
| Other employees | 15 days |
| During probation | 7 days |
Employees who are not covered by the Social Protection Law, mainly expatriates, receive a gratuity of at least one month's basic wage for each year of service, pro-rated for part years and based on the final basic wage. This applies until the expatriate savings scheme comes into force.
A dismissal found to be arbitrary can lead to compensation of between 3 and 12 months' wages. Final pay should include any untaken annual leave.
Most public holidays follow the Islamic lunar calendar, so their dates move each year. The government confirms the exact dates and any bridging days shortly before each holiday. Employees are entitled to their gross wage on official holidays.
Leave groups give each office its own holiday calendar, so you can add each year's announced dates once and every employee in Oman gets the right days off. Holiday calendars →
Employment contracts must be in writing and in Arabic. A contract can be drawn up in another language as long as an Arabic copy approved by both parties is attached. Employers must also follow the Omanisation targets for their sector and the occupations reserved for Omani nationals.
Probation may not exceed 3 months for monthly-paid employees, or 2 months for others, and can only be used once with the same employer. A fixed-term contract becomes indefinite if its original and renewed periods exceed 5 years in total.
Send contracts for e-signing, store contracts, work permits and residence cards on the employee's record, and track onboarding with task lists so nothing is missed on day one. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for Oman, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for Oman? Talk to us.
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