Oman, officially known as the Sultanate of Oman, is a country on the Southeastern coast of the Arabian Peninsula. It is bordered by Yemen, Saudi Arabia, and the United Arab Emirates, as well as the Arabian Sea and the Gulf of Oman. 

With a diversified and growing economy and an average GDP of 108.81 billion US dollars (2023), Oman is an attractive location for companies looking to expand abroad. They are based at the crossroads of Asia, Africa, and the Middle East, providing access to a range of major shipping routes and neighbouring markets, and have a workforce of young, well-educated people, with a reported total of 2.6 million people (2024).

This guide will provide a thorough overview of Oman’s labor laws, mandatory employee benefits, and supplementary benefits that will help companies to hire in Oman. We’ll also explain how Remote People can simplify doing business in Oman, predominantly via Employer of Record services that ensure workers in Oman are hired legally and compliantly.

Oman Employment Laws

The Labor Law of Oman is primarily governed by the Labor Law – Royal Decree No. 53/2023. This legal framework explains the rights and obligations of both employers and employees, ensuring a fair working environment and setting rules around working hours, overtime, leave entitlement, and termination.

Other relevant acts concerning Omani labor law include the following:

  • Social Protection Law – Royal Decree No. 52/2023
  • Regulation of the Employment of Foreign Workers
  • Occupational Safety and Health Regulations
  • Wage Protection System Regulation
  • Omanisation and Labour Market Regulations
  • Dispute Resolution & Labor Court Procedures

We strongly recommend that companies consult with legal professionals before finalizing employment contracts to ensure that all information is compliant with Omani labor laws.

Mandatory Employee Benefits in Oman

Oman has a range of mandatory employee benefits that employers must adhere to when hiring in this country. We’ve provided information on some of these in detail in the sections below.

Social Security Contributions

Oman’s Social Protection Fund provides financial support to people who require additional help. This is usually offered in the form of old-age benefits, pensions, disability benefits, and family income support.

The social security rate in Oman is 17.5%, which is split between employees (Omani nationals only) and employers. Employees pay 7% of their monthly salary, while employers pay the remaining 10.5%. Employers are also responsible for paying 1% of the employee’s salary towards insurance for work-related injuries.

Annual Paid Leave

Employees in Oman are entitled to a minimum of 30 days of paid annual leave. Workers become eligible for paid annual leave once they have completed at least 6 months of continuous service with the same employer.

Annual leave is paid at the employee’s full rate of pay, and unused leave can be carried over to the following calendar year – companies usually have a cap on how many days can be carried over.

Working Hours

Standard working hours in Oman are 8 hours per day or 40 hours per week. Most employees have an average work week of 6 days, with Friday being an official rest day in Oman.

Hours are generally reduced during Ramadan, with workers having a reduced schedule of 6 hours per day or 30 hours per week. Daily hours are limited to a maximum of 12 hours per day (including overtime hours).

Overtime Pay

Employees in Oman who work beyond their contracted hours must be paid compensatorily for all overtime hours worked. Overtime worked between 5 am – 9 pm must be paid at a minimum rate of 25% over the employee’s regular wage, or 75% if the hours are worked between 9 pm – 5 am.

Mandatory overtime issued on a rest day or public holiday should be paid at a minimum of double the rate of worker’s normal wage, or time off in lieu should be given. Workers between the ages of 15 – 17 are not permitted to work overtime.

Public Holiday Leave

There are many public holidays in Oman which entitle workers to a paid day off, provided that they fall on a working day. The public holidays in Oman are:

  • New Year (January 1) 
  • Sultan’s Accession Day (January 15) 
  • Isra and Mi’raj Holiday (January 18) 
  • Eid al‑Fitr (March 20) (date varies)
  • Eid al‑Fitr Holiday (March 21) (date varies)
  • Eid al‑Fitr Holiday (March 22) (date varies)
  • Eid al‑Fitr Holiday (March 23) (date varies)
  • Arafat Day (May 27) (date varies)
  • Eid al‑Adha (May 28) (date varies)
  • Eid al‑Adha Holiday (May 29) (date varies)
  • Eid al‑Adha Holiday (May 30) (date varies)
  • Eid al‑Adha Holiday (May 31) (date varies)
  • Hijri New Year / Muharram Holiday (June 18) (date varies)
  • The Prophet’s Birthday / Mawlid Holiday (August 27) (date varies)
  • National Day (November 25) 
  • National Day Holiday (November 26) 

Sick Leave

Employees in Oman are entitled to sick pay if they are absent from work due to illness. This is limited to 182 days of sick leave per year, which varies in pay depending on duration:

Sick Leave DurationPay Rate
First 21 days100% pay
Days 22 – 3575% pay
Days 36 – 7050% pay
Days 71 – 18235% pay

Both Omani nationals and expatriate employees are entitled to sick leave. If an employee is unfit for work at the end of the 182 days of sick leave, their employer can terminate their contract.

Maternity Leave

Female workers in Oman are entitled to paid maternity leave when they have a baby. Maternity leave in Oman is 98 days of fully paid leave, which includes 14 days that can be taken before birth. Both Omani and non-Omani workers are eligible for maternity leave. There is no limit on the number of times an employee can take maternity leave.

Paternity Leave

Male employees in Oman are eligible for 7 days of fully paid paternity leave if they have a child. Paternity leave must be taken within 98 days of the child being born and is paid by the employer, who will be compensated by the Social Security System.

Pensions

Oman’s pension system was reformed in 2023, combining public and private schemes into one system. The system covers all Omani nationals in the public and private sectors, plus self-employed Omani workers and certain residents.

It requires contributions of 7% from employees and 13% from the employer, and provides a full pension after 15 years of service. The pension age in Oman is 60 for men and 55 for women.

Severance Pay

Workers may be eligible for severance pay, also known as end-of-service gratuity, if they have been dismissed without employee misconduct being present. This is calculated as 15 days of basic pay per year for the first three years of service, and 30 days of basic pay per year thereafter.

Severance pay applies to both Omani nationals and foreign employees, and employees may also be eligible for compensation if they have been unfairly dismissed.

Supplementary Employee Benefits in Oman

It’s recommended that employers offer supplementary benefits to their employees to enhance job opportunities and increase staff retention rates.

Some examples of additional benefits that you could offer your workers include:

  • Performance bonuses
  • Company car
  • Flexible working
  • Private pension opportunities
  • Enhanced leave entitlement
  • Advanced training schemes
  • Transport, housing, or food allowances

Optimize Employee Benefits with Remote People

Remote People offers a range of services to help streamline hiring in Oman. These include our Employer of Record (EOR) services, where we act as the legal employer for your workers in Oman—ensuring they are hired in full compliance with local laws and receive all entitled benefits.

Our EOR solution can save your business significant time and reduce the financial complexities often involved in hiring abroad. We can also help you find the best talent for your business with our recruitment services.

Our team is fluent in the local language, knows the best places to advertise your job openings, and can design competitive compensation packages to help you set a great first impression with new recruits.

Our PEO services are another element to think about, whereby we can help streamline your HR, payroll, and business compliance to ensure smooth management at every stage.

Contact Remote People today to see how we can help you hire employees in Oman.