Table of Contents

Oman

Table of Contents

Currency

Omani Rial (OMR)

Payroll Frequency

Monthly

Employer Taxes

12.50%

About Oman

The Sultanate of Oman is an Arab and Islamic country located on the southeastern coast of the Arabian Peninsula. It shares borders with the UAE, Saudi Arabia, and Yemen. Oman is an absolute monarchy and its current ruler, Sultan Qaboos bin Said al Said, is the third-longest reigning monarch in the world.

Oman is considered a high-income country that is mainly dependent on oil exports. Its petroleum reserves are the 25th largest in the world. It has one of the hottest climates in the world due to its location in the Persian Gulf with summer temperatures that can go up to 40°C (104°F). Wildlife includes the Arabian humpback whale, a species whose endangered status is being highlighted by whale-watching tourism.

Oman has over 4 million people, the majority of whom are Muslim with Christians, Hindus, and Buddhists forming a minority. Its largest city is Muscat with a population of just under 800,000 people.

Employment Relationship

• Permanent Employment

While Oman's Labor Code does not explicitly define permanent employment, it defines casual work as "work that does not by its nature come within the activity practiced by the employer and which does not last longer than six months." It also defines temporary work as "work that by its nature is required to be executed and completed within a fixed period of time."  Contracts that are concluded for an indefinite period of time are considered as permanent. Indefinite term contracts are those that do not have a specific end date or are made for a duration longer than 5 years. Indefinite term contracts can be terminated at any time by either party by giving a notice at least 30 days in advance. 

• Fixed-Term or Specific-Purpose Contracts

Oman's Labour Law allows the use of fixed-term contracts for a duration not exceeding 5 years, renewable by the agreement of the parties. In the event of renewal of the contract, the new period is considered an extension of the original period and is added to it in calculating the total period of service of the employee. If the total duration of the original and renewed contract exceeds 5 years, it is considered an indefinite term or permanent contract.   Employment contracts can also be concluded for specific work and if that takes more than 5 years, they will be considered to be for indefinite term. 

• Temporary Employment Contratcs

Oman's Labour Code does not regulate temporary work and casual work. A Ministerial decision is awaited on the regulation of these, as of December 2023.

Probationary Period

Per Oman's Labor Code, an employee cannot be placed on probation for a period exceeding 3 months if they receive their monthly wages. The probationary period cannot exceed 2 months if the employee receives their wage in any other manner. An employee cannot be placed on probation more than once with the same employer. Also, any probationary period must be included in the service period if the employee has completed it. In all cases, any probationary period must be specified in the employment contract. After a notice of not less than 7 days to the other party, any one of the parties may terminate the contract during the probationary period if it becomes clear that continuation of employment is not suitable.

Working Hours

Oman's new labor law stipulates that the standard workweek is 40 hours per week or 8 hours per day, not including an hour per day for rest and eating. The period of continuous work must not be more than 6 hours. The maximum working hours for Muslim employees during the month of Ramadan are 30 hours per week and 6 hours per day. Working hours for minors cannot exceed 6 hours per day. Employees working more than the standard working hours are eligible for overtime. The total working hours in a day cannot exceed 12 hours, including overtime. 

Holidays / PTO

• Statutory Holidays

Hijri New Year – Date subject to change every year; Prophet’s Birthday – Date subject to change every year; Isra wal Miaraj Night – Date subject to change every year; Renaissance Day – July 23; National Day – November 18-19; Eid-al-Fitr (4 days) – Dates subject to change every year; Eid-al-Adha (4 days) – Dates subject to change every year.

• Paid Annual Leave

Oman's Labor Code entitles all employees to a paid annual leave of 30 days. Employees can only take annual leave once they have worked for their employer for at least 6 months. Employers can grant emergency unpaid leave to the employees who have exhausted their annual leave.  Except for minors' leaves, it is permissible to divide an employee's annual leave per work requirements. Employees who do not utilize their annual leave can accumulate them. They must go on leave for at least 30 days once every 2 years. If the employee agrees to receive compensation in lieu of their annual leave, the employer must pay employees their regular daily wage for any days of annual leave that the employee has not taken. Employees are entitled to receive their regular daily wage for the balance of their annual leave if they leave their employer before exhausting such leave. 

• Sick Leave

Oman's Labor Code entitles employees whose illness is certified to 182 days of annual sick leave. The leave is granted as follows: First 21 days of leave with full pay 21st to 35th day of leave with 75% of gross pay 36th to 70th day with 50% of gross pay 71st to 182nd day with 35% of gross pay. Employers are liable to pay 1% of the employee's wages to the sick leave and extraordinary leave insurance branch of the Social Protection Fund to cover for sick leave benefits. A medical certificate must prove the employee's illness. In cases of dispute, the matter will be referred to the Medical Commission. A sick employee may exhaust their annual leave in addition to the sick leave to which they are entitled.

• Maternity Leave

Oman's new labor law grants 98 days of maternity leave to female employees, during which the employee receives their full salary. This includes 14 days of prenatal leave and 84 days of postnatal leave. There is an option to extend the leave by another 98 days within a year of childbirth as unpaid leave. Employees also get 98 days leave in case of adoption, provided the child is under the age of 3 months. Maternity leave benefits are paid from the maternity leave insurance branch of the Social Protection Fund. Employers are obligated to pay the monthly contributions of the maternity leave insurance branch at the rate of 1% of the wage per month. The amount of benefit paid during the leave is equal to 100% of the employee’s wage.  To be eligible for maternity allowance, the pregnancy must have progressed more than 25 weeks. If the child dies after the 25th week, the insured employee is still eligible for full maternity leave with pay. 

• Paternity Leave

Oman's new labor law introduced a paid paternity leave for 7 days for fathers. This leave must be taken within 98 days of the child's birth. In case of mother's death during childbirth, the remaining maternity leave is transferred to the father. Paternity leave benefits are paid from the maternity leave insurance branch of the Social Protection Fund. Employers are obligated to pay the monthly contributions of the maternity leave insurance branch at the rate of 1% of the wage per month. The amount of benefit paid during the leave is equal to 100% of the employee’s wage.

Termination of Employment

• Notice Period

Per Oman's Labor Code, if an employment contract is for an indefinite duration, either of the parties may terminate it after giving written notice of at least 30 days to the other party. If the contract is terminated without notice, the party who terminates the contract must pay the other party compensation equal to the gross wage for the notice period or the remaining part thereof. A notice of termination issued by the employer to a worker on leave or public holiday will not begin until the day following the end of the leave or holiday. Employers must grant the employees on notice period, 10 hours paid off time per week to search for a new job.   If the contract is for a limited duration, and the parties have continued the contract's execution past its duration, the agreement shall be deemed to have been renewed on the same terms for an indefinite period. If the contract is not renewed, a minimum notice of 30 days is required.  During probation, contracts can be terminated by giving a notice of 7 days.  

• Severance Benefits

Per Oman's Labor Code, employees who are not beneficiaries of social insurance end of service benefits are entitled to an end of service gratuity depending on their employment length. The amount of severance pay is equal to a month's wages for each year of service. The last basic wage of the employee is used for calculation. This end of service gratuity does not apply if the employee is entitled to benefits under the Social Protection Law.