How to Hire in Oman

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Hiring in Oman - Brief Overview

Oman provides a stable, business-friendly environment, making it an appealing destination for hiring skilled professionals.

Its strategic location offers convenient access to major markets in the Middle East, Africa, and Asia, facilitating international business opportunities.

The Omani government is committed to economic diversification, focusing on infrastructure and education investments to support workforce development and innovation.

With a growing economy and various investment incentives, hiring in Oman allows access to a talented and motivated workforce while enjoying favorable business conditions

Facts & Stats

Population

5.16 M

Caspital City

Muscat

Languages Spoken

Arabic

Currency

Omani Rial (OMR)

GDP Per Capita

$32,200

Ease of Doing Business

68th in the world

Minimun Wage

OMR 325

Average Wage

OMR 1780

Paid Leave

30 working days of paid annual leave

Labor Laws in Oman

Fundamental Aspects of Hiring in Oman

Omanization 

Omanization is a strategic initiative to increase the employment of Omani nationals in the private sector. This program aims to reduce reliance on expatriate labor and foster a more balanced and sustainable economy. Oman is undergoing a notable demographic transition, with expatriates constituting a significant workforce. 

Under Omanization, private sector companies must meet specific quotas for hiring Omani nationals, with the requirements varying by industry and company size. The government provides incentives for compliance, including preferential treatment in government contracts, while non-compliance can lead to penalties. Employers failing to meet the Omanization quotas may face penalties ranging from OMR 250 to OMR 500 for each Omani employee they were required to hire but did not.

This initiative is central to Oman's vision of economic diversification and development, promoting the integration of local talent into the workforce.

Working Hours in Oman

In Oman, the standard workweek comprises 45 hours, with employees typically working up to nine hours each day. However, during the holy month of Ramadan, working hours are reduced to 30 hours per week, or six hours per day, for employees. According to Omani labor law, the main points regarding working hours are as follows:

  • Employees are required to work up to eight actual hours per day.
  • The total working week should be at most 40 actual hours.
  • During Ramadan, the working hours for Muslim employees are decreased to six hours per day, amounting to a 30-hour workweek.

These regulations set the maximum working hours, though specific hours can vary based on individual employment contracts or company policies.

Minimum Wage Requirements

Oman's minimum wage framework is somewhat unique, with no universal minimum wage applied to all workers. However, specific guidelines establish a minimum threshold for Omani employees in the private sector.

Minimum Wage for Omani Nationals in the Private Sector

Ministerial Decision 13/1979, issued under the former Labour Law (now repealed), set a minimum wage structure for Omani private sector employees. Despite the decision's unclear current legal standing, most employers adhere to these guidelines:

  • Minimum monthly base salary: OMR 225 (approximately USD 585)
  • Mandatory monthly allowance: OMR 100 (approximately USD 260) for housing and transportation

This results in a minimum monthly compensation of OMR 325 (approximately USD 845). These guidelines apply exclusively to Omani nationals in the private sector. There is no mandated minimum wage for expatriate workers in Oman, highlighting the legal distinction between Omani and expatriate workers regarding minimum wage regulations.

Individual Income Tax

Oman does not impose personal income tax on residents or non-residents.

Overtime Pay & Maximum Hours

If an employee works more than the 45-hour weekly limit specified in Article 68, the employer must compensate them for overtime. This includes their basic salary plus an additional 25% for daytime overtime and 50% for nighttime overtime.

Navigating Employment Taxes in Oman

Here's a breakdown of the tax landscape in Oman:

Employer Tax Contributions

8%.

The typical estimation for employee payroll contributions cost in Oman is around 8%.

Employer Tax

12.5%

Employer payroll contributions are generally estimated at an additional 12.5% on top of the employee salary in Oman.

Individual Tax

0%

Oman does not impose personal income tax.

Pension in Oman

Pension in Oman In Oman, employers must contribute 10.5% of their employees' salaries to social security, managed by The Public Authority for Social Insurance (PASI). This system provides pensions and other benefits for insured individuals and their dependents, ensuring financial security and support for workers and their families.

Understanding Employment Termination in Oman

Termination Process

In Oman, the process of terminating employment hinges on the specifics of the employment agreement, the type of contract, and the grounds for dismissal. Employers are required to present legitimate reasons, issue a notice, and deliver an end-of-service gratuity. Immediate dismissal without notice or gratuity is only allowed in cases of severe misconduct; otherwise, a justified cause is necessary for termination.

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Notice Period

In Oman, employees on a monthly salary usually have a one-month notice period. For other situations, a 15-day notice is generally required unless the contract states otherwise. Written notices are compulsory, and no notice is needed during the probation period.

Severance Pay

In Oman, severance pay is calculated based on the duration of an employee's service:

  • For the first three years, employees receive 15 days of basic pay for each year worked.
  • After three years, the severance pay increases to 30 days of basic pay for each additional year of service.

Leaves and Company Policies in Oman

Here's an overview of the various types of leaves and their corresponding regulations:

Annual Leave

In Oman, full-time employees are entitled to 30 days of annual leave. This leave can include public holidays as part of the 30 days or in addition to them, which would otherwise be unpaid.

Public Holidays

Date Day Holiday Name
January 1 Monday New Year's Day
April 8 Monday Eid al-Fitr Holiday
April 9 Tuesday Eid al-Fitr
April 10 Wednesday Eid al-Fitr Holiday
June 15 Saturday Arafat Day
June 16 Sunday Eid al-Adha
June 17 Monday Eid al-Adha Holiday
June 18 Tuesday Eid al-Adha Holiday
July 7 Sunday Islamic New Year
September 15 Sunday Prophet Muhammad’s (PBUH) Birthday
November 18 Monday National Day

Maternity Leave 

Female employees are granted 98 days (approximately 14 weeks) of paid maternity leave. This leave can be taken flexibly before and after childbirth, with a mandatory minimum period to be taken after the birth.

Paternity Leave 

Male employees are entitled to three days of paid paternity leave following the birth of a child.

Sick Leave 

Employees can receive up to ten weeks of paid sick leave annually, with varying pay rates depending on the duration of the leave. The first two weeks are paid in full, the next four weeks at 75%, and the remaining four weeks at 50% of pay. A doctor's note is generally required for absences exceeding three days.

Bereavement Leave 

Employees are entitled to paid leave for certain personal or family circumstances, including three days for their own marriage, three days for the death of a spouse, parent, child, sibling, or grandparent, and two days for the death of an aunt or uncle.

Study Leave 

Omani nationals studying within the country may receive 15 days of paid leave per year for examination purposes.

Paid Time Off 

Employees in Oman are eligible for 30 days of annual leave with full pay after six months of continuous employment with one organization. They receive their full regular salary during this leave, and any unused leave can be carried over to the following year.

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Frequently asked questions

1. What makes Iris unique for hiring in Oman?

Iris offers an advanced AI talent intelligence platform with features like an AI job description generator, AI video interviews, and an advanced applicant tracking system (ATS). Additionally, Iris supports personalized outreach and payroll management, making it a comprehensive solution for hiring skilled professionals in Oman.

2. Why is Omanization important for employers?

Omanization is a national initiative to increase the employment of Omani nationals in the workforce. For employers, Omanization is crucial as it aligns with government regulations and national employment targets, promoting social and economic stability. Compliance with Omanization quotas can lead to benefits such as preferential treatment in government contracts and business incentives. Also, fostering local talent helps build a skilled and loyal workforce, enhancing the company’s reputation and contributing to sustainable growth within Oman.

3. What are the key labor laws employers should know in Oman?

Employers in Oman should be familiar with the Oman Labor Law, which regulates employment contracts, working hours, wages, and occupational safety. Key aspects include a maximum of 48 working hours per week, mandatory overtime pay, and protection against workplace discrimination. Additionally, the law outlines specific regulations for hiring and terminating employees, ensuring fair treatment and proper compensation.

4. How does termination of employment work in Oman?

Termination of employment in Oman must comply with the stipulations of the Oman Labor Law. Employers can terminate an employee for valid reasons such as poor performance, misconduct, or redundancy, and they must provide a written notice. The notice period typically ranges from one to three months, depending on the length of employment. In the case of unjust termination, employees may be entitled to compensation. End-of-service benefits, calculated based on the employee's length of service, must also be provided.

5. What are the leave policies and entitlements in Oman?

In Oman, employees are entitled to various types of leave, including annual, sick, and special leave for emergencies. Employees earn 30 days of paid annual leave after one year of service. Sick leave is granted based on a medical certificate, with up to 10 weeks of paid leave per year. Additionally, employees are entitled to leave for personal emergencies, maternity leave (50 days with full pay), and paternity leave (one week). Public holidays are also recognized as paid leave days.

6. How can I get started with Iris for hiring in Oman?

To start with Iris for hiring in Oman, you can book a demo or sign up directly through the platform. Iris offers a range of benefits to help you streamline the hiring process. From job description generation to payroll management, Iris makes building a team of skilled professionals in Oman easier.