Gloroots' Oman EOR (Employment Of Record) solution provides valuable insights for businesses seeking to expand their presence in Oman, all without the need to establish a subsidiary or branch office. Our efficient and dependable comprehensive business solutions streamline your expansion efforts, encompassing employee recruitment, payroll management, and invoice handling.

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Gloroots' Global Employment Platform offers a comprehensive solution for your business expansion needs, delivering top-notch support through our extensive international network.

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Using an Oman EOR (Employment Of Record) or PEO (Professional Employer Organization) service can be a game-changer for businesses looking to expand into Oman.

When expanding into Oman, employers face two hassles - setting up a local entity and ensuring employees are compliant with local labor laws.

A simplifies market entry by skipping the need to set up a legal entity, which saves you time and hassle. Moreover, Oman has labor laws different from your base country. For example,  to stay compliant with a policy called Omanization, employers must ensure a certain local:expat ratio in their workforce. The ratio varies with each sector. Secondly, on terminating employment, expatriate employees are entitled to an end-of-service gratuity, which is calculated based on the length of service and the employee's final salary.

By mitigating compliance risks, and helping you spend more time on your core business, EOR/PEO services make exploring Oman's market a smoother journey for employers.

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scope of services required. Typically, Oman EOR/PEO services follow a pricing structure that includes a monthly fee per employee or a percentage of the employee's salary. Additional charges may be applicable for any extra services or customization required.

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Key Metrics For Foreign Employers

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The table below depicts key indicators from the Global Talent Competitiveness Report for employers wishing to hire from Oman.

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Source: The Global Talent Competitiveness Index 2023

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Through the Gloroots’ Recrew platform, you can discover amazing talent in Oman.

Properly classifying your employees is crucial for smooth business operations in Oman. Getting it wrong can lead to legal trouble and financial issues. To steer clear of these risks, it's a smart move to partner with a trusted PEO/EOR in Oman.

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With a reliable PEO/EOR by your side, you can navigate Oman's labor laws effortlessly, ensuring that your employees are classified correctly and that you stay compliant. These experts handle payroll, manage benefits, and make sure your workforce gets the legal protection and benefits they're entitled to. This allows you to focus on your core business while leaving employment-related responsibilities in capable hands in Oman.

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In 2001, Oman set up the Ministry of Manpower, responsible for labor laws. These laws apply to both Omani and expatriate employees in private and government sectors. 

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The Ministry of Manpower in Oman plays a crucial role in making and enforcing labor laws and regulations. They work with the government, business owners, and the workforce to manage the labor market.

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Employment contract

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When hiring an employee in Oman, it's a legal requirement to have a written contract, and it must be in Arabic. If the contract is in another language, both parties should receive a copy, and at least one copy should have an Arabic translation attached.

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The employment contract must contain the following details:

1. Company name and address.

2. Worker's name, date of birth, qualifications, and profession.

3. Worker's place of residence.

4. Nature and type of work.

5. Contract duration.

6. Basic salary or benefits.

7. Adequate notice period before termination.

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Regarding employment contract types in Oman:

• A fixed-term contract involves specifying a particular task to be completed within a set timeframe. It automatically ends on the agreed-upon expiry or termination date, with a maximum duration of five years.
• An indefinite contract doesn't have a predefined termination period. It concludes when both parties mutually agree or when the employer provides prior notice to the employee.

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Overtime

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Any work performed beyond the regular weekly working hours qualifies as overtime and is subject to regulation through employment contracts or collective agreements. If an employee is asked to work overtime or on holidays, the maximum limit is set at 12 hours per day. The expectations regarding overtime should be clearly mentioned in the employment contract, and it's not permissible to include overtime pay as part of the regular salary. Managers are exempt from overtime restrictions and are not entitled to additional compensation.

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For overtime hours exceeding 45 hours per week, employees receive extra pay calculated at a rate of 125% of their standard wage for daytime hours and 150% for nighttime hours.

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Minimum wage

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In Oman, the minimum monthly wage is 325 OMR, with a requirement that 225 OMR constitutes the base salary, while an additional 100 OMR is designated as a bonus.

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Annual leaves

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Employees are entitled to 30 calendar days of annual leave, during which they receive their full regular salary. 

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This entitlement accrues after six consecutive months of employment with a single organization, and any unused leave can be carried forward into the following year.

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Maternity Leave and Paternity Leave

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As per Article 83, Part 5 of Oman's Labor Law, female employees in the private sector have the right to 50 days of maternity leave, which encompasses both pre and post-delivery periods. During this leave, they receive full compensation equivalent to their regular income. An employee can avail maternity leave on three occasions during her tenure with a single organization.

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Under Civil Service Law No. 120/2004, female workers employed in the public sector have the option to take maternity leave up to five times during their service.

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Sick Pay

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An employee has the right to 10 days of sick leave, during which the employer provides full compensation equivalent to their regular income. 

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However, if the sickness extends beyond two weeks, Social Security steps in to cover it, but at a reduced rate.

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Income tax 

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Oman does not have personal income tax.

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Other Taxes and Social Security contribution:

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Termination Process:

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The termination procedure differs based on factors like the employment agreement, collective agreement, contract type, and the cause for termination. Employers are required to have valid reasons for terminating an employee and must adhere to formal notice periods and provide end-of-service gratuity.

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In cases of severe misconduct as outlined in Article 40 of the Labor Law, an employer can terminate an employment contract without notice and without paying end-of-service gratuity. However, employers cannot terminate employment contracts without valid reasons.

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Notice Period:

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In Oman, the notice period is typically one month for employees receiving a monthly salary, while it's 15 days for all other cases, unless the employment contract specifies a longer notice period. All notifications must be in written form. Notably, during the probationary period, no notice period is mandated.

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Severance Pay

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In Oman, employers are required to provide severance pay to employees, calculated according to their years of service:

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For the initial three years of service, it's equivalent to 15 calendar days' worth of basic pay for each year worked. For years of service exceeding three years, the calculation is 30 calendar days' basic pay for each year worked.

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Probation Periods

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In Oman, probationary periods are specified within the employee's employment contract or collective agreement. These probation periods cannot extend beyond three months in duration. Importantly, during the probationary period, no notice is necessary.

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Navigating the complexities of global hiring while ensuring compliance can be quite challenging. Employers must meticulously follow employment laws, adhere to payroll procedures, ensure Diversity, Equity, and Inclusion (DE&I) compliance, and maintain data protection standards like GDPR. Setting up local entities for hiring is no easy feat, and keeping up with the ever-evolving compliance landscape can be even more daunting.

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At Gloroots, we simplify this process by offering a one-stop solution to manage all your global hiring needs. Our in-house experts provide a protective shield against cross-border employment and payroll compliance risks. We assist you in creating employment contracts, ensuring timely payments, and compliant benefits, allowing you to concentrate solely on talent screening.

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Our commitment is to deliver a stress-free global employment experience, benefiting both you and your employees. Connect with our experts today to kickstart your global hiring campaign with confidence.

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Growing your team in Oman is simplified with Gloroots as your global Employer of Record (EoR). Oman's employment rules can be complex, covering compliance, payroll, tax, and benefits. Gloroots' comprehensive EoR service handles these administrative tasks, freeing you to focus on your employees and business growth. With Gloroots managing payroll, tax compliance, benefits, and overall compliance, you can navigate Oman's labor regulations smoothly. This allows you to confidently expand your team in Oman, knowing your HR needs are in capable hands, supporting your business growth.

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