Employer of Record in Oman

An Employer of Record (EOR) in Oman is a company that legally hires and pays employees on your behalf. This means you can build a team in Oman without setting up a local legal entity, saving you time and money. The EOR handles all the HR tasks like payroll, taxes, benefits, and compliance with Omani labor laws. It’s a straightforward way to expand your business into a new country. For a provider that can help you with this, consider Rivermate as an EOR provider: https://rivermate.com/employer-of-record.

How an Employer of Record (EOR) Works in Oman

Using an EOR in Oman simplifies the process of hiring. Here is how it generally works:

1. You find the talent. You recruit and select the candidate you want to hire in Oman.
2. The EOR hires them legally. The EOR becomes the official employer of your chosen candidate under their local Omani entity.
3. They handle the paperwork. The EOR manages the employment contract, ensuring it complies with Omani labor laws.
4. Onboarding begins. The EOR onboards your new employee, including setting up payroll and benefits.
5. You manage the day-to-day. You direct your employee's daily tasks and responsibilities, just like any other team member.
6. The EOR manages HR. The EOR takes care of salary payments, tax withholdings, social security contributions, and other administrative tasks.

Benefits of Using an EOR for Hiring in Oman

Using an EOR to hire in Oman offers several advantages. It allows you to enter the Omani market quickly and efficiently while staying compliant with local regulations.

• Avoids setting up a legal entity. You can hire in Oman without the cost and complexity of establishing a local company.
• Ensures legal compliance. EORs are experts in local labor laws, reducing the risk of non-compliance.
• Simplifies HR and payroll. The EOR handles all administrative burdens, including payroll, taxes, and benefits.
• Saves time and money. You can onboard new team members much faster and at a lower cost than setting up your own entity.
• Access to expertise. You benefit from the EOR's local knowledge and experience.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Oman includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Oman.

Hiring in Oman is a straightforward process when you understand the local labor laws. The legal framework, primarily governed by the Labour Law issued by Sultani Decree 53/2023, sets clear guidelines for employment. This ensures a fair and transparent environment for both you and your employees. As you build your team in Oman, it's important to be aware of the specific regulations that shape the employer-employee relationship.

Employment contracts & must-have clauses

In Oman, you must provide a written employment contract. If the contract is not in Arabic, you must attach an Arabic translation. The Arabic text will always prevail in case of any dispute.

Your employment contracts can be for a fixed term or an indefinite period. A fixed-term contract can have a maximum duration of five years. If you and the employee continue the working relationship after the contract's expiration, it automatically becomes an indefinite contract.

Here are the essential clauses to include in your employment contracts:

• Employer and employee details: Include the full name and address of both your company and the employee.
• Job specifics: Clearly state the employee's title, job description, and qualifications.
• Contract duration: Specify if the contract is for a fixed term or is indefinite.
• Compensation: Detail the basic salary, allowances, and any other remuneration.
• Notice period: Outline the required notice period for termination.

Probation periods

You can include a probation period in the employment contract to assess a new employee's performance. Here are the key points to remember:

• The maximum probation period is three months for employees paid monthly.
• For employees paid on a different schedule, the maximum probation period is two months.
• You can only place an employee on probation once with the same employer.
• Either you or the employee can terminate the contract during probation with at least seven days' notice.

Working hours & overtime

The standard workweek in Oman is 40 hours, with a maximum of 8 hours per day. Continuous work should not exceed six hours without a break.

During Ramadan, the working hours for Muslim employees are reduced to 6 hours per day or 30 hours per week.

If an employee works beyond the standard hours, they are entitled to overtime pay:

Public & regional holidays

Your employees in Oman are entitled to paid leave on public holidays. The official public holidays for 2024 are:

• Accession Day (January 11)
• Prophet's Ascension (February 8)
• Eid al-Fitr (End of Ramadan, April 10-13)
• Eid al-Adha (Feast of the Sacrifice, June 16-20)
• Islamic New Year (July 7)
• Prophet's Birthday (September 15)
• National Day (November 18-19)

Hiring contractors in Oman

Hiring independent contractors in Oman can be a flexible way to access specialized skills for specific projects. This model allows you to scale your workforce based on your needs without the long-term commitments of full-time employment.

An independent contractor typically:

• Sets their own work schedule.
• Uses their own tools and software.
• Can work for multiple clients.

It is crucial to correctly classify your workers. Misclassifying an employee as an independent contractor can lead to significant legal and financial risks, including fines, back taxes, and penalties.

An Employer of Record (EOR) can help you mitigate these risks. An EOR acts as the legal employer for your workers in Oman, ensuring compliance with all local labor laws. This includes correctly classifying employees, drafting compliant contracts, and managing payroll and benefits. By partnering with an EOR, you can confidently build your team in Oman while minimizing your legal exposure.

In Oman, your employee compensation and payroll are built on a framework of labor laws and regulations. These rules ensure fair and consistent payment practices for everyone. A key part of this is the end-of-service gratuity, a required payment to employees when their contract ends. You'll also find that housing and transportation allowances are common parts of compensation packages. All payments to employees must be made in the local currency, the Omani Rial (OMR).

Payroll cycles & wage structure

In Oman, you will typically pay your employees once a month. While there are no specific required pay components, a typical salary structure includes a basic salary plus allowances for housing and transportation. You can also offer variable components like bonuses and sales commissions.

To make sure employees are paid on time, Oman has a Wage Protection System (WPS). This system requires you to submit wage information to the Ministry of Labor through their online portal.

Overtime & minimums

The standard work week in Oman is 45 hours, with a maximum of nine hours per day. Any work beyond these hours is considered overtime. For daytime overtime, you must pay employees 125% of their normal wage. For nighttime hours, this increases to 150%.

The minimum wage for Omani nationals is 325 OMR per month. This is broken down into a 225 OMR basic salary and a 100 OMR allowance. There is no specified minimum wage for expatriate workers.

Employer taxes and contributions

As an employer in Oman, you are responsible for making social insurance contributions for your Omani employees. These contributions are paid to the Public Authority for Social Insurance (PASI).

Employee taxes and deductions

Employees in Oman who are Omani nationals also contribute to social insurance. There are no personal income taxes in Oman.

In Oman, your employee benefits package is a mix of required entitlements and optional perks. The law sets the minimum for things like leave and social security. But many companies offer more to attract and keep the best people. Understanding these rules is key to hiring in the country.

Statutory leave

Oman's labor law provides several types of leave for employees. After six months of work, you are entitled to 30 days of paid annual leave.

Here are the main types of statutory leave:

• Sick Leave: You can take up to 182 days of sick leave per year. The pay structure is tiered:
  • Days 1-21: 100% of your salary
  • Days 22-35: 75% of your salary
  • Days 36-70: 50% of your salary
  • Days 71-182: 35% of your salary
• Maternity Leave: Female employees get 98 days of paid leave.
• Paternity Leave: New fathers receive 7 days of paid leave.
• Marriage Leave: You can take 3 days of paid leave for your wedding, once during your service.
• Bereavement Leave: You get 3 to 7 days of leave for the death of a close family member.
• Hajj Leave: Muslim employees are entitled to 15 days of leave once during their employment to perform the Hajj pilgrimage, after one year of service.

Public holidays & regional holidays

Oman celebrates several public holidays each year. Employees get a paid day off for these occasions. Some dates are based on the lunar calendar, so they may change.

*Dates for Islamic holidays are estimates and depend on moon sightings.

Typical supplemental benefits

Companies in Oman often provide extra benefits on top of what the law requires. This helps them compete for talent.

How an EOR can help with setting up benefits

Setting up employee benefits in a new country can be complex. An Employer of Record (EOR) simplifies this process.

An EOR acts as the legal employer for your staff in Oman. This means they handle all the HR tasks, including benefits administration. You don't have to open a local entity, which saves you time and money.

Here is how an EOR helps:

• Ensures Compliance: An EOR understands Oman's labor laws and makes sure your benefits packages are fully compliant.
• Manages Administration: They handle the day-to-day work of managing benefits, from enrollment to payroll deductions.
• Provides Local Expertise: EORs know the local market and can advise on competitive benefits packages to attract top talent.
• Reduces Risk: By managing compliance and legal requirements, an EOR reduces your risk of fines or legal issues.

Using an EOR allows you to focus on your business goals while they take care of the HR details.

When an employment relationship ends in Oman, you need to follow a clear process. This involves understanding the legal grounds for termination, giving the correct notice, and paying any final dues. The Omani Labour Law sets out the rules for both employers and employees to ensure a fair and compliant exit process.

Notice periods

Giving the right amount of notice is a key step. The required notice period in Oman generally depends on how often the employee is paid.

• Monthly-paid employees: You must provide one month's notice.
• All other employees: 15 days' notice is required.

During a probationary period, either you or the employee can end the contract with seven days' notice. It's also important to check the employment contract, as it might specify a longer notice period than the legal minimum. If it does, the longer period applies.

Severance pay

In Oman, severance pay is known as an end-of-service gratuity. Employees are entitled to this payment after completing at least one year of service. The calculation is based on the employee's basic salary.

• First three years of service: 15 days' basic salary for each year.
• After the first three years: 30 days' basic salary for each year.

There are specific situations, such as serious misconduct, where an employee may be dismissed without notice and may not be entitled to this end-of-service gratuity.

How Rivermate handles compliant exits

When you use an Employer of Record like Rivermate, we manage the entire offboarding process to ensure it complies with Omani law. We handle all the necessary steps to make sure every exit is smooth and lawful.

Here is what our process typically involves:

• Reviewing the situation: We start by understanding the reason for the termination to determine the correct legal grounds and procedure.
• Managing notice periods: We ensure the correct notice period is given to the employee based on their contract and Omani law.
• Calculating final payments: Our team calculates all final dues, including any outstanding salary, unused leave, and the end-of-service gratuity.
• Handling documentation: We prepare all necessary termination documents, including a certificate of service if the employee requests one.
• Clear communication: We facilitate clear communication with the departing employee to ensure they understand the process and their final entitlements.

By managing these steps, we help you navigate the complexities of Omani labor law and reduce the risk of legal disputes.

Navigating visas and work permits in Oman requires a clear understanding of the process. Your ability to legally work in the country hinges on securing the right permissions. The system is sponsorship-based, meaning a local Omani entity must sponsor your application. This sponsor is legally responsible for you during your employment. The primary visa for foreign workers is the Employment Visa, which is typically valid for two years.

Employment visas & sponsorship realities

Getting an employment visa in Oman means you need a sponsor. This is where an Employer of Record (EOR) becomes valuable. An EOR can act as your legal employer in Oman, even if your actual company doesn't have a local office there. This solves a major hurdle for companies wanting to hire talent in the country without establishing a legal entity.

An EOR handles the entire visa and work permit application process. They ensure everything complies with Omani labor laws. Here’s what that typically looks like:

• Legal Employer: The EOR becomes the legal employer for your staff in Oman.
• Visa Sponsorship: They sponsor the necessary work permits and employment visas.
• Compliance: The EOR manages payroll, taxes, and benefits according to local regulations.

This arrangement allows you to focus on your business operations while the EOR manages the legal and administrative burdens of employment. It's a practical route for companies that need to deploy talent in Oman quickly and compliantly.

Business travel compliance

If you are visiting Oman for short-term business activities, you will need a business visa. This visa is for activities like meetings, conferences, or negotiations. It does not permit you to engage in full-time employment.

To get a business visa, you typically need an invitation letter from a registered company in Oman. This Omani entity acts as your sponsor for the visit. The visa is usually granted for a short duration, such as 30 to 90 days, and can sometimes be for single or multiple entries.

Here are the key things to remember for business travel:

• Sponsorship is required: You need an Omani company to sponsor your visit.
• Clear Purpose: The reason for your visit must be purely for business activities, not work.
• Short-Term: These visas are for temporary visits, not long-term assignments.