Guide to Hiring in Oman

Employment trends and job market analysis in Oman

Oman, strategically located on the southeastern coast of the Arabian Peninsula, offers a stable and business-friendly environment. With a population of approximately 5.16 million and a GDP per capita of $32,200, the nation is actively pursuing economic diversification under its Vision 2040 plan, focusing on sectors like tourism, logistics, manufacturing, and renewable energy. 

Taxes, payroll and social security

Taxes on corporate income

Oman imposes corporate income tax on the worldwide income of Omani-registered entities and on Oman-sourced income for foreign branches or permanent establishments. The standard corporate tax rate is 15%. However, small and medium enterprises (SMEs) may be eligible for a reduced rate of 3%, provided they meet the following conditions:

• Capital not exceeding OMR 60,000 
• Annual gross income below OMR 150,000 
• Maximum of 25 employees 
• Exclusion from sectors such as oil, gas, finance, or utilities 

Petroleum income tax

In Oman, taxation for the petroleum sector is handled separately under Exploration and Production Sharing Agreements (EPSAs). Under these agreements, the government pays the income tax on behalf of the oil and gas companies from its share of production, meaning the tax liability is effectively covered through the state's portion of revenue.

Local income taxes

There are no regional or local income taxes in Oman.

Social security contributions

Social security applies only to Omani nationals. Employers must contribute on behalf of their Omani employees, covering pensions, injuries, and job security. 

• Employer: 12.5% (including 1% injury insurance and job security) 
• Employee: 8% (including job security) 
• Total: 20.5% of salary 
• Expatriates are exempt from social security contributions 

Salary payments

• Employers must process salaries via WPS (Wage Protection System) linked with Ministry of Labour and Central Bank 
• Non-compliance can result in fines, suspension of new visa applications 

Minimum wage

Oman’s minimum wage applies only to Omani citizens in the private sector. The current minimum is OMR 325 per month, made up of: 

• OMR 225 basic salary 
• OMR 100 allowances for housing and transport 

There is no statutory minimum wage for expatriates. 

Working hours

Oman regulates working hours to ensure work-life balance while respecting cultural and religious practices. The standard workweek is: 

• 8 hours per day, 40 hours per week
• During Ramadan: 6 hours per day for Muslim employees

The new Labour Law has raised the minimum employment age to 18 years for Omani workers and 21 years for expatriates. 

Overtime compensation

Overtime in Oman is paid at enhanced rates of:

• 125% of basic pay for daytime overtime
• 150% of basic pay for nighttime overtime

Labour laws and employment regulations

The new Labour Law (Royal Decree No. 53/2023), enacted on 31 July 2023, modernises Oman’s employment framework to promote fairness, transparency, and alignment with international standards. It outlines updated rules around working hours, wages, leave entitlements, and termination processes, with a strong focus on protecting employee rights.

Key updates include:

• Shorter working hours and expanded leave options, such as paternal leave, study leave, and bereavement leave for non-Omani women.
• Clearer termination rules, promoting fair and balanced procedures for both employers and employees.
• Stronger protections for expatriate workers, including:
  • Minimum 30 days of paid annual leave after six months of service
  • Eligibility for salary increases and equal treatment
  • Enhanced end-of-service benefits such as:
    • 15 days salary per year for the first five years
    • One month's salary per year for each additional year
    • Capped at 18 months' total salary

These reforms reflect Oman’s commitment to creating a more equitable and globally competitive labour market.

Omanization policy

Omanization is a national initiative aimed at reducing reliance on foreign labour by boosting Omani employment in the private sector. These measures are designed to encourage sustainable national employment and skill development across industries.

As of April 2025:

• Foreign-owned companies must employ at least one Omani within 12 months of establishment.
• Fines of OMR 250–500 apply for each required local hire not met.
• Employers must submit annual workforce localisation plans to the Ministry of Labour, detailing Omani headcount, gender balance, job roles, and salaries.
• Companies are also expected to provide leadership development plans for Omani staff.
• Expatriates may be replaced by Omani nationals to ensure compliance.

Leave entitlements 

The updated labour law enhances employee leave entitlements, ensuring better work-life balance and protection.

• Annual leave: Minimum 30 days of paid leave after six months of service.
• Bereavement leave: Three to seven days for the death of close family members.
• Al-Hajj pilgrimage leave: Up to 15 days of paid leave for Muslim employees, once during employment.
• Study leave: 15 days for Omani employees pursuing further education.
• Public holidays: Paid leave on all official Islamic and national holidays as per the annual calendar.

Sick leave

Employees are entitled to up to 182 days per year, paid as follows:

• Days 1–21: 100% pay
• Days 22–35: 75% pay
• Days 36–70: 50% pay
• Days 71–182: 35% pay

Special leave

• Marriage leave: Three days’ paid leave, granted once during the entire period of service.
• Other special leave may be granted for events such as childbirth and emergencies, depending on the employment contract or company policy.

Attracting Omani talent

In Oman’s evolving job market, companies must go beyond salary and benefits to attract top local talent. With growing national efforts like Omanization and Vision 2040, businesses that align with cultural expectations, career aspirations, and national priorities will be best positioned to succeed. Here are key areas to focus on: 

Strong leadership and local empowerment

Leadership plays a vital role in employee retention. In Oman, employees value leaders who combine technical expertise with cultural awareness, clear communication, and respect for work-life balance. Providing leadership development programmes, particularly for Omani nationals, helps build trust and demonstrates commitment to local career progression—an increasingly important factor under Omanization policies. 

Career growth and skill development

Career development is highly valued in Oman’s workforce, especially as the government encourages upskilling of local talent. Companies that offer training, mentorship, and clear career pathways will not only attract ambitious candidates but also support Oman’s national drive to build a skilled domestic workforce. Structured learning and development plans can also strengthen Omanization efforts and improve long-term retention. 

Respect for work-life balance 

Work-life balance is a growing priority among Omani professionals, particularly younger generations. While traditional working hours are still the norm, flexible arrangements such as adjusted hours during Ramadan, family leave policies, and reasonable overtime expectations can enhance employee satisfaction and wellbeing. 

Alignment with Omanization goals 

Omanization is more than a legal obligation—it’s a business advantage when implemented thoughtfully. Candidates appreciate companies that actively invest in developing Omani nationals for leadership roles and provide real opportunities for advancement. Demonstrating clear localisation strategies can enhance your reputation as an employer of choice.

Inclusive and supportive workplace culture

While Oman may not have the same level of public discourse on DEI as some other markets, companies that create inclusive, respectful, and supportive environments stand out. This includes respect for cultural traditions, gender diversity, and providing safe, collaborative workspaces. Promoting an inclusive culture helps attract a wider pool of qualified candidates and supports long-term business success. Employment Contracts 

The contract should include job title, duties, salary, working hours, leave entitlements, termination conditions, and any other terms agreed upon by the employer and employee. 

• Types: Fixed-term and indefinite contracts 
• Probation Period: Typically 3 months 

Immigration and work permits

Hiring foreign talent in Oman involves several legal steps to ensure compliance with local labour laws. Below is a streamlined overview of the key requirements and timelines.To hire foreign nationals in Oman, employers must follow specific legal procedures and demonstrate that the role cannot be filled by an Omani national. Here's a quick overview of the key requirements and timelines:

• Labour clearance: Must be approved by the Ministry of Labour (3–6 weeks).
• Work visa: Employer-sponsored; valid for 2 years and renewable (1–2 weeks after clearance).
• Residence permit: Required for the full duration of employment.
• Additional requirements: Medical test and fingerprinting are mandatory before the residence card is issued.

Termination and severance pay

Employers in Oman may lawfully terminate employment, but only if all terms of the employment contract and relevant labour laws are met. Valid reasons for termination include redundancy, poor performance, misconduct, or economic challenges.

Notice period

Employers must follow the notice period stated in the employment contract. The law also sets minimum notice requirements.

Severance pay

Employees are entitled to severance pay based on their length of service:

• First 3 years: 15 days’ basic salary per year
• Beyond 3 years: 30 days’ basic salary per year

Termination due to redundancy – Article 43(4)

Employers may terminate staff if there is a genuine business need, such as:

• Changes in business operations
• Closure of a business unit
• Reduction in workforce requirements

Termination due to economic conditions – Article 44

If a company faces economic losses for at least two consecutive years, it may reduce staff with Ministry of Labour approval.

Termination for underperformance – Article 43(3)

Employers can terminate underperforming staff after providing a six-month grace period for improvement. If performance does not improve, termination may proceed.

What are my options for hiring employees in Oman?

Whether you're expanding operations or starting a new project in Oman, Airswift offers end-to-end employment solutions to help you build your team with confidence. From sourcing top talent to navigating complex local regulations, we take care of the details so you can focus on growth.

Talent acquisition

Oman has a diverse and highly educated population. We're here to assist you in finding the best candidates for your company.

Regardless of whether you're looking to hire locally for an immediate project or need to fill a vacancy in your organisation, our talent acquisition resources and extensive talent database ensure that we can connect you with the right talent for your business requirements.

We provide contract hiring services for companies that require temporary employees to fill specific roles. If you're looking for people who can grow with your business, we offer professional recruitment services that help you find them.

Employer of record

Hire an Omani team without establishing a local business entity. Working with an Employer of Record in Oman lets you speed up the hiring process by carrying out remote hiring. Once your Canadian employee is approved, we handle everything from the onboarding process and benefits administration to calculating payroll contributions and taxes.

Although the information provided has been produced from sources believed to be reliable, Airswift makes no warranties, whether express or implied, regarding the accuracy, adequacy, completeness, legality, or reliability of any information herein. Accordingly, there shall be no liability attached to the use of the information herein, howsoever arising. For the latest information and specific queries regarding particular cases, please contact our team.