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Overtime Calculation based on labor law
in Oman
When an employee works extra hours than the normal hours, those extra
hours are considered as overtime and the payment made for the extra hours
worked is known as overtime payment.
Please see the below Article 68 (Working Hours) and Article 70 (Overtime)
from Oman labor law.
Article (68):
An employee may not be required to work for more than nine hours a day and
up to a maximum of 45 hours a week with at least half an hour of breaks for
taking food and rest. The maximum work hours during Ramadan shall be six
hours a day or 30 hours a week for Muslim employees. A decision by the
Ministry may determine the timing of the work hours.
Article (70):
An employee may be required to work for more hours than those provided in
Article (68) if the interest of work so dictates, provided that the total original
and extra work hours do not exceed 12 (twelve) hours a day. The employer
shall pay the employee overtime equal to his basic salary for the extra work
hours, plus at least 25% for day-time work and 50% for night work, or grant
the employee permission for the extra hours he has worked, provided that the
employee agrees in writing to the extra work and the return.
With regard to the work that takes place at ports, airports, on vessels, ships,
or aircraft, the employer and the employee may, after obtaining the approval
of the Ministry, agree on the payment of a fixed allowance for the employees
in lieu of the overtime payments provided that the approval from the Ministry is
obtained. However, the minister may include any other works of a similar
nature.
In this article, we are trying to answer some of the frequently asked questions
related to overtime in Oman.
1. What are the maximum working hours in Oman?
As per Article 68 of the Omani Labor Law, an employee may not be
required to work for more than nine hours per day and 45 hours per
week, with at least a half-hour break for taking food and rest. The
maximum work hours during Ramadan shall be six hours a day or 30
hours a week for Muslim employees.
2. What are the types of overtime in Oman?
There are 3 types of overtime as mentioned below;
 125% for additional daytime working hours
 150% for nighttime working hours. The time between 9 PM and 4
AM is considered as night working hours.
 200 % if such work is performed during the weekly day of rest or
during the official holidays, the employee shall, unless compensated
with another day, be entitled to double the gross salary for such a
day.
3. Is there any exception for overtime payment in Oman?
As per Article 70, the employer may not comply with the provisions set
out in Sections [68] and [69] of this law in the following cases:
 At the time of annual inventory, preparation of the balance sheet,
liquidation, closing of accounts, and preparation for sale at a
discount. Provided that in such cases the number of working days in
which the worker works for more than the prescribed period of a
working day shall not exceed fifteen days in a year, unless the
relevant directorate approves longer periods.
 If the work is for the prevention of an accident or reparation of the
results thereof or the avoidance of a definite loss of perishable
materials.
 If the work is intended to meet an unusual pressure.
 The notification of the relevant directorate within twenty-four hours is
conditional in the last two cases, and in emergency, the additional
work and the period required for completion of the work shall be
stated.
 The Seasonal works are defined by a ministerial decision.
4. Are there any exempted roles from getting paid overtime?
The Ministry of Manpower, by way of Ministerial Decision 1 1976, states
that overtime payment will not apply to senior private-sector employees,
such as professionals including “doctors, engineers and those of similar
standard” or those persons who undertake dual roles involving
“administrative and supervisory work.”
5. Can any allowance be paid as an alternative to overtime?
The Omani Labor Law provides that those employers engaged in work
carried out at ports and airports or on-board ships, vessels, or aircraft
may agree to pay employees an allowance in lieu of overtime, subject to
the approval of the Ministry of Manpower.
6. How is overtime payment applied during Ramadan?
The maximum working hours for a Muslim worker during Ramadan is
six hours per day or thirty hours per week, irrespective of whether the
work is undertaken during the night or during the day. Any additional
hours that a Muslim employee will be required to work will be
considered as overtime.
7. What is the maximum number of working hours in Oman, including
overtime?
As per Article 70, the maximum working hours, including overtime,
during a day is 12 hours.
8. What is the Formula to Calculate OT in Oman?
Please see the below formula to calculate overtime.
(Basic salary per month/Standard Monthly Hours* OT hours* OT Type)
Please see the below example for a better understanding.
Basic Salary:400
Standard monthly hours: 240
1. An employee worked 10 extra hours during daytime hours
OT Type: 125% (overtime hours belong to daytime hours)
Over time amount= 20.833
i.e.400/240*10*125%
2. Employees worked for 15 extra hours during the night (i.e., 9 PM to 4
AM)
OT Type: 150% (overtime hours belong to nighttime hours)Overtime
amount=37.500
i.e.400/240*15*150%
3. Employee worked 10 hours during the weekly day of rest, and no
compensatory off was provided
OT Type: 200% (overtime hours belong to weekly holidays)Overtime
amount=30.333
i.e.400/240*10*200%
Note- There are no defined standard monthly hours in labor law, so we
considered 240 hours as standard monthly working hours for our
calculation.
There are numerous factors that are taken into account while calculating
overtime payment and the calculation criteria will not be the same for all the
countries. Even though there might be variation in the overtime payment
calculation, every company considers overtime payment to be the right of an
employee, be it in Oman or any other GCC country.
Payroll Service in Oman
The process of payroll is a little complicated and time-consuming; hence it is
always recommended to outsource your company’s payroll function.
Outsourcing payroll will ensure the assistance of a team of trained payroll
professionals and it frees up the time of the organization, helping them focus
on other projects that add value to their business. One should be extra vigilant
while selecting their payroll provider, as payroll data is highly sensitive, and
one should opt for a provider that can ensure high levels of data security.
As a leading payroll outsourcing company, HLB HAMT can help solve your
payroll complexities through customized strategies. We take care of our
clients’ entire payroll cycle that includes preparation of payroll reports,
processing salary payment with WPS compliance, accrual management
including Gratuity, pension funds, an online portal for accessing payslips, and
many more. Our leadership team spends the necessary hours in every
project, ensuring our clients get refined consulting services to take your
business forward.
To know more about oman payroll process, Click here
Disclaimer:
Whilst every effort has been made to ensure the accuracy of this information,
HLB HAMT will not accept any liability arising out of errors or omissions.
Please note that this blog is not all-inclusive. Our guidance is designed only to
give general information on the issues/topics covered. It is subject to change
and is not intended to be a comprehensive summary of all laws which may be
applicable to your situation, treat exhaustively the subjects covered, provide
legal advice, or render a legal opinion.
Overtime Calculation based on labor law
in Oman
Level 18, City Tower-2,
Sheikh Zayed Road
PO Box 32665
Dubai – United Arab Emirates. Tel: +971 4 327 7775
E-mail: dubai@hlbhamt.com
www.hlbhamt.com

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Overtime Calculation based on labor law in Oman.pdf

  • 1. Overtime Calculation based on labor law in Oman When an employee works extra hours than the normal hours, those extra hours are considered as overtime and the payment made for the extra hours worked is known as overtime payment. Please see the below Article 68 (Working Hours) and Article 70 (Overtime) from Oman labor law. Article (68): An employee may not be required to work for more than nine hours a day and up to a maximum of 45 hours a week with at least half an hour of breaks for taking food and rest. The maximum work hours during Ramadan shall be six hours a day or 30 hours a week for Muslim employees. A decision by the Ministry may determine the timing of the work hours. Article (70): An employee may be required to work for more hours than those provided in Article (68) if the interest of work so dictates, provided that the total original and extra work hours do not exceed 12 (twelve) hours a day. The employer shall pay the employee overtime equal to his basic salary for the extra work hours, plus at least 25% for day-time work and 50% for night work, or grant the employee permission for the extra hours he has worked, provided that the employee agrees in writing to the extra work and the return. With regard to the work that takes place at ports, airports, on vessels, ships, or aircraft, the employer and the employee may, after obtaining the approval of the Ministry, agree on the payment of a fixed allowance for the employees in lieu of the overtime payments provided that the approval from the Ministry is obtained. However, the minister may include any other works of a similar nature.
  • 2. In this article, we are trying to answer some of the frequently asked questions related to overtime in Oman. 1. What are the maximum working hours in Oman? As per Article 68 of the Omani Labor Law, an employee may not be required to work for more than nine hours per day and 45 hours per week, with at least a half-hour break for taking food and rest. The maximum work hours during Ramadan shall be six hours a day or 30 hours a week for Muslim employees. 2. What are the types of overtime in Oman? There are 3 types of overtime as mentioned below;  125% for additional daytime working hours  150% for nighttime working hours. The time between 9 PM and 4 AM is considered as night working hours.  200 % if such work is performed during the weekly day of rest or during the official holidays, the employee shall, unless compensated with another day, be entitled to double the gross salary for such a day. 3. Is there any exception for overtime payment in Oman? As per Article 70, the employer may not comply with the provisions set out in Sections [68] and [69] of this law in the following cases:  At the time of annual inventory, preparation of the balance sheet, liquidation, closing of accounts, and preparation for sale at a discount. Provided that in such cases the number of working days in which the worker works for more than the prescribed period of a working day shall not exceed fifteen days in a year, unless the relevant directorate approves longer periods.  If the work is for the prevention of an accident or reparation of the results thereof or the avoidance of a definite loss of perishable materials.  If the work is intended to meet an unusual pressure.
  • 3.  The notification of the relevant directorate within twenty-four hours is conditional in the last two cases, and in emergency, the additional work and the period required for completion of the work shall be stated.  The Seasonal works are defined by a ministerial decision. 4. Are there any exempted roles from getting paid overtime? The Ministry of Manpower, by way of Ministerial Decision 1 1976, states that overtime payment will not apply to senior private-sector employees, such as professionals including “doctors, engineers and those of similar standard” or those persons who undertake dual roles involving “administrative and supervisory work.” 5. Can any allowance be paid as an alternative to overtime? The Omani Labor Law provides that those employers engaged in work carried out at ports and airports or on-board ships, vessels, or aircraft may agree to pay employees an allowance in lieu of overtime, subject to the approval of the Ministry of Manpower. 6. How is overtime payment applied during Ramadan? The maximum working hours for a Muslim worker during Ramadan is six hours per day or thirty hours per week, irrespective of whether the work is undertaken during the night or during the day. Any additional hours that a Muslim employee will be required to work will be considered as overtime. 7. What is the maximum number of working hours in Oman, including overtime? As per Article 70, the maximum working hours, including overtime, during a day is 12 hours. 8. What is the Formula to Calculate OT in Oman? Please see the below formula to calculate overtime.
  • 4. (Basic salary per month/Standard Monthly Hours* OT hours* OT Type) Please see the below example for a better understanding. Basic Salary:400 Standard monthly hours: 240 1. An employee worked 10 extra hours during daytime hours OT Type: 125% (overtime hours belong to daytime hours) Over time amount= 20.833 i.e.400/240*10*125% 2. Employees worked for 15 extra hours during the night (i.e., 9 PM to 4 AM) OT Type: 150% (overtime hours belong to nighttime hours)Overtime amount=37.500 i.e.400/240*15*150% 3. Employee worked 10 hours during the weekly day of rest, and no compensatory off was provided OT Type: 200% (overtime hours belong to weekly holidays)Overtime amount=30.333 i.e.400/240*10*200% Note- There are no defined standard monthly hours in labor law, so we considered 240 hours as standard monthly working hours for our calculation. There are numerous factors that are taken into account while calculating overtime payment and the calculation criteria will not be the same for all the countries. Even though there might be variation in the overtime payment calculation, every company considers overtime payment to be the right of an employee, be it in Oman or any other GCC country.
  • 5. Payroll Service in Oman The process of payroll is a little complicated and time-consuming; hence it is always recommended to outsource your company’s payroll function. Outsourcing payroll will ensure the assistance of a team of trained payroll professionals and it frees up the time of the organization, helping them focus on other projects that add value to their business. One should be extra vigilant while selecting their payroll provider, as payroll data is highly sensitive, and one should opt for a provider that can ensure high levels of data security. As a leading payroll outsourcing company, HLB HAMT can help solve your payroll complexities through customized strategies. We take care of our clients’ entire payroll cycle that includes preparation of payroll reports, processing salary payment with WPS compliance, accrual management including Gratuity, pension funds, an online portal for accessing payslips, and many more. Our leadership team spends the necessary hours in every project, ensuring our clients get refined consulting services to take your business forward. To know more about oman payroll process, Click here Disclaimer: Whilst every effort has been made to ensure the accuracy of this information, HLB HAMT will not accept any liability arising out of errors or omissions. Please note that this blog is not all-inclusive. Our guidance is designed only to give general information on the issues/topics covered. It is subject to change and is not intended to be a comprehensive summary of all laws which may be applicable to your situation, treat exhaustively the subjects covered, provide legal advice, or render a legal opinion.
  • 6. Overtime Calculation based on labor law in Oman Level 18, City Tower-2, Sheikh Zayed Road PO Box 32665 Dubai – United Arab Emirates. Tel: +971 4 327 7775 E-mail: dubai@hlbhamt.com www.hlbhamt.com