The payroll process in Oman can be complex due to labor laws and regulations. Employers must pay salaries at least monthly and ensure accurate payment of wages after deductions. Common payroll components include basic salary, allowances, overtime pay, bonuses, and commissions. Employers must provide benefits like annual leave, sick leave, maternity leave, medical insurance, and end of service gratuity. Outsourcing payroll to an experienced provider can help ensure compliance with Oman's laws and security of sensitive payroll data.

1. Payroll Process in Oman
A brief overview
For a non-specialized, payroll is about getting your wages/salary paid on a
specific date of every month. For a professional, many factors need to be
considered such as payroll policy, labor law and they must also ensure that
every employee gets paid the actual amount after any deductions/ additional
earnings.
Every country has different processes and policies with regard to payroll and
also laws and regulations for the safety of Human resources. Here we have
covered some important points about the Payroll Process in Oman.
1. What is the frequency of salary payment in Oman?
Article 51 of Oman Labour Law states as follows,
o Employees working on a monthly wage should receive their salaries at
least once a month,
o If the employee works by piecemeal, or if the work period exceeds at least
two weeks the employee should be paid for the work done in the first
week, and the balance should be settled one week after completion of the
job.
o In other cases, the employee should be paid once every week or
fortnightly. If the employee agrees in writing with his employer, he can
receive his salary once every month.
2. Are there any statutory pay components in Oman?
Oman labor law does not specify any fixed pay components that should
make up an employee’s salary.
3. Which are the common pay components that are normally payable to
employees?

2. Fixed components may include Basic salary, House rent allowance and
Conveyance Allowance. The variable components may include
Overtime, Sales commission, Bonus, Incentives, Relocation allowances,
Leave passage etc.
4. What is the minimum Salary in Oman?
Oman’s minimum wage is 325 Omani riyals per month for Omani
nationals. There is no specified minimum wage for expatriate workers.
Please refer to the following article on the ministerial decree
5. What are the maximum working hours in Oman?
The maximum number of working hours in Oman is nine hours per day
which includes at least half an hour of rest. During the holy month of
Ramadhan, the maximum number of working hours for Muslim
employees is six a day.
6. How is Overtime Calculated?
As per Article 70, the employee must get paid extra for the additional
hours worked, and the employee is entitled for overtime work plus at
least 25% against their basic salary. 50% overtime is provided when an
employee works on his day of rest and 100% overtime is provided when
an employee works during a national holiday.
7. How is gratuity accrued?
As per Article 39 of Oman Labor Law, Gratuity calculation is accrued
against the last drawn basic salary on the following basis.
o A service period below 3 years at 15 Days per year.
o Three Years and above at one month (30 Days) salary per year.

3. Please refer to our detailed article on Oman gratuity policy here
8. When is gratuity paid to an employee?
Employees are eligible for gratuity pay at the end of their service period,
at termination, death or at resignation. According to Article 39, the
worker shall be entitled to a fraction of the year worked provided he has
completed more than one year of continuous service
9. What are the statutory deductions that are made to employees in the
Oman?
In Oman, payroll is not subject to income tax, and hence there are no
mandated tax deductions. Whereas Omani nationals are subject to
mandatory national pensions plans contributions.
10. Which employees qualify for Oman pension contribution?
Pension contribution in Oman is provided for Omani nationals only.
11. How is Oman pension calculated?
The contribution is fixed at 18.5% of the employee’s Gross Salary, of
which 11.5% (includes 1% for occupational injuries and disease) is
payable by the employer and 7% is payable by the employee.
The maximum deduction base amount is OMR 3000. The employee
Pension contribution is deducted from the monthly wages and the
employer needs to pay this amount along with the employer contribution
to the Pension Authority.
12. What is WPS in Oman?

4. The Wage Protection System (WPS) is mandatory in Oman. Companies
in Oman need to adopt the Ministry of Manpower’s wages protection
system to ensure that the employees are paid on time
Under the WPS, companies are required to submit wage information to
the Ministry of Labor via the e-service program. The WPS ensures that
employee rights are protected and that salaries are paid according to
agreed terms of employment contracts.
13. Are Employees eligible for Air Ticket Benefits in Oman?
There is no specific statute in the labour Law to provide return air tickets
to the worker’s home country. However, many companies provide air
tickets to employees annually and some of the companies extend this
payout to employees’ dependents as well.
14. What is the leave policy defined under the labor law?
Annual Leave
According to Article 61 of the Oman Labour Law, upon completion of six
months of service with the employer, an employee is entitled to a paid
annual leave for a period of thirty days for every calendar year.
Sick leave
As per Article 66, an employee whose sickness is proved shall have the
right to a sick leave not exceeding in total ten weeks in one year
whether such weeks are continuous or separate and the sick leave shall
be granted as follows:
o The first fourteen days, with full gross salary. (1st
and 2nd
week)
o Day 15 to Day 28, with three quarters of the gross salary. (3rd
and 4th
week)
o Day 29 to Day 42, with half the gross salary. (5th
and 6th
week)
o Day 43 to Day 70, with a quarter of the gross salary. (7th
to 10th
week)

5. A medical certificate must be provided as Proof of sickness. However, in
case there is a dispute, the matter shall be referred to the Medical
Committee, provided for in Article (43) of this Law.
Maternity leave
According to Article 83, A female employee shall have the right to a
special fifty-day maternity leave covering the periods before and after
delivery with full salary for not more than three times during her service
with the employer.
Hajj Leave
Muslim Employees get a special leave to perform Hajj once and only
after one year of continuous employment. The leave may be up to 15
days which shall be once throughout the period of service. This is a paid
leave.
Paternity Leave
The Labor law of Oman is silent about paternity leave.
Marriage leave
Employees are granted a three-day paid marriage leave with gross
salary. This type of leave can only be grated once throughout the entire
service period.
Compassionate Leave
Compassionate leave is granted for three days in the case of the death
of a first-degree relative, and for two days in the case of a second-
degree relative.

6. Examinations leave
Omani nationals’ employees who are studying in schools, colleges or
universities in the country are granted fifteen days per year for the
purposes of taking their examinations.
Iddah Leave
In the case of a married Muslim female employee is widowed, she is
granted 130 days paid leave to mourn the death of her husband.
Please read our article on Oman leave policy here for a
comprehensive understanding.
15. Is employee Medical Insurance mandatory in Oman?
It is mandatory that an employer provide medical insurance to the
employee during the duration of employment.
16. Is bonus or incentives payment mandatory in Oman?
Bonus and incentives payments are not mandatory according to Oman
compensation laws. Companies provide these benefits to employee to
attract top talent.
17. Is the employment of foreigners regulated in Oman?
Yes, an employer is not allowed to bring in foreign workers into the
Sultanate of Oman unless he obtains approval from the ministry. Grant
of such approvals depends upon the following.
o There must be insufficient qualified Omanis for the job.
o The employer meets the required percentages for Omanisation.
o The required fees are paid.
18. What are the items included in End of Service Benefits
calculation in Oman?

7. The employee is entitled to the following end of service benefits.
1. End of service Gratuity
2. Repatriation ticket if applicable
3. Notice period pay if applicable
4. Any unutilized leave (Vacation) pay
5. Any other outstanding payment or deduction
Employee Benefits in summary:
6. Salary
7. Gratuity
8. Annual Leave
9. Sick leave
10. Maternity Leave
11. Examination leave
12. Marriage Leave
13. Compassionate Leave
14. Iddah leave
15. Medical Insurance
16. Overtime pay if applicable
It is mandatory for businesses to process payroll in a timely and
accurate manner, be it in Oman or anywhere across the world. The law
and procedures related to payroll system might vary for different
countries, but the mandatory requirement remains the same. An
accurate and streamlined system for payroll processing will mitigate risk
and improve business operations vastly.
Payroll Process 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.

8. 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 in Oman, 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 on every
project, ensuring our clients get refined consulting services to take your
business forward.
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 subjected to
change and 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.
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9. Payroll Process in Oman
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