Using an Employer of Record in Oman

Local labor and employment laws govern how organizations hire and pay employees in Oman. These laws can be complex to navigate and are frequently amended. That’s why using an Employer of Record in Oman helps streamline the process of engaging local talent.

Find out how Payoneer Workforce Management can help you compliantly onboard and engage talent in 160+ countries. Or, keep reading to learn more about the benefits of partnering with an EOR in Oman.

How to hire employees in Oman

Organizations have three main options to engage talent and pay employees in Oman:

1. Set up a local entity: Company incorporation gives employers legal access to hire full-time staff. Registration can be costly and time-consuming, though. Businesses registered in Oman also have additional reporting and compliance responsibilities.

2. Hire independent contractors or freelancers: Employers can find independent workers to fill short-term or project-based roles in Oman without a local entity. This route isn’t suitable (or legal) for full-time employees. Moreover, if the contractor is incorrectly classified, you may be subject to fines and penalties.

3. Employer of Record (EOR): An EOR in Oman can engage full-time employees on your behalf without the need for a local entity. You may also get assistance with onboarding, payroll, taxes, localized benefits, compliance support, and more.

Payoner Workforce Management offers an Employer of Record in Oman. We enable companies to compliantly engage talent across borders through our technology platform.

How to onboard employees in Oman

Onboarding remote workers can be a challenge, as time zones and language differences can slow down progress. That’s why you need a solid onboarding process to set your employee up for success and help you meet all legal and regulatory requirements.

This includes preparing compliant employment contracts, registering employees with the Social Insurance, and configuring payroll with all required contributions.

A streamlined onboarding process in Oman typically includes:

• Payroll and statutory setup: Register the employee with national systems, ensure payroll details are correctly configured, and complete all mandatory social insurance and tax-related submissions.
• Device and workspace preparation: Provide all required equipment, software access, and credentials ahead of the employee’s first day. Confirm that their on-site or remote workspace is ready.
• First week orientation: Deliver an introduction to company policies, workplace guidelines, cultural expectations in Oman, and a clear overview of the employee’s role.
• Team and stakeholder introductions: Organize early meetings with the employee’s manager, team, and key partners to support fast integration and clear communication.

Payoneer Workforce Management helps you set up localized benefits as per local laws and requirements.

Pay employees in Oman

Businesses must pay employees in Oman using the Omani Rial (OMR). Typically, pay day falls on the last day of the month. While annual bonuses are not legally required, employees must be paid at least the minimum wage of OMR 350 per month.

Taxation and benefits

Individual workers pay no income tax in Oman, and Oman has no public health insurance system for its residents. Instead, the government provides healthcare services through public hospitals and clinics. These are subsidized to ensure affordable access to medical care for Omani nationals. 

Oman’s social security system is administered by the Public Authority for Social Insurance (PASI) and provides benefits such as retirement pensions, disability, and work injury compensation.

The system is primarily designed for Omani nationals, who are mandatorily enrolled in the social insurance scheme. Expats are not generally included in the social security system, but they may receive work injury benefits through other means as mandated by law.

The employer contributions amount to 13.5% of the gross monthly salary of the employee. Here’s the breakdown:

• 1 % for the Work Injuries and Occupational Diseases Insurance
• 11% for the Old Age, Disability, and Death Insurance 
• 0.5% for the Employment Security Insurance
• 1% for the Maternity Leave Insurance
• 1% to the Public Authority for Social Insurance (PASI). (NOTE:  As per Royal Decree 60/2025, this will be effective from 19^th July 2026)

A streamlined way to pay employees in Oman is through an Employer of Record. Payoneer Workforce Management’s unified, all-in-one platform gives you a single dashboard to manage the Oman payroll.

Employment laws in Oman

Anyone employing workers in Oman has to comply with all local laws and regulations. Important employment laws to be aware of include:

• Working days: In Oman, the work week runs Sunday to Thursday. Fridays and Saturdays are weekends.
• Working hours: Employees usually work 45 hours per week.
• Ramadan working hours: In the private sector, working hours are reduced by 2 hours daily during Ramadan.
• Overtime hours: Any hours exceeding 45 hours per week are considered overtime.
• Overtime pay: Overtime is paid at 1.25 times the employee’s monthly salary.
• Probation period: Probations can last no more than 3 months.

Get assistance to stay compliant with local labor laws by using Payoneer Workforce Management’s infrastructure.

Minimum wage in Oman

The minimum wage in Oman is OMR 350 per month. You may check with government websites for any updates to the minimum wage in Oman.

Employment contracts in Oman

To be legally valid, an employment contract in Oman must include:

• Employer’s name, address, ID number, and registration details (where applicable)
• Employee’s name, address, ID number
• Job title and duties
• Work location
• Contract duration (fixed-term or indefinite)
• Contract start date (and end date, if applicable)
• Probation period
• Working hours
• Renumeration
• Leave entitlement
• End-of-service benefits
• Termination conditions
• Dispute resolution method (usually via Oman’s Ministry of Labor)

Partner with Payoneer Workforce Management as your Employer of Record in Oman and onboard talent quickly and securely with localized contracts and payroll.

Leave policy in Oman

In Oman, employers must offer leave, including vacation time, public holidays, sick leave, and more.

Vacation leave and public holidays

Employees in Oman are entitled to 30 days of paid vacation after completing 6 months of service. Unused vacation days can be carried forward into the next calendar year.

Oman also observes 15 public holidays. Employees should receive these holiday days as paid time off.

Sick leave

Employees are only entitled to sick leave once their probation period has passed.

After probation, employees may take up to 182 days of sick leave per year, provided they can supply proof of their illness (e.g., a medical note). Sick pay is calculated as a percentage of gross wage:

Parental leave

New mothers can take up to 98 days of maternity leave in Oman. The paternity leave allowance is 7 days.

Other leaves

• 3 days to celebrate a marriage
• 3 days of compassionate leave following the death of a son, daughter, mother, father, wife, grandparents, brother, or sister
• 2 days of compassionate leave following the death of an uncle or an aunt
• 15 days for the performance of Al-Hajj (pilgrimage)
• 130 days for a Muslim woman whose husband has died

Work permit in Oman

Non-Omani workers typically require a work permit in Oman. Employers are responsible for obtaining the authorization from the Ministry of Manpower.

The rules of a work permit may vary depending on the employee’s country of origin. Follow guidance on the Royal Oman Police website for more information.

Background check in Oman

Most employers perform a background check on candidates before an employment offer is sent. This background check usually covers the candidate’s employment history and references, education, and criminal record (essential for some roles). Depending on local law, an employer may also choose to check a candidate’s social media presence. 

Regardless of what the check involves, employers may have to seek consent from candidates before starting a check. 

Always follow relevant local legislation when conducting background checks in Oman.

Employment termination in Oman

In Oman, an employment contract can only be terminated on valid grounds. These include:

• The employee’s resignation
• If the employer and employee mutually agree to end the contract
• Termination during probationary period
• Termination by the employer due to misconduct, performance issues, or absence without leave

Terminations without valid grounds may be deemed unfair dismissal. This can lead to legal consequences for the employer. Termination is a complicated and delicate process. It should be handled on a case-by-case basis.

Notice period

During probation, 1 week’s notice must be given to end the contract. After probation, a minimum of 30 days’ notice must be given (this applies to both employers and employees).

Severance

During probation, no severance is due. After probation, severable pay is calculated based on the employee’s last basic wage (their final salary). 

The employee is owed at least 1 basic wage for every full year of service, and a proportional amount for every part year worked.

Company registration in Oman

Organizations may consider incorporating in Oman and opening a local entity if:

• They want to hire a large team of full-time employees (versus a smaller number of remote workers)
• They want to build brand awareness in the country (which having an office and physical presence will help)
• They are making a long-term market commitment (and so the high initial set-up costs could still deliver ROI)
• They don’t have remote teams in other markets (if they do, it’s far easier to manage local workers through an EOR)

For information about registering a business in Oman, you may check the government website.

Working with an Employer of Record in Oman makes more sense in most other circumstances.

With Payoneer Workforce Management, organizations can expand in 160+ countries without setting up a local entity.

PEO in Oman

A Professional Employer Organization (PEO) can support HR and Oman payroll functions, but requires you to have a legal entity in-country. 

On the other hand, an Employer of Record in Oman does not require a legal entity and instead serves as the legal employer for your local team. This often makes it the better choice for companies new to the local market.

Employer of Record services in Oman

Payoneer Workforce Management helps growing companies onboard, manage, and pay employees in Oman without setting up a local entity. 

As your EOR in Oman, we offer assistance with employment contracts, benefits administration, taxes, and payroll, while you retain control over daily operations.

Book a demo to learn more about Payoneer Workforce Management.

FAQs

1) What is an Employer of Record in Oman?

An Oman Employer of Record is a third-party organization that legally employs your workers on your behalf. The EOR manages Oman payroll, taxes, and employment contracts, so you can engage talent without a local entity.

2) How much does it cost to hire Omani talent?

Employers can expect fees of around 16.5% on annual salaries of USD 60,000. The final employer cost can vary depending on the employee’s salary and other local factors.

You can get a more accurate cost for your needs using our cost calculator tool. 

3) Why hire Omani talent with an EOR?

Payoneer Workforce Management enables companies to onboard and pay employees across the globe in 70+ currencies. Get in touch for details.