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Employer of Record and Payroll Services in Oman Oman flag

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Global Payroll Team
Written by Global Payroll Team
Last updated May 1, 2026
Expert Reviewed
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Mercans offers complete payroll, PEO and HR services in Oman

An Arab country on the southeastern coast of the Arabian Peninsula and a member of the GCC, Oman offers a stable business environment and continues to support economic diversification beyond oil. Its policy direction remains focused on private-sector development, investment, and employment growth, making it an attractive location for local and foreign businesses.

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Doing Business in Oman

Advantages to investing in Oman include a stable local currency, no general personal income tax on employment income, competitive customs arrangements on many products, free trade links with various countries, and legal protections for investment. Oman also continues to encourage non-oil sector growth and business activity through ongoing economic reform.

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Oman is relatively straightforward. Companies can choose from a range of legal structures depending on their ownership, commercial activity, and operational requirements.

Banking

Banking hours vary by institution, although many banks operate during standard weekday business hours and offer extensive digital banking services.

Working Week

The standard working week in the private sector is commonly Sunday to Thursday, although working schedules may vary by employer and business activity.

Labor Law

Labour law in Oman applies to private-sector employers and employees and regulates matters such as employment contracts, working time, leave, health and safety, wages, and termination. The Ministry of Labour oversees labour regulation and employment policy in the Sultanate.

Main Industries

Oil and gas, logistics, construction, tourism, manufacturing, mining, fisheries and petrochemicals

GDP Growth

1.7%

Dates & Numbers

dd/mm/yyyy

Official State Name

Sultanate of Oman

Population

5.3 million

Capital

Muscat

Major Languages

Arabic

Currency

Omani Rial (OMR)

Internet Domain

.om

International Dialing Code

+968

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Oman
Muscat, OM
12:56 pm, May 2, 2026
36°C
clear sky
30 %
Wind Gust: 15 mph
Clouds: 0%
Sunrise: 5:31 am
Sunset: 6:33 pm

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Payroll

Payroll in Oman requires employers to manage wages, statutory leave, overtime, end-of-service benefits or social protection contributions where applicable, and immigration-related employment compliance for expatriate employees. The statutory minimum wage for Omani nationals in the private sector remains OMR 325 per month.

It is acceptable to provide employees with online payslips

Payslip

Payroll and employment records should be maintained in line with applicable legal and tax requirements

Reports

30 days

Annual Leave

Employees may receive up to 182 days of sick leave per year, paid according to the statutory schedule

Sick Leave

98 days of paid maternity leave and 7 days of paid paternity leave

Maternity & Paternity Leave

30 days

Employee Termination

–

13th Salary

325 OMR per month

Minimum Wage

125% of the employee’s regular wage for daytime overtime and 150% for night work, unless compensated with time off under the law

Overtime

30 days basic salary for each year of service for eligible employees not covered by a pension or social protection scheme

Severance Pay

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Tax and Social Security

The Tax Authority oversees the implementation of tax laws and regulations and provides services including taxpayer registration, returns and tax certificates. Oman’s social protection framework also includes mandatory contributions for eligible Omani employees in the private sector.

Tax

Salaries are generally not subject to personal income tax in Oman. Corporate taxpayers must comply with registration and filing obligations with the Tax Authority. VAT also applies in Oman at the standard rate, and companies should review whether withholding tax or sector-specific taxes are relevant to their operations.

15%

Corporate Income Tax

–

Personal Income Tax

–

Sales Tax

5%

VAT

Social Security

Oman’s social protection system applies mandatory contributions for eligible Omani employees in the private sector. Expatriate employees are generally not covered by the same contribution structure and may instead be subject to end-of-service benefit rules under the labour law.

21.5%

Social Security Rate

13.5%

Social Security Rate for Employers

8%

Social Security Rate for Employees

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Employment Law

Labour law in Oman requires written employment contracts and regulates working time, leave, wages, health and safety, and termination. Employers hiring expatriate staff must also ensure the appropriate labour and immigration approvals are in place. Businesses should also monitor Omanisation requirements where applicable to their sector or activity.

Employment Agreement

An employment agreement is entered into between the employer and employee and should clearly set out the terms and conditions of employment. Where the agreement is drafted in a language other than Arabic, an Arabic version or translation may be required for compliance purposes.

Working condition

The maximum ordinary working hours are generally 9 hours per day and 45 hours per week. During Ramadan, the maximum working time is reduced for Muslim employees. Employers must also provide adequate protection against occupational risks and comply with workplace safety requirements.

Leaves

Employees are entitled to 30 calendar days of annual leave with gross wage. Female employees are entitled to 98 days of maternity leave, and workers may also qualify for paternity leave, sick leave, bereavement leave, and other forms of special leave under the law.

Employment termination

An employer may terminate employment in accordance with the labour law, applicable notice requirements, and any end-of-service or social protection obligations. Dismissal without notice may be possible in certain misconduct-related cases under the law.

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30 days

Minimum notice period for terminating an employee

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Varies annually

Total number of public holidays

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45

Working hours per week

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3 – 10 days

Total number of days for Compassionate & Bereavement Leave

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Immigration

Foreign nationals cannot work in Oman without the appropriate immigration and labour approvals. In practice, employers are responsible for sponsoring employment visas and ensuring that all labour, medical, and residency formalities are completed in accordance with Omani requirements.

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Residency permits

The employer must obtain the relevant approvals to secure the employee’s work visa and residence status. Employment visas are generally issued at the request and responsibility of the sponsoring employer, and expatriate residents must obtain a residence card within the required deadline after entry.

Work Permit validity

Two years

Required Documents

A valid passport with at least six months’ validity

Labour permit or employment approval from the sponsoring employer

Medical certificate from an approved clinic where required

Passport-sized photographs

Relevant qualifications and supporting employment documents where applicable

Residence card application documents after entry into Oman

Compliant, reliable, error-free and touchless payroll in Oman

Build the best team and hire top talent compliantly in Oman. Get in touch with Oman payroll outsourcing & PEO specialists for a free consultation!

This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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    FAQs

    What is an Employer of Record (EOR) in Oman and how does it support foreign companies?

    An Employer of Record in Oman provided by Mercans acts as the legal employer for your workforce in Oman. Mercans manages employment contracts, payroll processing, tax and social security contributions, visas and labour law compliance so your foreign company can hire employees locally without setting up a local entity.

    Why should businesses use an EOR instead of establishing a legal entity in Oman?

    Using Mercans as your EOR in Oman avoids the cost and complexity of forming a local company. This allows your business to start operations quickly, ensures compliance with Omani employment and tax regulations from day one and enables you to focus on your core business while Mercans handles HR and payroll obligations.

    How does payroll outsourcing in Oman ensure compliance with labour and tax laws?

    Payroll outsourcing with Mercans in Oman ensures salary payments are made in Omani rial, statutory deductions are correctly calculated, social security contributions for Omani nationals are remitted, and wage protection and employment visa requirements are met in full accordance with Omani law.

    Can an Employer of Record in Oman hire employees and manage work permits for international companies?

    Yes. Mercans as your EOR in Oman can hire employees on your behalf and manage all the required work permit, visa and residence authorization processes for foreign nationals enabling your company to employ both local and expatriate talent in Oman in full legal compliance.

    What are the main benefits of using EOR and payroll services in Oman for global expansion?

    Mercans offers fast access to the Omani talent market without entity setup, ensures full compliance with Omani employment, tax and social security laws, reduces administrative and legal risk, provides local HR and payroll expertise, and offers scalable workforce solutions to support your global growth strategy.

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