Payroll in Oman

Mercans is your trusted partner for premium payroll outsourcing in Oman (Managed & SaaS) services. Our steadfast commitment to delivering exceptional payroll solutions in Oman is unmatched. With extensive experience in payroll in Oman, Mercans guarantees precise and compliant payroll services in Oman, establishing us as the preferred option for businesses of all sizes. Rely on Mercans for prompt and accurate payroll transactions, including the convenience of multi-currency payments tailored for the Omani market. As your dedicated local payroll provider in Oman, we feature a team of in-country payroll specialists equipped with profound knowledge of local regulations, providing comprehensive assistance for a seamless payroll experience customized to meet your business requirements.

Everything you need to know before running payroll in Oman

Payroll Requirements

In Oman, wages are generally paid in Omani Rial and employers must use approved local banks or financial institutions for salary transfers under the Wage Protection System. Payslips are commonly issued on a monthly basis as a matter of practice, even though there is no separate statutory payslip form requirement. The current labour framework also requires employers to follow the Wage Protection System and salary payment rules applicable to private sector employees.

Minimum Wages

The minimum wage in Oman is set by government policy and should be verified against the latest official announcement before publication.

Payroll Cycle

In Oman, payroll cycles typically operate on a monthly basis, requiring employers to make payments at least once a month. At Mercans, we handle the complete payroll cycle for our clients, encompassing tasks such as preparing payroll reports, processing salary payments while ensuring compliance with the Wage Protection System (WPS), managing accruals including gratuity and pension funds, providing an online portal for accessing payslips, and much more.

13th Month Salary

Employers in Oman are not legally obligated to provide a 13th-month payment.

Working Hours and Overtime Pay

According to the current Labour Law, normal working hours are 8 hours per day and 40 hours per week. During Ramadan, Muslim workers generally work 6 hours per day or 30 hours per week. Overtime is permitted only within legal limits, and the total of ordinary and additional hours may not exceed 12 hours per day. Overtime is paid at not less than 25% extra for daytime work and 50% extra for night work. Work on weekly rest days or official holidays is compensated at higher rates, or the employee may receive compensatory leave where allowed by law.

Payroll Taxes in Oman

Social Security

Omani nationals employed in Oman are subject to the Social Protection Fund regime. The current monthly contribution rates for the branch of old age, disability, and death are 11% paid by the employer and 7.5% paid by the employee. The employer also pays 1% for work injuries and occupational diseases. Additional branches now apply, including employment security at 0.5% employer and 0.5% employee, maternity leave at 1% employer, and sick and other leaves at 1% employer from 1 July 2025. Expatriates are not generally covered under the old age, disability, and death branch, but certain other branches may apply according to the categories and controls issued by the Fund.

Social Security for Oman Nationals

Sample Calculation

Example:

• Gross salary – 4500 OMR
• Maximum ceiling amount for social security contribution is 3000 OMR
• Employee: 3000 OMR * 7.5% = 225 OMR
• Employer: 3000 OMR * 11% = 330 OMR
• Work Injury Employer: 3000 OMR * 1% = 30 OMR
• Employment Security EE: 3000 OMR * 0.5% = 15 OMR
• Employment Security ER: 3000 OMR * 0.5% = 15 OMR

Social Security for GCC Nationals

Social Security for Expats

Expat employees are not generally subject to the old age, disability, and death branch in Oman, but some branches may apply depending on current rules and employee category.

Social Protection Fund

Employers must register eligible employees with the Social Protection Fund and keep contribution data current. Monthly contribution bills are generated through the Fund’s online portal and must be paid within the applicable deadline.

Wage Protection System (WPS)

The Wage Protection System requires wages to be transferred through approved local banks or financial institutions to employees’ accounts. Employers should ensure that salary files match the contractual wage, payment timing, and local bank account details.

Personal Income Tax

At present, Oman does not levy personal income tax on employment income. A Personal Income Tax law has been issued to take effect from the beginning of 2028 for natural persons with annual income above OMR 42,000, at a rate of 5% on taxable income.

Payroll Compliance in Oman

In Oman, employers are obligated to submit the following statutory filings. Mercans assists you in completing the necessary filings as per the Omani local laws.

Statutory Filings

PASI Monthly Contributions

Monthly contribution invoices are generated by the Social Protection Fund for registered organizations. Employers should review employee additions, removals, and contribution amounts each month and settle the invoice through the official portal.

Annual Contributions for Nationals

Employers must keep employee salary and contribution data updated in the official portal and ensure that monthly contribution obligations are reported and settled correctly. Annual reviews should reflect the latest statutory contribution rules for each applicable branch.

Leave Entitlements

Below is a summary of statutory leaves applicable in Oman:

Company Setup in Oman

Company Registration Process in Oman:

• Name Reservation: Apply to the Ministry of Commerce and Industry to reserve a unique company name.
• Submission of Incorporation Documents: Prepare shareholder documents, the constitutive contract, the authorized signatory form, and bank documents, then submit them to the relevant authorities.
• Registration with Oman Chamber of Commerce and Industry: Complete the commercial registration process after incorporation.
• Government Approvals: Obtain any sector-specific approvals, labour clearances, and licences required for the business activity.
• Company Seal Design: Design and obtain a company seal.

Required Documents for Omani Company Registration:

• Company registration form
• Copy of valid ID of shareholders and authorized signatories
• Approved authorized signatory form
• Company statutes
• Chamber of Commerce and Industry affiliation certificate
• Certificate of initial capital deposit at bank, if required

Legal and Regulatory Framework

Oman’s legal system is based on civil code principles and Islamic Shari’a Law. Commercial disputes are handled by the competent courts, and employment matters are governed by the Labour Law and related regulations.

Establishment of Business

Foreign companies can establish operations in Oman through various forms, including Limited Liability Company (LLC), joint stock company, branch, commercial agency, and commercial representative office, subject to the relevant licensing and capital rules.

Free Zones

Oman has several free zones and special economic areas that may offer customs, tax, and ownership incentives under their own rules.

Benefits of Payroll Outsourcing in Oman

For our Payroll services in Oman, we have implemented a robust tool designed to operate seamlessly across diverse countries, ensuring consistency and meeting our clients’ specific needs. This tool reflects our commitment to:

Enhanced Security Measures

• Incorporating industry-leading security measures to protect sensitive data.
• Holding certifications such as ISO 27001, SOC, and GDPR compliance, ensuring strict adherence to information security protocols.

Consistent and Reliable Performance

• Ensuring sustainable performance to meet the dynamic demands of payroll services.

Flexibility and Scalability

• Providing flexibility and scalability to accommodate evolving client needs and adapt to changing business environments.

Collaborative Cloud Platform

• Utilizing a Cloud-based platform to facilitate collaborative work, promoting efficiency and accessibility across teams.

Key Features of Electronic Payroll Support:

Full Traceability

• Enabling a traceable process from generation to transmission and validation.
• Each step is meticulously validated by our expert team to ensure consistency.

Efficiency in Human Resources

• Streamlining the payroll settlement process to enhance the efficiency of the human resources area.
• Significant time savings achieved through optimized electronic payroll support.

Certified Suppliers

• Partnering with certified suppliers holding ISO 27001 certification, ensuring the highest standards of information security.
• Secure data transmission processes facilitated through these suppliers, bolstering the integrity of our services.

Mercans ensures clients in Oman benefit from top-tier information security standards, adhering to ISO 27001, SOC, GDPR, and OWASP guidelines.

Payroll Solutions in Oman

Discover the seamless payroll processing potential in Oman with Mercans’ Global Payroll Solutions. Our adaptable models guarantee local compliance, facilitate multi-currency transactions, and integrate seamlessly with global Human Capital Management (HCM) and Enterprise Resource Planning (ERP) systems. Ensuring accurate payments has never been simpler.

Explore Our Versatile Models:

• SaaS (Software as a Service): Customized for enterprise-level businesses managing multi-country payroll with intricate complexities, such as diverse data points, locations, currencies, and languages.
• Managed Services: Tailored for mid-sized and large enterprise businesses, our Managed Services model addresses the needs of those handling multi-country payroll.

Streamline Payroll with Mercans’ Technology and Integrations

Mercans leads the way in delivering outstanding payroll services in Oman, providing a diverse range of tailored solutions to meet our clients’ unique needs. Choose Mercans as your reliable partner, ensuring a smooth and effective payroll process in Oman’s dynamic business environment.

• Innovative Technology: Experience the forefront of innovation with Mercans’ state-of-the-art technology powering our global payroll solutions. Explore our technological advancements here.
• Seamless Integrations: Effortlessly integrate your Human Capital Management (HCM) systems with Mercans’ solutions, enhancing efficiency and connectivity. Discover the benefits of integration here.
• Recognition: Partner with an organization recognized for excellence. Mercans has received accolades for its dedication to delivering exceptional payroll services. Explore our awards and recognitions here.