Payroll Services

Payroll in Oman has become more tightly regulated over the past year, with new rules under the updated Labour Law and stricter enforcement of the Wage Protection System. For companies operating in the country, especially those with international management or staff, there’s no margin for delay or guesswork. Payments must follow set procedures, meet timelines, and reflect the terms agreed in each employment contract. This article breaks down what employers need to know to stay compliant, pay staff correctly, and manage payroll with confidence in 2025.

Payroll basics in Oman

Oman runs on a monthly payroll cycle. Most companies use the 25th of the month as the cut-off date, with salaries due no later than the 18th of the following month. Payments must be made on a working day and recorded accurately through the Wage Protection System.

The minimum wage for Omani nationals is 325 OMR per month. This includes a basic salary of 225 OMR and allowances worth 100 OMR. There is no official minimum wage for expatriate workers, but their pay must still reflect fair market value and be clearly stated in the contract.

The standard workweek is capped at 45 hours, usually spread over six days. Any time beyond these counts as overtime. Daytime overtime is paid at 125 percent of the hourly rate, while night work is paid at 150 percent.

The Wage Protection System (WPS)

The Wage Protection System is mandatory for all private sector employers in Oman. It tracks salary payments and ensures staff are paid in full, on time, and in line with their contracts. Employers must transfer wages to local bank accounts, in Omani rials, within three days of the end of each pay period.

These transfers must go through financial institutions regulated by the Central Bank of Oman. Each payment is recorded and matched to the employee's contract details, so discrepancies are easy to spot.

The Ministry of Labour monitors compliance and can issue warnings, block new work permits, or fine employers 50 OMR per worker for each breach. Those fine doubles if repeated.

There are exemptions in limited cases, such as ongoing labour disputes or new hires still within their first month, but employers must apply for these in writing and provide full documentation if they want them approved.

Social security & job security contributions

Alongside WPS compliance, employers in Oman must also meet their obligations under the social security system. These contributions apply to Omani nationals only and must be handled through the Public Authority for Social Insurance, or PASI.

Employees contribute 7 percent of their salary each month. Employers pay 10.5 percent, plus 1 percent for work-related injury cover and another 1 percent toward the Job Security Fund, bringing the total employer share to 12.5 percent.

There’s a salary cap of 3,000 OMR for these calculations. Even if an employee earns more, contributions are only made up to that amount.

Each Omani hire must be registered with PASI within one month. The PASI number follows the employee if they change jobs. Expats are not covered by the system, so these contributions don’t apply to them.

Employment contracts & leave

A clear employment contract is the backbone of payroll compliance in Oman. It must be in writing and in Arabic. If another language is used, an Arabic version must be attached. The contract should set out the job title, duties, pay, working hours, leave entitlements, and the terms for ending employment.

Leave must follow the law. Employees are entitled to 30 days of paid annual leave each year, 50 days for maternity leave, 15 days for Hajj (once during employment), and a range of other allowances including sick leave, paternity leave, and compassionate leave.

End-of-service benefits also apply. Under the updated rules, expat workers now earn one month’s basic pay for each year of service. This replaces the old system of 15 days for the first three years, and 30 days after that.

Payroll setup & administration

To process payroll in Oman, a company must first register with the Ministry of Labour, the Public Authority for Social Insurance, and the Wage Protection System. These steps link each employee to a valid labour file and allow salary payments to be tracked.

Employers need a commercial registration number, a corporate bank account, and a system to collect and store employee records. This includes IDs, contracts, salary details, and bank information.

Payroll can be managed in-house or through a provider. Either way, the system must handle statutory deductions, track leave, and produce accurate payslips. Payslips should reflect gross pay, social security deductions for nationals, overtime, allowances, and net salary. Everything must match the figures submitted to the authorities.

Outsourcing payroll in Oman

Getting payroll right takes time, local knowledge, and careful tracking of every rule. For many companies, especially those based overseas, outsourcing this work is the safer option. A good local provider will handle registration, deductions, salary transfers, and reporting, while keeping your business in line with current law.

This reduces the risk of fines or payment delays and frees up your team to focus on other parts of the business. It also helps avoid errors caused by unfamiliarity with Omani systems. For new entrants to the market, that support can make a big difference.

How can Sovereign PPG help?

Sovereign PPG has deep experience in Omani labour law, payroll compliance and WPS registration. Our team works closely with local authorities to ensure your payroll is set up correctly from day one and runs smoothly every month.

If you need support with payroll management, PRO services, or any other business setup or compliance matter in Oman, Dubai, Abu Dhabi, the wider UAE, Qatar or Saudi Arabia, please get in touch with us on +971 (0)4 456 1761 for Dubai or +971 (0)2 448 5120 for Abu Dhabi. You can also email us at oman@sovereigngroup.com or complete the contact form below and we’ll be happy to help.