Oman employment law: the 2023 Labour Law and the move to a savings system
Oman's private sector follows the Labour Law of Royal Decree 53/2023. It caps probation at 3 months for monthly-paid staff, sets 30 days' notice for them and gives at least 30 days' annual leave. Expatriates still earn an end-of-service gratuity of at least one basic wage a year until a 9% employer-funded savings system replaces it, no later than 19 July 2027.
What Teamed handles in Oman
- Approved Arabic employment contracts
- Gratuity until savings contributions start
- Omanisation register and annual plan
Oman's sick leave insurance branch is now in force
What happened
The Social Protection Fund's insurance branch for sick leave and extraordinary leave came into force on 19 July 2026, three years after the Social Protection Law was issued, as Royal Decree 60/2025 set. Employers pay 1% of the insured worker's monthly wage for it.
What it means for you
Payroll in Oman carries one more employer contribution line. The law makes the branch compulsory for non-Omani workers in the categories the Fund's board decides, so check which of your expatriate staff it covers.
Dates to know
- 19 July 2026Sick leave and extraordinary leave insurance branch in force
- 19 July 2027 at the latest9% savings system for non-Omani workers replaces the gratuity
- 19 July 2028Work injury insurance branch applies to non-Omani workers
Source: Oman News Agency. We check this page every week. Last checked .
Oman employment law means the rules a private sector employer in the Sultanate must follow when it hires, pays and lets go of staff. The core statute is the Labour Law issued by Royal Decree 53/2023, which covers contracts, probation, working hours, leave, notice, the end-of-service gratuity and Omanisation. Social insurance, the new savings system for expatriates and the leave insurance branches sit in a separate statute, the Social Protection Law issued by Royal Decree 52/2023 and run by the Social Protection Fund. The Ministry of Labour sets Omanisation percentages and the list of jobs reserved for Omanis by ministerial decision.
Which law governs employment in Oman?
The Labour Law issued by Royal Decree 53/2023 on 25 July 2023, which replaced the 2003 Labour Law. Contracts must be written in Arabic, or carry an Arabic copy both sides approve, and fixed terms can run up to 5 years. See the full guide to Oman contracts, probation, notice and leave.
How long can probation last, and how much notice applies?
Probation is capped at 3 months for monthly-paid staff and 2 months for others, and notice on an indefinite contract is 30 days for monthly-paid staff and 15 days for others. Staff work up to 8 hours a day and 40 a week and get at least 30 days' annual leave. See the full guide to Oman contracts, probation, notice and leave.
What happens to end-of-service pay for expatriates?
For now the employer pays a gratuity of at least one basic wage for each year of service under Article 61. A 9% employer-funded savings system replaces it on a date the Social Protection Fund's board sets, no later than 19 July 2027, and gratuity earned before then is still owed. See the full guide to Oman end-of-service and the savings system.
What social insurance applies in Oman?
For Omani staff the employer pays 11% of monthly wage and the worker 7.5% for pensions, plus 1% employer contributions for work injury, maternity and, since 19 July 2026, sick leave. Employment security insurance adds 0.5% from the employer and 0.5% from the worker (Social Protection Law, Article 116). Wages must be paid into a local bank account. See the full guide to Oman payroll and social protection.
How does Omanisation work?
Every employer must employ Omanis, and the Minister of Labour sets Omanisation percentages by sector, activity and profession and lists jobs reserved for Omanis. Employers file a register and annual Omanisation plan each January. See the full guide to Omanisation.
Key figures
| Detail | Value |
|---|---|
| Governing statute | Labour Law issued by Royal Decree 53/2023 on 25 July 2023, repealing the Labour Law of Royal Decree 35/2003. In force from the day after publication in Official Gazette No. 1504, with 6 months for employers to adjust. (source) |
| Probation | Up to 3 months for staff paid monthly and up to 2 months for others, once per employer. Either party may end the contract during probation with at least 7 days' notice. (source) |
| Notice for indefinite contracts | 30 days' written notice for monthly-paid workers and 15 days for others, unless the contract sets longer. The ending must rest on a legitimate reason. (source) |
| Annual leave | At least 30 days on gross wage, taken after 6 months with the employer. Up to 30 unused days may be carried over unless leave was missed for the needs of the work. (source) |
| End-of-service gratuity (until the savings system starts) | At least one basic wage for each year of service, pro rata for part years, on the last basic wage, for workers not covered by the Social Protection Law. Service before the 2023 law counts. (source) |
| Savings system for non-Omani workers | Compulsory for non-Omani workers and funded by 9% of the monthly basic wage. It replaces the employer-paid gratuity; gratuity for service before the start date is still owed under the Labour Law. (source) |
| Savings system start date | Set by the Social Protection Fund's board, no more than 4 years from the issue of Royal Decree 52/2023 (19 July 2023), so no later than 19 July 2027. (source) |
| Social insurance for Omanis | Old age, disability and death: 11% of monthly wage from the employer and 7.5% from the worker. Work injury, sick leave and maternity leave branches: 1% each, paid by the employer. (source) |
| Omanisation | Employers must employ Omanis. The Minister sets Omanisation percentages by sector, activity and profession, and the jobs non-Omanis may not do; employing a non-Omani in a reserved job is prohibited. (source) |
Frequently asked questions
Can probation in Oman last 6 months?
No. Under Article 37 of the 2023 Labour Law probation cannot exceed 3 months for staff paid monthly, or 2 months for staff paid another way, and it can only be used once with the same employer.
Do I still pay end-of-service gratuity to expatriates in Oman?
Yes, until the savings system starts. Article 61 requires at least one basic wage per year of service. When the 9% savings contributions begin, no later than 19 July 2027, they replace the gratuity for later service, and gratuity already earned is still owed.
Who pays the 9% savings contribution?
The Social Protection Law funds the savings system with 9% of the non-Omani worker's monthly basic wage. The executive regulation places the duty to pay contributions for non-Omani insured workers on the employer.
Each of the six Gulf states writes its own labour law, its own end-of-service rules and its own quota for hiring citizens. When Teamed is your legal employer, we apply the right rules for the country each person works in and update your contracts, policies and payroll as the law changes, so you never have to read a statute to stay compliant.
