Muscat HR guide: Royal Decree 53/2023 for small teams

Hiring and the contract

Article 33 says the employment contract must be in writing, in Arabic, in two copies, and approved by the competent entity. A contract in another language is allowed if an Arabic copy agreed by both sides is attached. Article 34 caps a fixed term at five years, renewable by agreement. Article 35 turns a fixed term contract into an open ended one when it expires and both sides simply carry on without a written agreement, so a contract end date belongs in a calendar someone opens.

Article 36 lists what the contract must contain: the parties, the type of work, the basic wage and every allowance, the date wages are paid and the notice period for not renewing. Employer notice may not be shorter than a month. Article 52 then requires a file for each worker with the occupation, the start date, wage details, leave taken, penalties, performance reports and the reason service ended. Keep it for at least a year after the employment ends.

Probation is optional under Article 37: the contract may set it, up to three months for a monthly paid worker and two months for anyone else. You cannot put the same person on probation twice, and the period counts as service if they pass. Either side may end the contract during it, after at least seven days' notice. After probation, an open ended contract needs 30 days' written notice from either side (Article 38), and the party that skips the notice pays the other the notice period at the final gross wage.

HR FLARE has e-signature for contracts and policies and a recruitment module that carries a candidate to an employee record. Neither replaces the ministry's approval of the contract or the work permit for a non-Omani hire.

Hours, overtime and rest

Two details in Article 70 catch small teams. The 8 hour day includes no meal break, and the continuous stretch is capped at 6 hours, so a straight 8 to 5 day with one lunch hour in the middle works, but a seven hour run without a break does not. The employer must also post the schedule of hours and weekly rest days in a visible place. Article 77 gives at least two consecutive paid rest days a week, and the worker cannot lose them because of an absence.

Overtime in Article 71 needs the worker's consent. Total hours cannot pass 12 in a day. Daytime overtime pays the basic wage for the extra hours plus at least 25%, night overtime (9 pm to 5 am, per Article 1) at least 50%, or the employer can grant time off instead. On a weekly rest day or an official holiday the employer pays 100% of the daily basic wage on top of the day's wage, or gives a replacement day for each day worked. Article 72 lets the employer require overtime without consent for inventory and closing work (up to 15 days a year) and for emergencies, with higher premiums of 50% by day and 75% by night.

The summer rule is separate. The Ministry of Labour says outdoor work is stopped between 12:30 and 3:30 pm from June to the end of August, and Gulf News reported in 2025 that it rests on Article 16(2) of the occupational safety and health regulations. We could not open the regulation itself, so treat the dates as the ministry's announcement and ask the ministry for the legal text before you write it into a contract.

In HR FLARE each person plans their own schedule, and no manager rota is needed. The weekly timesheet total sits next to the 40 hour and 30 hour limits, so you can read the figure for the pay run. It does not work out overtime premiums or tax for you.

Holidays and leave

Royal Decree 88/2022 sets the official holidays: Hijri New Year (1 Muharram), the Prophet's Birthday (12 Rabi al-Awwal), Isra and Miraj (27 Rajab), Eid al-Fitr from 29 Ramadan to 3 Shawwal, Eid al-Adha from 9 to 12 Dhu al-Hijjah, Accession Day and National Day. Royal Decree 15/2025 moved National Day to 20 and 21 November from 18 and 19 November. If a weekend day falls in a holiday it is compensated by one day, and Friday is compensated when it is the first day of Eid. Article 79 keeps the gross wage payable on official holidays. The portal's text of the Accession Day entry shows no date, so confirm that one with the government calendar.

Annual leave under Article 78 is at least 30 days on gross wage, available after six months of service. A worker can carry up to 30 unused days. Article 81 lets you postpone leave by up to six months for work reasons, requires leave of at least 30 days once every two years, and pays unused days in full when service ends. A non-Omani worker is entitled to the return ticket agreed in the contract.

Sick leave in Article 82 runs up to 182 days a year: 21 days at 100% of gross wage, to day 35 at 75%, to day 70 at 50%, and to day 182 at 35%, backed by a medical certificate. Article 84 lists paid special leave:

• Maternity: 98 days around birth, with no more than 14 days before it.
• Paternity: 7 days, taken before the child is 98 days old.
• Bereavement: 3 days for a parent, grandparent or sibling, 10 for a wife or a child, 130 days for a Muslim widow and 14 for a non-Muslim widow.
• Hajj: 15 days once in the whole service, after a year with the employer.
• Marriage: 3 days. Exams for an Omani student: up to 15 days a year.

Every leave in Article 84 needs proof, and HR FLARE asks for a reason on every leave request, so the evidence trail starts in the request.

Pay, deductions and the Wage Protection System

Article 85 requires pay in Omani rials unless a legally circulating currency is agreed. Article 87 says an employer is not discharged of the wage unless it is transferred to the worker's account at an approved local bank or a financial institution licensed by the Central Bank of Oman, and Article 86 puts the burden of proving payment on the employer. Article 90 sets the date: monthly staff at least once a month on a working day and, in all cases, within three days from the end of the period in which the wage is due.

Ministerial Decision 729/2024 builds the Wage Protection System on those articles. KPMG's note says it took effect on 16 December 2024, replaced Decision 299/2023, exempts newly hired workers in their first 30 days and workers on unpaid leave, and allows a warning, a suspension of preliminary work permits or a fine of OMR 50 per worker, doubled on repeat. We read that through KPMG and could not open the ministry's own copy, so ask your bank or the ministry for the current text and phase dates.

Deductions are narrow. A fine for one violation is capped at five days of wage a month (Article 65). Damage a worker causes on purpose can be deducted up to 25% of monthly wage after an investigation (Article 68). Article 96 limits any withholding of wages to one fourth, for maintenance debts or sums owed to the government or the employer. On the last day, Article 56 requires all dues immediately, or within seven days if the worker abandoned the job.

HR FLARE keeps the monthly payroll record and the payslip, and you can set the company currency to OMR. It does not create the WPS file, move money, or calculate tax or contributions, so your bank and your own sheet remain part of the run.

The Social Protection Fund and gratuity

The Social Protection Law came into force on 1 January 2024, with some branches phased in later. The employer rates in the law are 11% for old age, disability and death (Article 70), 1% for work injury (Article 90), 0.5% for employment security (Article 116), 1% for sick leave and extraordinary leave (Article 123) and 1% for maternity leave (Article 128), so 14.5% in total. The insured worker pays 7.5% for the pension branch and 0.5% for employment security. Article 52 sets the wage ceiling for the pension and injury branches at OMR 3,000 a month.

Under Article 124 the employer pays the first seven days of an insured worker's sick leave at full wage, and the fund covers the rest. The sick leave branch and the maternity branch apply to non-Omanis by categories the fund's board decides, so a rule for your expatriate staff may differ from the one for Omanis.

For workers outside the pension cover, Article 61 of the Labour Law still sets the gratuity: not less than the basic wage for each year of service, in proportion for part years, based on the final basic wage. The same article says it applies until the savings system in the Social Protection Law starts. Royal Decree 60/2025 left that start to the fund's board with an outer limit of four years from the issue date of Royal Decree 52/2023, which was 19 July 2023, so 19 July 2027 at the latest. Secondary reports quote a 9% contribution rate. We did not find that figure in the law, so we do not repeat it as fact.

A worked example for today's rules: a non-Omani worker with a basic wage of OMR 600 who leaves after four and a half years is owed at least 4.5 times OMR 600, which is OMR 2,700, before any amounts that are proven owing to you are deducted under Article 96.

Omanisation and what changes at 25, 40 and 50 staff

Article 23 leaves the Omanisation percentages to ministerial decisions by sector, activity and occupation. We could not open the current list, so this page quotes no percentage. The law itself tells you what to expect. Article 27 conditions a labour authorisation for a non-Omani hire on your compliance with the approved plan and percentages, and Article 144 fines a missed percentage OMR 500 to 1,000 for each Omani who should have been hired, with six months to put it right and a doubled fine on repetition. Article 19 asks you to update your register of Omani workers in January each year.

Headcount triggers sit in the same law:

• 25 workers: announce vacancies with criteria, provide performance appraisal systems and a leadership plan for Omanis (Article 22), and write a penalties regulation for ministry approval (Article 55). A rest room is required when you employ more than 25 women (Article 60).
• 40 workers: employ qualified Omanis with disabilities in suitable jobs, up to a percentage the minister sets (Article 24).
• 50 workers: a work system regulation approved by the ministry, which covers appraisal, promotion and pay categories (Article 54).

A team that is hiring its twenty fifth person should plan for the appraisal and penalties documents in advance. HR FLARE has performance reviews and an org chart that you can use as the records, and the AI assistant answers questions about your own team in your language.

Setting up the company: registry and free zones

The Oman Business Platform, run by the Ministry of Commerce, Industry and Investment Promotion under the Invest Easy name, handles commercial registration. Its New Commercial Registration page says the certificate is issued as soon as the application is finished and you can trade immediately, while supervisors can check the name, the investors and the documents afterwards and suspend a registration that breaks the rules. Its FAQ says online registration needs a PKI enabled eID card for every investor, and that underage investors must register at the front office. The entity list includes limited liability companies, joint stock companies, foreign company branches and the House Trade Business, which is for Omani individuals only. An annual report is due within six months after the financial year ends.

The Public Authority for Special Economic Zones and Free Zones lists the Sohar Free Zone, the Duqm Special Economic Zone, the Salalah Free Zone, the Al Mazunah Free Zone, the Muscat Airport Free Zone, Khazaen Economic City and the Madayn industrial estates on its site. We did not verify tax or ownership terms for any of them, and Invest Oman's own site did not open to a page we could cite for incentives. A Muscat office is a mainland company unless it is inside one of these zones, so read the zone's own rules before assuming the Labour Law steps differ.

A year in a Muscat small business

January: update the Omani worker register under Article 19. Spring: check the summer outdoor rule with your site leads before May ends. The date of each Hijri holiday moves by roughly eleven days a year, so build the calendar after the official notice. November: National Day on 20 and 21 November. Throughout: pay within three days of each period's end, and put each fixed term contract's end date and each probation's end date into one shared calendar.

What HR FLARE does not do

• No Oman WPS file: your bank prepares the transfer file and pays salaries; HR FLARE keeps the payroll record.
• No SPF or tax calculation: contributions are worked out and paid outside HR FLARE.
• Data location: data is hosted in Europe; in-country hosting is not available.