What are the PASI contribution rates in Oman?

For Omani nationals: employer contributes 10.5% and employee contributes 7% on basic salary. The maximum insurable salary for PASI purposes is adjusted periodically by the authority.

How is end-of-service indemnity calculated in Oman?

For the first 3 years: 15 days of basic salary per year. For each subsequent year: one month (30 days) of basic salary. Omani nationals covered by PASI receive pension benefits instead of lump-sum indemnity.

What are the working hours in Oman during Ramadan?

During Ramadan, working hours are reduced to 30 hours per week (6 hours per day) for all employees, as per Oman Labour Law provisions.

Oman Payroll Compliance Guide | PASI, Labour Law

Quick answer

Oman payroll compliance requires employers to register employees with PASI and remit social insurance contributions (employer 10.5%, employee 7% on basic salary for Omani nationals), comply with the Oman Labour Law (Royal Decree 35/2003) on working hours and leave, and calculate end-of-service indemnity at 15 days per year for first 3 years and one month per year thereafter. OfficeKit HR automates PASI calculations, leave tracking, and payroll processing for Omani entities.

Key regulations in Oman

Public Authority for Social Insurance (PASI)

Mandatory for Omani nationals working in the private sector. Employer contributes 10.5% and employee contributes 7% on basic salary. PASI covers old-age pension, disability, and death benefits.

Oman Labour Law (Royal Decree 35/2003 as amended)

Governs working hours (45 hours/week, 30 during Ramadan), annual leave (30 days), sick leave (10 weeks per year at varying pay rates), overtime rules, and termination procedures for private-sector employees.

End-of-Service Indemnity (EOSI)

Employees with 1+ year of service are entitled to indemnity: 15 days of basic salary per year for the first 3 years, and one month per year for each subsequent year. Omani nationals under PASI have a separate pension scheme.

Ministry of Labour Compliance

Employers must maintain accurate employment records, register with the Ministry of Labour, and comply with Omanization (Saudization equivalent) policies. Regular inspections ensure labour law compliance.

Compliance checklist for Oman

Configure salary components for PASI contribution calculations

Set up PASI rates: employer 10.5%, employee 7% on eligible salary components

Configure leave policies per Oman Labour Law (30 days annual leave, 10 weeks sick leave)

Run monthly payroll with auto-calculated PASI and mandatory deductions

Generate PASI contribution reports for monthly remittance

Calculate end-of-service indemnity: 15 days/year for first 3 years, one month/year thereafter

Track Ramadan working hours (30 hours/week) in attendance and scheduling

Maintain compliance registers for Ministry of Labour inspections

How OfficeKit HR helps with Oman compliance

OfficeKit HR centralises employee records, attendance, leave, and payroll in one system — reducing manual data transfer and compliance errors. Payroll rules for Oman are configured within the platform, and statutory filings are generated from the same data used for pay runs.

Multi-country groups running entities in India and the GCC can manage all payroll compliance from a single HRMS, with region-specific rules applied per entity.

Oman Payroll Compliance Guide