Oman’s 2026 payroll compliance for companies centres on the standardised Unified Labour Contract for expatriates, mandatory PASIs (Public Authority for Social Insurance) registration and reporting, and stricter rules around contract renewals and salary transfers under Royal Decree 53/2023. These reforms, effective since late 2023 but with 2026 enforcement clarifications, prioritise Omanisation, digital contract registration, and social insurance alignment, with several procedural details often overlooked by HR teams.
Unified Labour Contract for expatriates
Under Royal Decree 53/2023, all expatriate employment contracts must follow a unified template registered electronically with the Ministry of Labour, specifying job type, basic wage, allowances, working hours (max 8/day or 48/week), notice periods (min 1 month from employer), and Oman’s laws/customs clause. Non-standard contracts are void unless more favourable to workers, and unregistered ones block work permits and visa renewals.
- Contracts are fixed-term (max 5 years total, including renewals) or indefinite; exceeding 5 years auto-converts fixed to indefinite, affecting end-of-service calculations.
- Expat job-switching is now automatic: if contracts aren’t registered within 30 days of work permit renewal, service transfers to a new employer without No Objection Certificate (NOC).
- Arabic version mandatory alongside any other language; all must detail basic wage separately from allowances to ensure PASIs and gratuity accuracy.
A less-discussed rule: employers must report Omani vacancies annually (Jan) via ministry portal, including wages/benefits, with non-compliance risking Omanisation penalties tied to payroll data.
PASIs registration and reporting requirements
PASIs mandates registration of all employees (Omani/expat) within 30 days of joining, with monthly contributions (7% employer + 7% employee on basic wage up to OMR 500 cap) filed electronically by the 15th. 2026 guidance stresses alignment between contract basic wage, payroll records, and PASIs filings to avoid audits.
- Changes (promotions, part-time shifts, terminations) must update PASIs within 15 days; mismatches trigger fines (OMR 10/day) and block permit renewals.
- Omanisation interacts with PASIs: underpaid Omanis (below sector mins) may not count toward quotas, visible via contribution data.
- New 2026 salary increments for Omanis (5-2% on basic, effective Jan 1, post-6 months service) must reflect in PASIs immediately to maintain compliance.
Overlooked by HR: part-time Omani regs (4-25 hrs/week) require pro-rated PASIs but full Omanisation credit if wages meet thresholds key for quota optimisation.
Contract renewal and salary transfer rules
Salary transfers must be via approved Omani banks, with proof submitted to the Ministry within 7 days of payday; delays halt renewals and expose to Omanisation downgrades. Renewals need mutual consent, mutual Arabic contracts, and PASIs updates.
- Fixed contracts auto-end if not renewed pre-expiry; no tacit renewal beyond 5 years without explicit agreement.
- Termination notice min 1 month (employer), with poor performance needing 6-month improvement documented; unfair dismissal capped at 12 months’ pay.
- End-of-service: 15 days basic per year (first 5 yrs), 1 month thereafter, pro-rated must match PASIs basic wage history.
Under-discussed: probation (3 months monthly-paid, 1 month others) counts toward service but allows termination without notice; must state explicitly in a unified contract.
Under-discussed 2026 priorities for HR in Oman
These lesser-highlighted policies are vital for companies to avoid silent compliance gaps.
- Omanisation reporting: Monthly vacancy statements to Ministry, with training plans for Omanis; non-filing blocks expat quotas.
- Domestic worker rules (MD 574/2025): Max 12 hrs/day, 8 hrs rest, employer-provided housing/food/return travel within 30 days termination.
- Anti-discrimination bans: No termination for pregnancy/breastfeeding; recruitment ads can’t specify creed/colour.
- Temporary assignments: Allowed between employers to cut expat costs, but requires contract amendments and PASIs notice.
For Oman companies, 2026 payroll success means embedding unified contracts, PASIs sync, and salary proofs into core HR systems—directly safeguarding Omanisation, permits, and dispute avoidance under RD 53/2023.