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Payroll in Oman

Payroll in Oman

Payroll in Oman is the list of all employees who are entitled to payments in the form of salaries from the company. This list needs to be properly kept by all employers. Under the term payroll, we can refer to the company’s requirements for making the needed salary/wage payments, as well as observing the social security contributions for its employees.

Our team can assist company owners with Omani payroll compliance and management, and our local team of specialists provides dedicated services concerning the needed payments to employees and on behalf of the employer. Observing certain requirements as an employer in Oman is essential, and our agents can help you comply with these.

Our lawyers in Oman offer complete solutions for opening a company in Oman, as well as for handling simple or more complex tax issues. You can reach out to us if you need information about the tax rates, as well as the tax treaties in force or the requirements imposed by the tax authorities.

The basics of payroll in Oman

As previously mentioned, there is no payroll tax applicable in Oman. This means that companies do not pay a separate tax, however, handling payroll also means making sure that the salaries/wages are paid according to the lawful minimum amounts, and on time, as well as ensuring that the taxes incurred as a result of having employed staff in Oman is properly and timely paid.

Social security contributions are due, as part of payroll in Oman. Our team briefly lists these below:

  • The employer contributes 10.5% of the employee’s monthly salary for social security purposes; this amount covers old age, disability, as well as death;
  • Another 1% of the monthly salary is payable by the employer for industrial injuries and illnesses;
  • The contributions mentioned above are due for Omani employees aged between 15 and 59 years, permanently employed in the private sector.
  • Omani private sector employees also make their share of the contribution (when aged between 15 and 59), in a percentage of 7% of their monthly salary.

Companies in Oman are subject to a relatively low taxation regime, partly explained by the fact that there is no tax for payroll in Oman. The corporate income tax rate is 15% and small companies are subject to a 3% corporate income tax.

If you would like to know more about the principles of taxation, our tax Omani lawyers can answer your questions.

Payroll services in Oman

Working with a local payroll provider is useful for companies, and many businesses outsource this essential and mandatory step. The solutions provided by our experts in payroll in Oman include the following:

  • Calculating the salaries/wages of the employees and making the due payments on time;
  • Withholding the social security contributions, as per the percentages mentioned above, due by the employer;
  • Filing the needed social security contribution forms;
  • Calculating, tracking, and making any additional payments to employees, as they may be necessary for bonuses or overtime payments.

These payroll services are commonly offered as part of the dedicated and personalized packages provided by our accountants in Oman. These can be adjusted to suit the needs of the business, according to its size, as well as the number of employees.

If you would like to know more about the employer’s obligations, as well as the basics of the Labour Law before you start doing business, our Omani lawyer specializing in employment matters can provide you with detailed information.

Omani taxes for companies

Doing business in Oman is attractive for a number of reasons, among which we can mention having access to certain tax exemptions (subject to conditions), full foreign property rights (subject to council consent), and having access to several free zones, all with the aim of varying the economy of the Sultanate.

There is no separate tax for payroll in Oman, however, companies are subject to the corporate income tax rate, however, under the reserve that this is significantly reduced for qualifying small companies. Investors should note that income derived from the sale of petroleum is subject to different conditions, and a special provisional rate of 55%.

Locally registered companies are subject to taxation on their entire income, while the permanent establishment of a foreign company is subject to tax only on its Omani-sourced income. Investors who wish to know more about payroll, taxes, and other compliance requirements for businesses can reach out to our local team of lawyers in Oman.