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Payroll & Tax in Oman

Your Payroll Options in Oman

Remote Payroll

A remote payroll in Oman is where a foreign company, i.e. a non-resident company, payrolls a resident employee in Oman. This applies to both local and foreign employees. One option for a non-resident company to payroll its employees (local and foreign) in Oman is to use a fully outsourced service like a GEO or PEO which will employ and payroll the staff on their behalf.

Local Payroll Administration

In some cases, a company will register their business in Oman under one of the forms available but prefer to have another company administer its payroll. This can be accomplished through a payroll provider. It is important to note that the company, as the Employer of Record, is still fully responsible for compliance with employment, immigration, tax and payroll regulations. But the payroll calculations, payments and filings can all be outsourced to the payroll provider.

Internal Payroll

PLC

Larger companies with a commitment to Oman may wish to run their own local payroll for all employees, foreign and local. In order to accomplish this, they will have to complete the incorporation, register the business and then hire the necessary staff. There will be a need for in country human resources personnel who have the background needed to manage a Omani payroll and can fulfil all tax, withholding tax and payroll requirements.

This approach carries significant cost and requires some knowledge of local employment and payroll regulations. The company will need a local accounting firm and potentially legal counsel to ensure full compliance with Oman employment laws.

Fully Outsourced Payroll & Employment

Companies can outsource the employment and payroll of their staff in Oman to a GEO, like Shield GEO. This is possible for both foreign workers and Oman nationals. This is the easiest, fastest and safest way to payroll staff in Oman.

Shield GEO manages all aspects of payroll for workers in Oman, including taxes, withholding, social security payments and other statutory requirements. Shield GEO becomes the Employer of Record and employs the staff on behalf of the client.

Staff are paid monthly with tax and social security deducted at source and paid to local authorities. Shield GEO will invoice the client monthly in advance of the payroll date. The invoice consists of the Total Cost of Employment (Base salary + Employers Statutory Contributions + Additional statutory contributions) and a Management Fee. Shield GEO provides the employees with payslips.

Read more about outsourced payroll and employment through Shield GEO.

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Setting up payroll in Oman

Information Explanation
Currency ?

Omani Rial (OMR)

Tax Figures

Information Explanation
Corporate Income Tax ?

Corporate taxation in Oman does not define residency as the determinant of corporate taxes. If a foreign company has provided services in Oman for 90 days or more in a 12 month period, or has a dependent agent in Oman, it is considered a permanent establishment and is subject to corporate taxation for the Oman-source income.

 

Corporate Income Tax is 12% applying to all businesses, branches and permanent establishments of any foreign company with taxable income exceeding OMR 30,000. Exclusions apply to petroleum industries.

Income Tax Rate ?
Grossed income Tax Rate (%)
Payroll Tax ?

There is no payroll tax in Oman.

Sales Tax ?

There is no sales tax in Oman.

Withholding Tax ?

Oman does not levy withholding taxes on dividends or interest.

 

There is a 10% withholding tax applied at source to payments for royalties and management fees. This tax applies to companies without a permanent establishment in Oman.

Employee Social Security (EE SS)

Employees who are Omani nationals are subject to social security contributions, levied at 18.5% of the employee’s gross salary. Only 7% of this contribution is payable by the employee.

 

Employees who are foreign nationals are not subject to social security payments.

Employer Social Security (ER SS)

Companies are required to pay 11.5% of the employee’s gross salary as social security contributions including a 1% payment for work related injuries. The withholding obligation lies with the employer.

 

The social security system of Oman is under a unified system of insurance protection coverage for Gulf Cooperation Council (GCC) members that cover workers in all GCC countries.

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