Employers across Oman will be required to comply with new payroll and leave-management obligations from Sunday, July 19, as the insurance branch covering sick leave and other eligible forms of leave comes into force under the Social Protection Law.
The new scheme introduces a mandatory contribution equivalent to 1 per cent of each covered worker’s contribution wage, with the cost to be borne entirely by employers. Employees will not be required to make any separate contributions toward this insurance branch, according to an Oman Observer report.
The insurance scheme will apply to eligible Omani workers, as well as specified categories of non-Omani employees across both the public and private sectors, marking another key step in Oman’s ongoing social protection reforms.
Three-year legislative process
In the second edition of its Himaya bulletin for July 2026, the Social Protection Fund said the new insurance branch is designed to reimburse employers for eligible leave allowances, along with related insurance contributions. The Fund said the initiative is intended to strengthen employment and social stability while supporting business continuity.
The rollout follows a three-year legislative process that began with the promulgation of the Social Protection Law under Royal Decree No. 52/2023. The legislation established sick and other leave insurance as one of the Sultanate’s social insurance branches.
The provisions were originally due to take effect two years after the decree was issued on July 19, 2023. However, Royal Decree No. 60/2025 extended the implementation period by an additional year, shifting the commencement date to July 19, 2026.
Coverage and employer obligations
A Social Protection Fund decision issued in June identified the categories of non-Omani workers subject to compulsory coverage. These include expatriate employees working in units of the state administrative apparatus, other public legal entities, and private-sector establishments governed by the Labour Law.
The most immediate impact for businesses will be the additional 1 per cent payroll-related contribution. Employers will also remain responsible for paying employees during eligible leave periods before submitting electronic compensation claims to the Social Protection Fund.
For sick leave, employers must continue paying the worker’s full wage during the first seven days of absence. From the eighth day onward, the insurance branch will cover the eligible allowance, provided medical evidence is submitted and all legal conditions are met.
According to the Fund, sick leave may be covered for up to 182 days in a calendar year. Compensation is calculated at 100 per cent of the worker’s wage from the eighth to the 21st day, 75 per cent from the 22nd to the 35th day, 50 per cent from the 36th to the 70th day, and 35 per cent from the 71st to the 182nd day.
According to the Fund’s public guidance on sick and other leave insurance, employers must first pay the eligible amount to the worker before applying to the Social Protection Fund for reimbursement.
Preparing for implementation
The insurance branch also extends to specified forms of other leave, including eligible periods related to marriage, bereavement and accompanying relatives for medical treatment. Payments will remain subject to the qualifying periods, supporting documentation and other conditions stipulated under the law.
In certain cases, the scheme will also cover specified old-age, disability and death insurance contributions during approved leave, helping ensure continuity in an employee’s insurance record.
With the new rules taking effect on July 19, employers are expected to ensure payroll systems are updated to calculate the new contribution accurately. Human resources teams will also need to maintain up-to-date employee records, contribution-wage data, medical evidence and other supporting documents to facilitate compensation claims under the new framework.
