Oman mandates annual bonuses for private sector workers

MUSCAT: In a move to improve transparency and fairness in employee compensation, Oman’s Ministry of Labour has issued a new directive instructing minimum annual bonuses for Omani workers in the private sector.

The regulation, based on Royal Decree No. 53/2023 and Ministerial Resolution No. 541/2013, specifies eligibility criteria and standards for the disbursement of performance-based bonuses.

Within the new structure, Omani workers’ bonuses will be presented annually on January 1, depending on performance evaluations and a minimum of six months of service at their current establishment.

The bonus structure is designed to encourage performance and is classified according to employee ratings.

For those receiving an ‘Excellent’ rating, a bonus of 5 percent of their basic salary will be awarded. Employees rated as ‘Very Good’ will receive a 4 percent bonus, while those with a ‘Good’ rating will earn 3 percent.

A bonus of 2 percent will be given for an ‘Acceptable’ rating, but employees rated as ‘Poor’ will not be entitled to any bonus. This structured approach ensures that exceptional performance is recognised and rewarded accordingly.

Employees in Oman’s private sector reserve the right to appeal their evaluations through the Ministry’s administrative division.

In cases of corporate transfer, the establishment where the employee served the longest will prepare the performance report, while the receiving company must pay the bonus.

Conditions for Bonus Suspension

Due to specific circumstances, the Employer may suspend or reduce bonuses, like:

If the employee is under investigation for workplace-related misbehaviours or crimes. If innocent, bonuses must be paid retroactively.
If the employee takes unpaid leave or is not present for over six months during the bonus year.

Financial distress may explain bonus reductions, but only with approval from the Labour Law committee.

Penalties for Non-Compliance

Employers breaching the directive face an administrative fine of OMR 50 per concerned employee, enhancing responsibility across Oman’s private sector.

Workforce Snapshot

As of June 2025, Oman’s private sector has 864,600 Omani workers, with 406,000 working in the private sector.

Additionally, the country is home to 1.8 million foreign workers, of whom 1.4 million hold positions in the private sector.

This initiative marks a significant step in aligning Omani workers’ bonuses with global standards of performance-based compensation, fostering a more equitable and motivated workforce.