Private sector employees in Oman now have clear rules on how annual performance-based bonuses will be handled, thanks to a new decision from the Ministry of Labour.
Effective from January 1 every year, Omani workers with at least six months of service at their current establishment are entitled to a periodic bonus, based on the outcome of their annual performance evaluation. The decision is part of efforts to ensure transparency and fairness in pay structures and is rooted in the country’s updated Labour Law (Royal Decree No. 53/2023).
The periodic salary bonus is paid as a percentage of an employee’s basic salary, according to their evaluation result:
- 5% bonus – for an ‘Excellent’ rating
- 4% bonus – for a ‘Very Good’ rating
- 3% bonus – for a ‘Good’ rating
- 2% bonus – for an ‘Acceptable’ rating
- No bonus – if rated ‘Poor’
Employees also have the right to appeal their evaluation results with the Ministry’s administrative division.
Companies that fail to follow the bonus rules may face an administrative fine of OMR 50 per affected employee.
Additional Conditions and Rights
- The employer where the employee worked longest during the year will prepare the evaluation
- Transferred employees are still entitled to the bonus, paid by the new employer
- Bonus reduction is possible for valid economic reasons — subject to committee approval
The bonus can be suspended if the employee is:
- Involved in a criminal case under investigation
- On unpaid leave or absent for more than six months in a year
In another major development, Oman’s first Personal Income Tax Law is set to take effect from 2028, signalling wider economic reforms. If you’re working or planning to work in Oman, it’s worth checking the early details to stay prepared.
