Oman to make employers save 9% of expat workers’ basic pay from July 2027, tightens rules for recruitment agencies

Foreign workers in Oman, will start building savings from their employer’s contributions from 19 July 2027, when a mandatory provident fund takes the place of the end-of-service gratuity paid on leaving a job. Oman’s Social Protection Fund (SPF) has confirmed the start date. Separately, the Ministry of Labour has spelt out tougher rules for the agencies that hire expatriate workers, which apply from 1 January 2027.

Under the savings scheme, employers will pay 9 per cent of every foreign employee’s monthly basic salary into a personal account held through the SPF. The money and the returns it earns belong to the worker under Oman’s Social Protection Law, and can be taken in a single payment or in parts.

Gratuity already earned stays safe

Gratuity built up before 19 July 2027 remains protected. Employers can pick one of three routes: hold it and settle it at the time the worker leaves, worked out on the basic salary then; move the sum into the employee’s bank account once the scheme starts; or move it into the worker’s SPF account. The SPF counted over 1.06 million foreign workers on its insurance rolls in January 2026.

New duties for recruitment agencies

The agency rules, issued as Ministerial Decision No. 390 of 2026, give an agency 45 days from signing a service contract to bring the recruited worker into Oman. If it misses that deadline, the employer can cancel the contract or sign a written extension of up to 30 days. Employers get their recruitment fees back in full in specified cases during a worker’s first 90 days, or can accept a replacement instead; for domestic workers a partial refund can apply for up to two years.

Agencies must also insure their service contracts. Cover for death from natural causes and for qualifying disability starts once the worker lands in Oman or moves to the employer, and the premium should come to about 1 per cent of the contract value, said Dr Saif bin Mohammed Al Busaidi, adviser to the Labour Minister for Labour Welfare. Each agency has to lodge a RO5,000 guarantee with the labour ministry, a two-year licence costs RO300, and only Omani nationals can own an agency, be a partner in it or sign for it.