AUGUST 2025 – OMAN
MANDATORY ANNUAL SALARY INCREASES FOR OMANI EMPLOYEES
It is important that employers note the following:
Mandatory annual salary increases introduced for Omani employees in the private sector
The Oman Ministry of Labour (MOL) has issued Ministerial Decision No. 317/2025, which took effect on 28 July 2025. The new Ministerial Decision replaces the previous Ministerial Decision No. 541/2013, which mandated a 3% annual increase for employees who were appraised with satisfactory performance.
Ministerial Decision No. 317/2025 introduces a new performance-based structure for minimum annual salary increases for Omani employees in the private sector. Under the new framework, increases are awarded annually on 1 January, provided the employee has completed at least six months of service by that date. Non-compliance may result in administrative fines of OMR50 per violation.
The increases are calculated on the basic salary and are tied to the following performance ratings:
- Excellent: 5%
- Very Good: 4%
- Good: 3%
- Acceptable: 2%
- Weak/Poor: 0%
Employers may still offer more generous increases if they choose.
The decision also clarifies the process for Omani employees transferred between employers under Article 50 of the Labour Law. In these cases:
- The employer with whom the employee spent the majority of the year is responsible for preparing the performance evaluation.
- The receiving employer must pay the annual increase based on that evaluation.
This provision ensures that employees transferred within the same project maintain continuity in salary reviews and benefits, in line with the protections under Article 50, which guarantees that transferred employees retain the same salary, benefits, and incentives with the new employer.
Please note that the official Ministerial Decision is not publicly available.
