Overtime Calculation based on labor law in Oman

Labor law Decree No. 35/2005 of Oman explains the labor rights of workers in all aspects and everything the employee and employer must know about the work contract. Before getting an employee on board, the human resource consulting department of the company must brief rights and obligations to the employee at the time of orientation. There are various HR outsourcing companies that provide HR solutions to companies who choose to outsource employees within or outside the company. These HR outsourcing companies usually take responsibility for laws and regulations of the respective country, guiding the hiring company to keep labor laws in order.

With reference to the labor law of Oman, salaries, overtime, end of employment benefits and leaves are defined in detail for the employees. The clause for Omani overtime law is well discussed in law Decree No. 35/2005 from article 70 to article 72.

What is Overtime in employment?

In employment, the worker is paid for the number of hours he serves to the job. The salary of a worker is usually calculated at the rate of working hours. However, in many contracts, there is an agreement of paying an increased amount of salary upon working for more than a decided number of hours. The increased amount in a salary that is paid due to extended hours of work is known as overtime. To understand overtime and salary distribution in case of prolonged working hours, it is always a great idea to contact a human resource consulting company and have expert HR solutions

Working Hours in Oman

In accordance with the labor law of Oman, article 68 states that normal working hours for an employee should be 8 hours per day or 48 hours per week. According to the law, there is a slot of 1 hour every day which should be spent as a break. This break can be utilized for meals or for employees’ rest.  There are various professions in which the workers usually work for 10 to 12 hours such as hotel workers, taxi drivers, and security guards. The law states to consider every extra hour than 8 hours on the job as overtime and must be added to the salary.

Why is there a Need for a Proper Payroll System in Oman

What are the types of Overtime in Oman Labor Law?

In the Omani Labor Law, there are two articles that define two different types of calculations for overtime.

  • Regular Daytime Overtime – As per Article 68, the regular working hours for a worker are 8 hours per day or 48 hours per week. The no. of hours that exceed 8 hours per day is considered to be overtime. The rate is an increase of 25% of his salary for regular overtime.
  • Night Shift Overtime – If a worker is asked to work during 2100 HRS to 0400 HRS other than regular working hours of the day, it is then considered as night shift overtime. For the night shift over time, an increased rate of 50% of the salary should be paid.

Calculations for Overtime

  • In the case of Regular Daytime Overtime:

Let us assume the gross salary of a worker to be 500 OMR

Salary per Day = 500 x 12/365 = 16.43 per day

Salary per Hour = 19.72/8 = 2.05 OMR

Total Overtime = Total No. of Overtime hours x Salary per Hour x 1.25 (25% increase in salary)

As an example, if the employee serves 4 extra hours of overtime so the calculation would be;

4 x 2.05 x 1.25 = 10.25 OMR per hour overtime

  • In the case of Night Shift Overtime:

Let us assume the gross salary of a worker to be 500 OMR

Salary per Day = 500 x 12/365 = 16.43 per day

Salary per Hour = 19.72/8 = 2.05 OMR

Total Overtime = Total No. of Overtime hours x Salary per Hour x 1.5 (50% increase in salary)

As an example, if the employee serves 2 extra hours of overtime so the calculation would be;

2 x 2.05 x 1.5 = 6.15 OMR per hour overtime

Looking for the best HR Solutions in the Middle East?

We at Payroll Middle East simplify the HR solutions for your company in the entire Middle East region enabling you to maintain stress-free management of staff, payroll, and other human resource functions. We are known to be one of the best Payroll outsourcing companies in Oman. If your company has staff working on an overtime model, we can guide you best to plan the payroll. Contact us today and avail the best human resource consulting services!