MUSCAT : Employers across Oman will be required to make additional social insurance contributions and adapt payroll and leave-management systems from July 19, when the sick leave and other leave insurance branch under the Social Protection Law comes into force.

The new scheme introduces an employer-funded contribution equal to 1% of a worker’s contribution wage. Employees will not be required to make a separate contribution toward the insurance branch.

The Social Protection Fund said the scheme will cover eligible Omani workers as well as specified categories of non-Omani employees in both the public and private sectors. A decision issued by the Fund in June identified expatriate employees in units of the state administrative apparatus and other public legal entities, along with workers in private-sector establishments governed by the Labour Law, as being subject to compulsory coverage.

The implementation marks the latest phase of Oman’s social protection reforms launched under Royal Decree No. 52/2023, which established the Social Protection Law and introduced sick and other leave insurance as one of the country’s social insurance branches.

The provisions were originally scheduled to take effect two years after the decree was issued on July 19, 2023. However, Royal Decree No. 60/2025 extended the implementation period to three years, setting the commencement date for July 19, 2026.

In its July 2026 bulletin, the Social Protection Fund said the new branch is designed to compensate employers for eligible leave allowances and related insurance contributions while supporting employment stability, social protection and business continuity.

Under the scheme, employers will continue to pay workers during eligible leave periods before submitting compensation claims electronically to the Social Protection Fund.

For sick leave, employers will bear the employee’s full wage during the first seven days of absence. From the eighth day onward, the insurance branch will cover eligible allowances, subject to medical evidence and other legal requirements.

Coverage can continue for up to 182 days within a year. Compensation is calculated at 100% of the worker’s wage from the eighth to the 21st day of leave, 75% from the 22nd to the 35th day, 50% from the 36th to the 70th day and 35% from the 71st to the 182nd day.

According to guidance issued by the Fund, employers must first pay the eligible amount to the worker before applying for reimbursement.

The insurance branch also extends to specified categories of other leave, including eligible periods linked to marriage, bereavement and accompanying relatives for medical treatment. Payments remain subject to the periods, conditions and supporting documentation prescribed under the law.

In certain cases, the branch will also cover specified old-age, disability and death insurance contributions during covered leave periods, helping maintain continuity in an employee’s insurance record.

The introduction of the scheme will require employers to ensure payroll systems can calculate the new 1% contribution from the implementation date. Human resources departments will also need to maintain accurate employee records, contribution-wage data, medical evidence and supporting documentation required for reimbursement claims.

The Social Protection Fund said the measures are intended to strengthen Oman’s social protection framework while reducing the long-term financial burden on employers arising from extended employee absences.

For all the latest news from Oman and GCC, follow us on Twitter, Instagram and LinkedIn, like us on Facebook and subscribe to our YouTube page, which is updated daily.