Oman rolls out sick leave insurance scheme from July 19

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

The new scheme introduces a 1  per cent employer-funded contribution based on each covered employee's contribution wage. Workers will not be required to make separate contributions.

The Social Protection Fund said the insurance branch will cover eligible Omani employees as well as specified categories of expatriate workers in both the public and private sectors.

The reform is part of Oman's wider overhaul of its social protection system under Royal Decree No. 52/2023, which established the Social Protection Law. 

Although the provisions were originally due to take effect two years after the law was issued, Royal Decree No. 60/2025extended the implementation period by one year, setting July 19, 2026, as the official launch date.

According to the Social Protection Fund, the scheme is designed to compensate employers for eligible sick and other leave allowances, while strengthening employment stability, social protection and business continuity.

Under the new framework, employers will continue paying employees during approved leave before submitting reimbursement claims electronically to the Fund. 

For sick leave, employers will cover the worker's full salary during the first seven days of absence.

From the eighth day onwards, the insurance branch will reimburse eligible payments, subject to medical evidence and other legal requirements.

The scheme provides sick leave coverage for up to 182 days a year, paying 100 per cent of wages from days eight to 21,75 per cent from days 22 to 35, 50 per cent from days 36 to 70, and 35 per cent from days 71 to 182.

The insurance branch also covers specified categories of leave related to marriage, bereavement and accompanying relatives for medical treatment.

In certain cases, it will also pay eligible old-age, disability and death insurance contributions during covered leave periods, helping preserve employees' insurance records.

The introduction of the scheme will require employers to update payroll systems to calculate the new contribution and maintain accurate employment, wage and medical records needed to process reimbursement claims.