The New Oman Social Protection Fund Law - Key Changes


The Sultanate of Oman as a welfare state has for long operated under the old Public Authority for Social Insurance (PASI) Law (Royal Decree 72/9).

Recently however, Oman has enacted the novel Social Protection Fund Law (SPFL) (Royal Decree 52/2023) in an attempt to enhance its social welfare framework by creating a single and unified social protection fund that improves financing and provides a wide range of benefits to workers and their families.

This article provides an overview of some of the key aspects of the new law and compares it with its repealed predecessor, by highlighting the key impacts it would have on individuals and businesses alike.

Implementation Dates

The provisions of the SPFL will take effect on 1 January 2024, except as follows:

  1. Articles (72, 75, 76, 77, 83, 84) of SPFL, which came into force on 19 July 2023;
  2. the provisions concerning work injuries and occupational diseases insurance branch for non-Omani workers of the SPFL, which shall come into force on 19 July 2026;
  3. Chapter 6 of Title 3 of the SPFL, which shall come into force on 19 July 2025;
  4. Chapter 7 of Title 3 of the SPFL, which shall come into force on 19 July 2024; and
  5. Clause (1) of Article (139) of the SPFL which shall come into force from the date the date specified by the Board of Directors of the Social Protection Fund, and no later than 19 July 2026.

A Single Unified Fund

The SPFL abrogates the following laws:

  • Royal Decree 26/86 Promulgating the Law on Pensions and End of Service Gratuity for Omani Government Employees
  • Royal Decree 72/91 Promulgating the Social Insurance Law
  • Royal Decree 86/96 Promulgating the Law on Pensions and End of Service Gratuity for Omani Employees of the Diwan of Royal Court
  • Royal Decree 94/2000 Promulgating the Law of the Service and System of Pensions and End of Service Gratuity for The Personnel of the Palace Office
  • Royal Decree 86/82 Adopting the System of Pensions and End of Service Gratuity in the Sultan’s Armed Forces
  • Royal Decree 87/84 Promulgating the Social Security Law
  • Royal Decree 49/98 Promulgating the System of Pensions and Gratuity for The Personnel of the Royal Guard of Oman
  • Royal Decree 2/2000 Promulgating the Law of Pensions and End of Service Gratuity for The Personnel of the Royal Oman Police and The Royal Oman Police Pension Fund Basic System
  • Royal Decree 32/2000 Promulgating the System of Social Insurance of Omanis Working Abroad and Their Equivalent
  • Royal Decree 3/2002 Promulgating the Law of Pensions and End of Service Gratuity for The Personnel of the Ministry of Defence and The Sultan’s Armed Forces
  • Royal Decree 29/2003 Promulgating the Law of Pensions and End of Service Gratuity for The Employees of the Internal Security Service
  • Royal Decree 44/2013 Promulgating the System of Social Insurance for Self-Employed Omanis and Their Equivalent
  • Royal Decree 82/2020 Promulgating the Employment Security System

The SPFL is deemed to be a significant improvement to the administration and management of pensions and benefits. The previous  laws comprised of a complex system of multiple pension funds and social security schemes, which made for a bureaucratic system that was hard to operate and manage. On the other hand, Article 24 of the SPFL establishes a simplified system comprising of a single unified fund that is to be run by the new ‘Social Protection Benefits Entitlement Committee’, to include representative from all relevant ministries, entities, and the fund itself.

Another fundamental difference between the two laws is the level of employer contribution to the fund. Under the repealed PASI Law, employer contributions varied depending on the pension fund or social security scheme. The SPFL requires employers 10% of their employees' salaries to the provident fund. Although this may potentially increase the cost of doing business in Oman, it would in theory better secure financing for the fund, ensuring an adequate and sustainable flow of money to finance pensions and benefits.

New Social Protection Benefits

The SPFL is arguably more comprehensive as it introduces various new social benefits, including the following: -

  • A benefit for the disabled comprising of 130 OMR per month (Article 31 of the SPFL);
  • a childhood benefit of 10 OMR per month for each child under the age of 18 (Article 37 of the SPFL);
  • a family income support benefit of 115 OMR multiplied by the square root of the number of family members (Article 40 of the SPFL);
  • an old age benefit of 115 OMR per month (Article 29 of the SPFL); and
  • a benefit of 80 OMR per month for orphans and widows (Article 33 of the SPFL).

Some concern may arise regarding the ability of the fund to finance the increase in benefits. Nevertheless, the rise in employer contributions, and the creation of a unified social protection system, should in theory lead to adequate funds and better management of finances. Moreover, the introduction of new benefits would potentially bolster economic growth, reduce inequality and poverty, while also increasing the quality of life by improving the overall health and wellbeing of individuals and families alike.

New Social Insurance

In addition to the system of social security benefits implemented by the SPFL, a system of social insurance and savings is also dealt with under Title 3 of the new law.

The types of insurance stipulated include:

  • Old age, disability and death insurance:
    • The employer would be bound to pay 11% of the monthly wage while the insured shall contribute 7.5% of his monthly wage to be calculated on a daily basis. This insurance branch does not apply to non-Omanis and includes all types of work contracts (Article 68 of the SPFL).
  • Work injuries and occupational diseases insurance:
    • The employer would be required to contribute 1% of the insured monthly wage calculated on a daily basis (Article 90 of the SPFL). Article 98 of the SPFL further states that if the insured is injured and is subsequently prevented from working due to the injury, the payment of his wages shall be suspended. Instead, the fund shall pay the insured a daily allowance until his recovery the stabilisation of his condition by permanent disability or death.
  • Job security insurance*:
    • Under Article 116 of the SPFL, both the employer and the employed are required to contribute 0.5% of the monthly wage calculated on a daily basis. The allowance shall be 60% of the average wage for the past two years provided that it is not less than 115 OMR, and must be paid to the insured for six continuous or intermittent months. This provision only applies to Omani citizens (Article 115 of the SPFL).
  • Sick leave and unusual leave insurance:
    • Article 124 of the SPFL states that the employer shall pay the full wage to the worker during the first seven days of sick leave. Following that, the sick leave and unusual leave insurance branch shall cover the worker’s pay, in the manner stipulated by the same Article. The insured will also be entitled to an unusual leave allowance constituting 100% of the daily wage in the scenarios listed under Article 125 of the SPFL.
  • Maternity leave insurance:
    • Article 128 of the SPFL requires the employer to contribute 1% of the monthly wage to the Maternity Leave Insurance Branch, which is to be calculated on a daily basis. Article 129 further states that the respective insured shall be entitled to a maternity leave allowance for 98 days, and 14 days may be included before the date of the delivery.

Foreign Employees in Oman

It is important to note that most insurance schemes (except the old age, disability and death insurance and the job security insurance) under the SPFL will apply to and are compulsory for both Omani and non-Omani workers, unlike the repealed PASI Law, which only applied to Omani citizens.

Such inclusion of expatriate workers in most social insurance schemes would play a role in attracting and retaining foreign talent, and potentially increase satisfaction and productivity in the workplace, while also creating a sense of security within expatriate workers.

The SPFL also created a Savings Systems that replaces the end-of-service gratuity for non-Omani employees. Such savings system is mandatory for non-Omani workers (Article 136 of the SPFL) and requires their contribution of 9% of the basic salary (Article 139(1) of the SPFL). The savings may be paid to the saver in a lump sum or in annual or monthly instalments at his request.


In summary, the SPFL is a welcomed piece of legislation that would substantially improve the way in which social insurance, pensions and benefits are administered and managed by creating a single united social protection fund. Furthermore, the introduction of new benefits would play a significant role in alleviating social and economic inequality, while improving the economy in general. However, it is important to note that given the complexity of this piece of legislation, and the costs to be imposed on employers, it is essential the businesses and companies are familiarised with the provisions and its implications, while also keeping up with any subsequent regulations issued by the ministries.

Next Steps

Before the relevant implementation dates, employers in Oman should review and update their employment contracts, human resources policies and employee manuals in light of the changes implemented by the SPFL. They will also need to note where employers have higher rights from the old law (e.g., in relation to sick leave or maternity leave) embedded in their employment contracts, such rights will continue to apply unless any amendment is agreed with the employee.

Please get in touch with any member of our team if you require any assistance in reviewing your existing employment agreements and HR policies or any advice on your obligations under the SPFL and/or the new Labour Law.