Oman end-of-service gratuity under the new labour law
Work it out with your own numbersOman end-of-service calculator: Gratuity for expats under Oman labour law: one month's basic a year, old rates before July 2023 and your final settlement.Open the calculator →In Oman, a non-Omani worker in the private sector gets one month's basic wage for each year of service when the job ends, with part years paid in proportion. This comes from Article 61 of the Labour Law issued by Royal Decree 53/2023. Service before 31 July 2023 is paid at the old, lower rates for the first three years. From 19 July 2027, a savings fund is due to take over from the employer-paid gratuity.
This guide explains who gets it, which salary counts, how the old and new rules mix, and how unused leave and overtime are paid. To get your own figure, use the Oman end of service calculator.
Who gets end-of-service gratuity in Oman?
- Non-Omani (expat) workers in the private sector. They are covered by the Labour Law gratuity.
- Not Omani nationals. Omani workers are covered by the Social Protection Fund, which pays pensions and other benefits from monthly contributions. There is no Labour Law gratuity sum for them.
- No minimum service. There is no qualifying period. A worker who leaves after 8 months still gets 8/12 of a month's basic wage at the new rate.
- No cap. The law sets no upper limit on the number of years counted.
How is gratuity calculated in Oman?
The gratuity uses your last basic wage. Oman counts a month as 30 days (Article 1), so your daily basic wage is your monthly basic divided by 30.
daily basic wage = monthly basic ÷ 30
service before 31 July 2023 = 15 days × each of the first 3 years + 30 days × each year after that
service from 31 July 2023 = 30 days × each year
gratuity = old-law part + new-law part (part years in proportion)
| Service | Rate per year | Source |
|---|---|---|
| From 31 July 2023 | 30 days' basic wage (1 month) | Royal Decree 53/2023, Art. 61 |
| Before 31 July 2023, years 1 to 3 | 15 days' basic wage (half a month) | Old law, Royal Decree 35/2003 |
| Before 31 July 2023, year 4 onwards | 30 days' basic wage (1 month) | Old law, Royal Decree 35/2003 |
| From 19 July 2027 | No gratuity: 9% of basic paid into a fund | Royal Decree 60/2025 |
The old law already paid a full month a year after the third year. So the only real difference between old and new is the first three years: if they fell before 31 July 2023, they earn half a month each instead of a full month. Someone who joined on or after 31 July 2023 gets one month for every year.
Old law or new law for earlier years?
This is the part people argue about. Reports of Ministry of Labour guidance say the new rate applies to service from 31 July 2023, and earlier service is paid at the old rates. A Ministry circular in August 2026, as reported by the Oman Observer and Muscat Daily, ties the old rates to contracts signed under the old law. Some employers simply pay the new rate for all years. The calculator uses the split by date by default, and its Advanced mode lets you choose "new rate for all years" or "old rates for all years" to see the range.
Does housing allowance count for gratuity in Oman?
No. The gratuity is worked out on the basic wage only. Housing, transport and other allowances are left out. Note that the Labour Law (Article 1) defines the basic wage as the wage agreed in the contract plus any periodic allowance, and the gross wage as the basic wage plus all other allowances. If your contract lists a regular allowance as part of your basic pay, check how your employer treats it.
Allowances do matter elsewhere in your final settlement. Unused annual leave is paid on the gross wage when you leave (see below).
Worked examples
Example 1: joined before the new law
You worked from 1 March 2020 to 30 June 2026, which is 6 years and 4 months, on a last basic wage of OMR 600 a month. Your daily basic wage is 600 ÷ 30 = OMR 20.000.
- Service before 31 July 2023 is 3 years, 4 months and 30 days, or 3.415525 years.
- The first 3 years: 3 × 15 days × OMR 20 = OMR 900.000.
- The other 0.415525 years before the new law, at a full month: 0.415525 × 600 = OMR 249.315.
- The 2.917808 years from 31 July 2023: 2.917808 × 600 = OMR 1,750.685.
The gratuity is OMR 2,900.000, which is 4.83 months of basic wage. A quick check: 6.3333 years × 600 = OMR 3,800, minus half a month (OMR 300) for each of the first 3 years = OMR 2,900. If your employer paid the new rate for all years, it would be OMR 3,800.000.
Example 2: joined after the new law, short service
You joined on 1 September 2024 and left on 28 February 2026, which is 1 year and 6 months, on OMR 450 basic. All of it is new-law service: 1.5 × 450 = OMR 675.000. You get the same figure whether you resigned or the employer ended the contract, as far as the new law is read today.
Example 3: service that runs past 19 July 2027
You joined on 1 January 2024 and plan to leave on 31 December 2027, on OMR 800 basic. The gratuity only counts service up to 18 July 2027: 3 years, 6 months and 18 days, or 3.549315 years. That gives 3.549315 × 800 = OMR 2,839.452. The last 166 days (19 July to 31 December 2027) are covered by the savings fund, where the employer pays 9% of your basic wage each month.
Unpaid leave
The calculator takes days of unpaid leave off your service. In Example 1, 30 days of unpaid leave would bring the service down to about 6.25 years and the gratuity to about OMR 2,850.685. The calculator takes unpaid days off the old-law and new-law parts in proportion.
Do I get gratuity if I resign or am dismissed?
- Resigning: as far as we know, the new law does not reduce the gratuity when you resign. This is different from Saudi Arabia and Kuwait. It is not spelled out as clearly as we would like, so confirm it with your employer or the Ministry of Labour.
- Contract ended by the employer, or a fixed-term contract finished: full gratuity.
- Dismissed without notice for serious misconduct: you can lose the gratuity.
The expat savings system from 19 July 2027
The Social Protection Fund's savings system for expats is due to replace the employer-paid gratuity from 19 July 2027. It was first planned for July 2026 and was moved by Royal Decree 60/2025 (decree.om). From then, employers pay 9% of the monthly basic wage into the fund, with a promised return of at least 2% a year, and you collect the savings when you leave Oman. Gratuity earned up to 18 July 2027 is still owed under the Labour Law.
Leave salary and overtime in your final settlement
Your final pay is more than the gratuity. These are the usual parts:
| Item | Rule | Wage used |
|---|---|---|
| Annual leave | At least 30 days a year (Arts. 78 and 81) | Gross |
| Unused leave when you leave | Paid out in full | Gross |
| Unused leave cashed in while you stay | Only with your written agreement | Basic |
| Notice (no end date) | At least 30 days for monthly-paid workers (Art. 38) | Paid if not worked |
| Daytime overtime | Hourly basic wage + at least 25% (Art. 71) | Basic |
| Night overtime (9 pm–5 am) | Hourly basic wage + at least 50% (Art. 71) | Basic |
| Rest day or official holiday worked | Extra 100% of the daily basic wage, or a day off (Art. 71) | Basic |
Leave example: basic OMR 600 plus OMR 250 of allowances is a gross wage of OMR 850, so the daily leave rate is 850 ÷ 30 = OMR 28.333. If you leave with 20 unused days, they are worth 20 × 28.333 = OMR 566.667. Cashed in while you stay, the same 20 days on the basic wage would be 20 × 20 = OMR 400.000. The Oman leave salary calculator also covers the 6-month wait before your first leave, the 30-day carry-over and sick-leave pay.
Overtime example: on OMR 600 basic and an 8-hour day, the hourly basic wage is 600 ÷ 30 ÷ 8 = OMR 2.500. Ten hours of daytime overtime pays 10 × 2.5 × 1.25 = OMR 31.250; four night hours pay 4 × 2.5 × 1.5 = OMR 15.000. Dividing by 30 and then by the normal hours a day is common practice rather than a rule written in the law. Overtime you did not agree to (Art. 72) is paid more. Work it out with the Oman overtime calculator.
Your employer may also deduct loans or advances you still owe.
Common mistakes
- Using the gross salary. Gratuity is on the basic wage. Leave pay on exit is on the gross wage. Mixing them up is the most common error in both directions.
- Using an old salary. The gratuity uses your last basic wage, not an average.
- Paying half a month for the first 3 years when they were after 31 July 2023. The lower rate only applies to service under the old law.
- Forgetting part years. 6 years and 4 months is 6.333 years, not 6.
- Dividing by 26 or by 365 ÷ 12. Oman's law counts a month as 30 days.
- Counting service after 18 July 2027 as gratuity. From 19 July 2027 it is paid through the savings fund.
What if my employer disagrees?
- Ask for a written breakdown: your service dates, the basic wage used, the rate for each period and any deductions.
- Compare it with the calculator, using the same dates and rule. Most gaps come from the old-law first three years, unpaid leave or which wage was used.
- Raise it with HR in writing and keep copies of your contract, payslips and leave records.
- If it is not settled, file a labour complaint with the Ministry of Labour (mol.gov.om).
The figures in this guide were checked on 11 and 12 October 2026 against the English text of the Labour Law, Royal Decree 53/2023 (decree.om), Articles 1, 38, 61, 70 to 72, 78 and 81. The old-law rates are as the Ministry of Labour restated them, reported by the Oman Observer. Working elsewhere in the Gulf? Compare the UAE gratuity calculator and the Saudi end-of-service calculator.
Common questions
How much gratuity do I get in Oman?
Under the Labour Law issued by Royal Decree 53/2023, a non-Omani worker gets one month's basic wage (30 days) for each year of service from 31 July 2023, with part years paid in proportion. Service before that date is paid at the old rates: 15 days' basic wage a year for the first 3 years and a month a year after. 6 years and 4 months on OMR 600 from 1 March 2020 gives OMR 2,900.000.
Is Oman gratuity paid on basic salary or total salary?
On the last basic wage only. Housing, transport and other allowances are left out. Unused leave, on the other hand, is paid on the gross wage (basic plus allowances) when you leave.
Do I lose my gratuity if I resign in Oman?
As far as we know, no. The new Labour Law does not cut the gratuity when a non-Omani worker resigns, and there is no minimum length of service. A worker dismissed without notice for serious misconduct can lose it. Check your own case with the Ministry of Labour.
Is there a minimum service period for gratuity in Oman?
No. There is no minimum length of service and no cap. Even a few months of service earns a share of a month’s basic wage, in proportion to the time worked.
Do Omani nationals get gratuity from the employer?
No. Omani workers are covered by the Social Protection Fund, which pays pensions and other benefits from contributions, not by the Labour Law gratuity.
What happens to gratuity after July 2027?
The Social Protection Fund's savings system for expats is due to replace the employer-paid gratuity from 19 July 2027 (moved from July 2026 by Royal Decree 60/2025). Employers will then pay 9% of the monthly basic wage into the fund, with a promised return of at least 2% a year. Service from that day is paid through the fund, not as gratuity.
This guide explains the rules in plain English for planning. It is not legal, financial or flight-operations advice; check your contract, the official source linked above, your employer or your operator.