How gratuity works in Oman
Gratuity in Oman is paid on your last basic wage, not your total package. If your salary is OMR 900 made up of OMR 600 basic plus OMR 300 allowances, every figure below is calculated on the 600.
It applies to expatriate workers, who are not covered by the Social Protection Law. Omani nationals are covered by the Social Protection Fund and receive social insurance instead.
The 31 July 2023 change is what most calculators get wrong
Royal Decree 53/2023 replaced the 2003 labour law on 31 July 2023 and changed the rate. The old law paid 15 days of basic wage per year for the first three years, then 30 days per year. Article 61 of the new law pays one full month of basic wage for every year, from the first year.
If you were already employed on 31 July 2023, your service splits in two. The Ministry of Labour confirmed in October 2024 that the old formula applies to service before that date and the new one to service after it. A calculator that asks only for "years of service" cannot do this, which is why this one asks for dates.
| Period of service | Rate per year | Law |
|---|---|---|
| Before 31 July 2023, first 3 years | 15 days of basic wage | RD 35/2003 |
| Before 31 July 2023, year 4 onward | 30 days of basic wage | RD 35/2003 |
| From 31 July 2023 | One month of basic wage | RD 53/2023, Art. 61 |
Part years are paid in proportion, and the daily wage is the monthly basic divided by 30.
Resigning does not cut your gratuity
Worth saying plainly, because it differs from Saudi Arabia and Kuwait. Oman applies no resignation penalty. Whether you resign, your contract expires, or your employer ends it, the entitlement is the same. The exception is dismissal on the Article 41 misconduct grounds, which is often disputed.
The savings fund that has not arrived yet
The Social Protection Law replaces this lump sum with a funded savings account for expatriates — monthly employer contributions into an individual account at the Social Protection Fund. It keeps being deferred: due in July 2026, then pushed by Sultani Decree 60/2025 to 19 July 2027. Until then gratuity works as described above, and service accrued before the switch is still settled under gratuity rules.
Questions people ask
Do I need a full year before I get anything?
This is genuinely unsettled. The 2003 law required one year. Article 61 of the 2023 law entitles a worker to gratuity for fractions of a year in proportion to service, which several law firms read as removing the threshold, while other guidance still states a one-year minimum. If you are leaving before your first anniversary, ask the Ministry of Labour rather than accepting either answer.
Are allowances included?
Not for gratuity, which uses basic wage alone. Annual leave under Article 78 is different and is paid at the full wage.
What if my basic salary changed over the years?
The calculation uses your last basic wage across your whole service, so a raise near the end increases the entire gratuity, not just the recent part.
My employer's figure is lower. What now?
Ask for the calculation in writing, line by line. Most gaps come from ignoring the 31 July 2023 split, using an old basic salary, applying a resignation penalty that does not exist in Omani law, or counting service from the wrong date.
Is gratuity taxed?
Oman does not levy personal income tax on salaries, so nothing is deducted at payout. If you are tax-resident elsewhere, your home country's rules may still apply.
Where these rules come from
Labour Law, Royal Decree 53/2023 (in force 31 July 2023), Articles 41, 61 and 78 · Labour Law, Royal Decree 35/2003 (repealed) for earlier service · Ministry of Labour clarification on the split calculation, October 2024 · Social Protection Law, Royal Decree 52/2023, Articles 135–139 · Sultani Decree 60/2025.
Where sources genuinely disagree, this page says so rather than picking a number quietly.