Oman gratuity rules: the 2023 change and what's coming in 2027
How end-of-service works in Oman after the 2023 labour law — in plain English, with the article behind each rule. Want the number? The calculator splits it by period for you.
The new rate (Article 61)
The labour law introduced by Royal Decree 53/2023, effective 31 July 2023, raised end-of-service gratuity for non-Omani workers to one month of basic salary for every year of service, from the first year, with part-years paid pro-rata. This applies to all service earned from 1 August 2023.
The old formula (before 31 July 2023)
Service earned before the change keeps the previous rates: 15 days a year for the first three years, then one month a year after. If your employment started before mid-2023 and continues, both formulas apply and stack into a single payout when you leave.
The wage base and the cap
Gratuity is calculated on your basic salary only — housing, transport and other allowances don't count. And unlike the UAE (two years) or Kuwait (18 months), Oman has no cap: the figure simply grows with your service.
What's coming in 2027
Oman is moving to a funded model, but later than first planned. The Social Protection Fund savings system — under which the employer pays 9% of basic salary monthly in place of end-of-service gratuity — was deferred to 19 July 2027. Until then, the gratuity rules above are what apply, which is why today's calculation doesn't use the savings-fund mechanics.
Worked example
Basic OMR 1,000, employed 1 August 2021 to 1 August 2025:
| Period | Accrual | Amount |
|---|---|---|
| Aug 2021 – Jul 2023 (old) | 2 years × ½ month | OMR 1,000 |
| Aug 2023 – Aug 2025 (new) | 2 years × 1 month | OMR 2,000 |
| Total | OMR 3,000 |
When to get advice
This is a confident, law-based estimate. Individual circumstances vary, so for a binding figure confirm with the Ministry of Labour or a qualified advisor.
Based on Oman Labour Law (Royal Decree 53/2023), Article 61 — last verified 14 June 2026.
Frequently asked
What is the Oman gratuity rate now?
For service from 1 August 2023, a full month of basic salary for every year (Article 61). Service before 31 July 2023 uses the old formula — 15 days a year for the first three years, then a month a year.
Is Oman gratuity based on basic or gross pay?
Basic salary only — housing, transport and other allowances are excluded.
Is there a maximum?
No. Oman places no cap, so gratuity keeps growing with service — 20 years earns 20 months of basic salary.
Does resignation reduce it?
No. Gratuity is paid on leaving regardless of who ends the contract.
What happens in 2027?
From 19 July 2027, a contributory Social Protection Fund (employer 9% of basic salary monthly) will replace direct gratuity. It isn't in effect yet, so current calculations use today's rules.