CalcKitIf you work in Oman, your employer owes you a lump-sum payment called end-of-service gratuity when your employment ends. It is not a bonus or a favour — it is a legal minimum under Article 61 of Oman's Labour Law, issued by Royal Decree 53/2023, which took effect on 31 July 2023. The amount follows one simple formula based on your last basic salary and your length of service, so you can work out what you should receive before you sign your final settlement.
The Oman gratuity formula
For workers who are not covered by Oman's Social Protection Law, the rule is straightforward: a gratuity of not less than one basic monthly salary for each year of service. Partial years count proportionally, and the calculation uses your last basic wage as its basis. In other words:
Gratuity = last basic monthly salary × years of service
Five years and six months counts as 5.5 years, not 5, so those extra six months add half a month's gratuity. Note that Article 61 sets a floor, not a ceiling: your contract or company policy may promise more than one month per year, but it cannot pay less. The same article is described as applying until the savings system under the Social Protection Law comes into force, so if your employer has moved you onto a savings scheme, check which system covers you.
Worked example
Take an employee with a last basic salary of OMR 500 who completes 5 years and 6 months of service under the current law. The calculation is simply 500 × 5.5 = OMR 2,750. No tiered rates, no resignation discount — one month per year, pro-rated for the part-year.
Now compare a shorter stint: an employee on OMR 400 basic who works 3 years receives 400 × 3 = OMR 1,200. Try your own numbers in our free Gratuity Calculator — select Oman and it runs the same formula instantly, including partial years.
What if you started before July 2023?
This is the part that catches people out. If your entitlement arose under the previous Labour Law, the older formula applies to the service covered by that law: 15 days' wages (half a month) for each year of the first three years, and one month's wages for each year after that. Service after the new law took effect is calculated at the new rate of one full month per year. That means an employee whose service spans both laws may need a split calculation rather than applying today's formula to the whole period.
Here is how a split calculation looks. An employee who started on 1 August 2021 on a basic salary of OMR 500 and leaves after five years has two years of service under the old law (August 2021 to July 2023) at half a month each: 250 × 2 = OMR 500. The remaining three years fall under the new law at one full month each: 500 × 3 = OMR 1,500. Total gratuity = OMR 2,000. Applying the new formula to all five years would give OMR 2,500 — a difference worth checking. If your service spans the changeover, confirm your split with Oman's Ministry of Labour before accepting a settlement, since the exact treatment depends on when your entitlement arose.
Who qualifies for gratuity?
Article 61 covers workers who are not beneficiaries of the Social Protection Law — in practice, this is mainly expatriate employees, since Omani nationals enrolled in the Social Protection Fund have their end-of-service benefits managed through that programme instead. The gratuity is calculated on fractions of a year proportionally, so even part of a year counts once you are covered. Domestic workers and some special categories follow separate rules, so if you are unsure which framework applies to you, check with the Ministry of Labour before signing anything.
Basic salary matters more than your total package
This is the detail that costs people thousands: housing, transport and food allowances, bonuses and overtime are excluded from the calculation. Only your last basic wage counts. If your contract shows a low basic salary with most pay labelled as allowances, your gratuity shrinks — even though your monthly take-home looks healthy. When negotiating an offer in Oman, push for a higher basic component: it directly raises your end-of-service payout, and it is the figure the whole gratuity calculation rests on.
Before you sign your settlement
Gratuity forms part of your final settlement when employment ends. Work out your own figure first — using the current formula, or the split calculation if your service began before July 2023 — and compare it line by line with what your employer offers. If the numbers do not match, raise the shortfall with your employer and, if needed, with the Ministry of Labour. Never sign a final settlement you have not checked: once signed, disputing the amount becomes much harder.