End-of-service gratuity in Oman, who is owed it and how it is worked out

This is a general explanation, not legal advice. For your own case, ask the Ministry of Labour before you sign any final settlement.

The law that governs the gratuity

The Labour Law was issued by Royal Decree 53/2023 on 25 July 2023 and published in Official Gazette issue 1504 on 30 July 2023. It took effect the day after publication and repealed the previous Labour Law, issued by Royal Decree 35/2003. The gratuity is governed by its Article 61.

Who is owed it

Article 61 obliges the employer to pay the gratuity when the employment of "workers not benefiting from the provisions of the Social Protection Law" ends. The Social Protection Law, issued by Royal Decree 52/2023, provides a savings scheme that replaces the end-of-service gratuity for non-Omanis, so in practice the gratuity mostly concerns non-Omani workers in the private sector. Check your own position with the Ministry of Labour.

The gratuity can be lost. Article 40 lets the employer dismiss without notice and without the gratuity in listed cases, among them forgery to obtain the job, unexcused absence for more than seven consecutive days or ten separate days in a year, and disclosing the establishment's secrets. Conversely, Article 41 keeps all of a worker's rights, gratuity included, when they leave for reasons that lie with the employer, among them not being paid for more than two consecutive months.

How it is calculated

Article 61 sets three rules for the calculation:

1. The gratuity is no less than one basic wage for each year of service.
2. Part of a year earns a share of the gratuity in proportion to the time served.
3. The worker's last basic wage is the basis of the calculation.

Article 1 defines the "basic wage" as the cash amount agreed in the employment contract plus the periodic increment. It is distinct from the "total wage", which adds all increments and allowances. Housing and transport allowances therefore do not enter the gratuity.

Periods of special unpaid leave requested by the worker, and unpaid childcare leave, do not count towards the gratuity, under Articles 80 and 83.

A worked example

A hypothetical example: a worker's last basic wage is OMR 450, and their total wage with housing and transport allowances is OMR 620. They started on 1 February 2021 and their service ended on 31 October 2026: five years and nine months, with no unpaid leave.

Article 61 sets a floor, not a ceiling: a contract may promise more.

Service that began before the law

The worker in the example started in 2021, more than two years before the current law took effect. Article 61 is explicit on this: service that began before the law came into force counts as part of the service period used to determine the gratuity.

The old law (Article 39) paid fifteen days' wage for each of the first three years, a month's wage for each later year, and nothing for service under a year. The current Article 61 states no different rate for years before it took effect and no minimum length of service. Had the whole of the example worker's service been calculated the old way, the gratuity would have been OMR 1,912.500, which is OMR 675 less. If your settlement applies the old method to all or part of your pre-2023 years, ask the Ministry of Labour before you sign.

The savings scheme to come

Article 61 applies until the savings scheme in the Social Protection Law begins. That law funds the scheme with 9% of a non-Omani worker's basic wage each month, and requires the employer to pay the gratuity for service before contributions start, either at the end of service or by settling it into the scheme or with the worker. Under Article 61, such a settlement is calculated on the basic wage at the settlement date.

The date contributions begin is set by the board of the Social Protection Fund, after Royal Decree 60/2025 extended the deadline to four years from the issue of the Social Protection Law. As of the verification date we found no published decision fixing that date, so follow what the Ministry of Labour and the Social Protection Fund announce.

What to do now

• Keep your contract and payslips that show the basic wage apart from allowances.
• Note your start date and any unpaid leave.
• When service ends, ask for the end-of-service certificate the employer must give you at no cost (Article 62).
• Work out the minimum yourself, or with the Oman end-of-service calculator, and compare it with the settlement before you sign.