End-of-Service Benefits in Oman: Gratuity & Savings System

As of October 2026, expatriate employees in Oman's private sector are still paid an end-of-service gratuity by their employer under Article 61 of the Labour Law: at least one month's basic wage for each year of service since 31 July 2023, with earlier service calculated under the old rules. This will change when the Social Protection Fund's savings system for non-Omani workers starts, no later than 19 July 2027, after which employers will pay 9% of basic wage each month into a savings account instead. Omani employees do not receive this gratuity; they are covered by the Social Protection Fund's pension and insurance system.

Two laws, two groups of workers

End-of-service rules in Oman now depend on two laws issued in 2023:

• The Labour Law (Royal Decree 53/2023), in force since 31 July 2023. Article 61 obliges employers to pay a gratuity to workers who are not covered by the Social Protection Law.
• The Social Protection Law (Royal Decree 52/2023), which created the Social Protection Fund. It covers Omani workers through pensions and insurance branches, and introduces a separate savings system (a provident-fund style scheme) for non-Omani workers that will replace the gratuity.

In practice, the gratuity under Article 61 applies to expatriate employees until the savings system begins.

How gratuity is calculated for expatriates now

Under the current Labour Law, the gratuity is:

• At least one basic monthly wage for each year of service, with part-years paid pro rata.
• Calculated on your last basic wage. Allowances such as housing and transport are not included.
• Payable whether you resign or are terminated, except in the specific cases where the law allows dismissal without gratuity (see below).

Service before 31 July 2023 still counts. According to Ministry of Labour clarifications reported in the local press, each period is calculated under the law in force at the time: the old Labour Law gave 15 days' wage for each of the first three years and one month's wage for each year after that.

Period of service	Rate
Before 31 July 2023 (old law), first three years	15 days' basic wage per year
Before 31 July 2023 (old law), after three years	One month's basic wage per year
From 31 July 2023 (Royal Decree 53/2023)	At least one month's basic wage per year, pro rata for part-years

Worked example (based on the ministry's published illustration): an expatriate joined on 1 August 2021 and leaves on 31 July 2026 with a basic wage of RO 500. The two years before the new law earn half a month each (RO 250 x 2 = RO 500), and the three years after it earn a full month each (RO 500 x 3 = RO 1,500), giving a total of RO 2,000. Your own figure depends on your dates, contract and any company scheme, so always check it with HR or the Ministry.

The new savings system for non-Omani workers

The Social Protection Law sets up a compulsory savings system for non-Omani workers which, once it starts, replaces the end-of-service gratuity. Its main features, according to the law and its executive regulation as reported by the Oman Observer:

• Who pays: the employer contributes 9% of the worker's monthly basic wage to a personal savings account with the Social Protection Fund. The worker does not pay this contribution.
• Returns: savings earn investment returns, with a minimum guaranteed return of 2% a year set in the regulation.
• When you can withdraw: when your employment ends, unless you start a new job in Oman within a set period (three months under the regulation); when you leave Oman; on permanent disability; or, on death, by your legal heirs.
• How you are paid: as a lump sum or in annual or monthly instalments, at your choice.

When does it start?

The start was originally due by July 2026. Royal Decree 60/2025 postponed it, so the savings system must start no later than 19 July 2027; the Fund's board can choose an earlier date. At the time of writing (October 2026) no earlier start date had been announced, so the Article 61 gratuity still applies. Watch the Social Protection Fund and Ministry of Labour for official announcements.

What happens to gratuity already earned?

Gratuity earned for service before the savings system starts is not lost. Article 61 allows the employer either to pay it when your service ends or to settle it earlier, by paying it into the savings system or directly to you; if it is settled early, it must be calculated on your basic wage at the settlement date. Contributions of 9% will then cover service after the start date. Keep copies of your contract, salary slips and joining date, as these determine what you are owed.

Omani employees: pension and insurance instead of gratuity

Omani workers in the private sector are compulsorily insured with the Social Protection Fund. Instead of a lump-sum gratuity from the employer, they build entitlement to an old-age pension and are protected by other insurance branches, including job-security (unemployment) insurance, funded by contributions from employers, employees and the government. Benefits depend on contribution history, so Omani employees should check their record and eligibility directly with the Social Protection Fund.

When gratuity can be withheld or reduced

• Dismissal for serious misconduct: Article 40 lists nine cases where an employer can dismiss without notice and without gratuity, including forgery or false identity, unexcused absence of more than 7 consecutive days or 10 intermittent days in a year (after a written warning), disclosing secrets, and assault at work.
• Unpaid leave: special unpaid leave and unpaid childcare leave count as service but are excluded when calculating gratuity.
• Deductions: amounts owed to the government, and debts proven to be owed to the employer, can be deducted from end-of-service dues.
• Company schemes: if your employer runs an approved savings or provident scheme that replaces the gratuity, you receive the scheme amount if it is equal to or higher than the gratuity; otherwise the gratuity is due.

Resigning does not in itself reduce your gratuity under the current law. If you leave without notice for reasons the law accepts, such as unpaid wages for more than two consecutive months, you keep your full rights.

Getting paid and making a claim

• Wages and all dues, including gratuity, must be paid immediately when employment ends, or within 7 days if the worker left the job unilaterally.
• You can ask your employer for a free end-of-service certificate showing your dates, job and wage.
• If you are not paid, file a complaint with the Ministry of Labour, which tries to settle the dispute before it can go to court. Act quickly: claims under the Labour Law generally expire one year after they become due, and dismissed workers should complain within 30 days.
• Labour lawsuits filed by workers are exempt from court fees.

Key takeaways

• Until the savings system starts, expatriates receive gratuity of at least one month's basic wage per year of service since 31 July 2023; earlier service follows the old rates.
• The savings system (employer pays 9% of basic wage monthly) must start no later than 19 July 2027 and will replace gratuity for non-Omanis.
• Gratuity earned before the switch remains payable.
• Omanis are covered by Social Protection Fund pensions and insurance, not Article 61 gratuity.
• Gratuity is based on basic wage, so check the basic/allowance split before accepting an offer.
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