How to calculate gratuity in Oman
Last reviewed: 14 June 2026Checked against the official rules.How we verify
Oman's Labour Law changed on 31 July 2023, so a correct gratuity calculation splits your service at that date. Service before it uses the old rate, service after it uses the new one. Here is the method, with a worked example.
In short
Oman splits your service at 31 July 2023: time before earns half a month per year (a full month after the third year), and time after earns a full basic month per year, both on your last basic wage. Resigning does not reduce it.
Key facts
- Before 31 Jul 2023
- Half a month/year (1 month after year 3)
- From 31 Jul 2023
- One full basic month/year
- Wage basis
- Last basic wage
- Eligibility
- 1 year of continuous service
- On resignation
- No reduction
01Step 1 — Use your last basic wage
Gratuity is based on your final basic monthly wage. Allowances are excluded unless your contract defines them as basic.
02Step 2 — Split your service at 31 July 2023
For service before 31 July 2023, the old law applies: half a month per year for the first three years, then a full month per year. For service from 31 July 2023 onward, you earn one full basic month per year.
03Step 3 — Add the two parts
Calculate each period on your last basic wage and add them together. For typical expats, the pre-2023 stretch usually falls within the first three years, so it accrues at the half-month rate.
04Worked example — 2 years before + 2 years after, OMR 500
Old-law part: 0.5 × 500 × 2 = OMR 500. New-law part: 1 × 500 × 2 = OMR 1,000. Total = OMR 1,500.
| Service split | Gratuity |
|---|---|
| 1 year before, 1 year after | OMR 750 |
| 2 years before, 2 years after | OMR 1,500 |
| 3 years before, 3 years after | OMR 2,250 |
| All after the new law (4 years) | OMR 2,000 |
Enter your salary and dates for your exact figure, split correctly.
Frequently asked questions
Why is service split at a date?
Royal Decree 53/2023 took effect on 31 July 2023 and raised the rate to one full month per year. Earlier service keeps the old half-month rate, so applying the new rate to your whole tenure overstates the gratuity.
Is gratuity being replaced by a savings fund?
Eventually. A savings scheme with a 9% employer contribution for expatriates has been deferred to 19 July 2027. Until it starts, the lump-sum gratuity applies in full.
Does resignation reduce it?
No. Under the new law, resignation and termination earn the same gratuity; it is lost only on disciplinary dismissal.
Guides for other countries
Based on Oman Royal Decree 53/2023, Article 61