Not legal advice
Content summarises labour law as published by each GCC ministry, current as of May 2026. Not a substitute for legal advice. Employment law is jurisdiction-specific and subject to change. For contracts, disputes, visa issues, or any decision with legal consequences, consult a qualified labour lawyer licensed in your jurisdiction.
Not legal advice
This guide summarizes Oman employment law for informational use only. It is not a substitute for advice from a qualified labour lawyer. Employment law is complex and jurisdiction-specific. For contracts, disputes, visas, or decisions with legal consequences, consult a licensed labour lawyer in your jurisdiction.
Quick summary
Under Royal Decree 53/2023, end-of-service for expat employees is calculated in two periods: pre-26-July-2023 tenure uses the old tiered rates (15 days/year for years 1-3, 30 days/year for years 4+); post-26-July-2023 tenure uses a flat 30 days per year. No statutory cap. Vests after 12 months. The 2023 reform also signalled an eventual phase-out of expat gratuity in favour of a savings-system contribution model.
The two-period split
On 26 July 2023, Royal Decree 53/2023 (the Social Protection Law) restructured Oman's end-of-service mechanic. For employees whose tenure spans the transition date, gratuity is now calculated in two periods:
- Pre-26-July-2023 tenure: the historical tiered regime under the old Article 39 of Royal Decree 35/2003. Practitioners typically apply 15 days of basic wage per year for the earliest years, rising to 30 days per year for longer service, confirm the exact tier breakpoints with a lawyer if your tenure crosses the threshold.
- Post-26-July-2023 tenure: A flat 30 days of basic wage per year, regardless of how many years.
Each period is calculated on its own days and then summed. Partial years pro-rata. No statutory cap on the total.
The resignation reduction (gone post-2023)
The pre-2023 Omani regime included a sliding-scale reduction for voluntary resignation similar to the UAE's old rules. Under Royal Decree 53/2023 that reduction is gone, voluntary resignation now pays the full gratuity once the one-year vesting threshold has been met. This is a meaningful employee- favourable change.
Vesting and minimum service
Twelve months of continuous service are required for gratuity to vest. Below that, no entitlement.
The wage base
Calculation is on basic wage only. Allowances, housing, transport, food, are excluded. This is the standard GCC treatment (matching UAE and Qatar) and contrasts with Bahrain's more employee-favourable wage-base definition.
The savings-system transition
Article 136 of the Social Protection Law signalled an eventual phase-out of expat gratuity in favour of a savings-system contribution model, analogous to the UAE's DEWS pilot. The original decree referenced a July 2026 implementation date. The specific phase-out mechanics, employee opt-in/out rules, and contribution rates continue to be refined by the Ministry of Social Development and the Ministry of Labour. Verify the current state with an Omani lawyer before relying on either the statutory gratuity or the savings system for a specific case.
Payment timing
Gratuity is paid within seven days of the end of the employment relationship. Late payment is enforceable through the Ministry of Labour and the Labour Court. OMR uses three decimal places, so check that final calculations and any rounding errors are within an acceptable tolerance.
Worked example
Faisal worked for an Omani firm from 1 January 2020 to 31 December 2025, six years total. His final basic wage was OMR 1,500/month. Pre-2023 period (1 Jan 2020 to 25 July 2023, ~3.5 years): years 1-3 = 3 × 15 days = 45 days; years 3-3.5 = 0.5 × 30 days = 15 days. Subtotal: 60 days × (OMR 1,500 / 30) = OMR 3,000. Post-2023 period (26 July 2023 to 31 Dec 2025, ~2.5 years): 2.5 × 30 days = 75 days × OMR 50/day = OMR 3,750. Total gratuity: OMR 6,750.
Frequently asked questions
How does the 2023 split-period work for me?
Your tenure is divided at 26 July 2023. Years served before that date use the old 15/30 tiered formula; years served after use the new flat 30 days/year. The Tenure gratuity calculator handles this automatically when you enter your hire and end dates.
Do I lose gratuity if I resign?
No, the old sliding-scale reduction is gone under Royal Decree 53/2023. Voluntary resignation now pays the full gratuity, provided you've completed at least 12 months of service.
What's the savings-system phase-out?
Royal Decree 53/2023 signalled an eventual shift from statutory gratuity to a contribution-based savings system for expat workers. The exact implementation date and mechanics remain under refinement by the Ministry of Social Development and the Ministry of Labour. Verify the current state with a lawyer for any specific case.
Is there a cap on gratuity?
No statutory cap. Long-tenure executives can accrue substantial entitlements. The cap question becomes moot if/when the savings system replaces the statutory gratuity entirely.
When to consult a labour lawyer
Consult an Omani employment lawyer if your tenure spans 26 July 2023 (the split-period calculation can be complex), your employer is computing gratuity under one regime when it should be split, you're being offered a savings-system contract in place of statutory gratuity, or you're approaching the rolling implementation date of the expat phase-out.