The formula
Gratuity = basic monthly wage × years of service, pro rata for part years, under the Labour Law (RD 53/2023). It is based on the last basic wage, excluding housing, transport and other allowances. It is due immediately at the end of service, or within 7 days if the worker resigned, and can be withheld only on dismissal without notice for one of the Article 40 reasons.
Worked example
3.5 years’ service, OMR 700 basic
- 700 × 3.5 = OMR 2,450
Coming change: the 9% savings scheme
When the SPF savings system starts (by 19 July 2027 at the latest), employers will pay 9% of basic wage into the fund each month instead of accruing gratuity. Gratuity earned before the switch is either paid at exit or settled into the scheme on the basic wage at that time. See the Oman payroll guide.
Frequently asked questions
How is gratuity calculated in Oman in 2026?
At least one month's basic wage for each year of service, pro rata, under the Labour Law issued by Royal Decree 53/2023. There is no one-year minimum.
What was the old Oman gratuity rule?
Under the previous law (RD 35/2003): 15 days' basic wage per year for the first three years and one month per year after that. The new law applies one month per year throughout.
Is gratuity being replaced in Oman?
Yes. Under the Social Protection Law, a savings system funded by a 9% employer contribution on basic wage will replace gratuity for future service, starting no later than 19 July 2027. Gratuity for service before the switch is still owed.