When employment ends in Oman, an eligible worker may be entitled to an end-of-service gratuity based on their basic salary and length of service.
Under Article 61 of the current Oman Labour Law, an employer must pay an eligible worker at least one basic wage for every year of service. Fractions of a year are calculated proportionally, and the calculation uses the worker’s last basic wage.
The basic formula is:
End-of-Service Gratuity = Last Basic Monthly Wage × Years of Service
This guide explains who may qualify, how the calculation works and how partial years affect the final amount.
Oman Gratuity & Final Settlement Calculator
What Are End-of-Service Benefits in Oman?
End-of-service benefits are amounts that may become payable when an employment relationship ends.
For workers covered by Article 61, the gratuity component is based primarily on:
Last basic wage + Length of service
However, gratuity is not necessarily the same as the employee’s complete final settlement.
A final settlement can potentially contain other amounts such as outstanding wages or other contractual/statutory entitlements.
So:
Gratuity = one component
while:
Final settlement = potentially several components
Related guide: Oman Gratuity Calculation Under the Labour Law
Current Oman Gratuity Formula
Article 61 provides that workers who are not beneficiaries of the Social Protection Law must receive a gratuity of at least:
One basic wage for each year of service
with fractions of a year calculated proportionally.
A simplified calculation is therefore:
Gratuity = Last Basic Monthly Salary × Completed Years
For a partial year:
Partial-Year Gratuity = Last Basic Salary × Fraction of Year
Then combine the two.
Example: 5 Years of Service
Suppose an employee has:
Last basic salary: OMR 500
Service: 5 years
Calculation:
OMR 500 × 5 = OMR 2,500
Estimated statutory minimum gratuity:
OMR 2,500
This example assumes the worker falls under Article 61 and there are no circumstances affecting entitlement.
Example: 10 Years of Service
Suppose:
Basic salary = OMR 800
Service = 10 years
Calculation:
800 × 10 = OMR 8,000
Estimated gratuity:
OMR 8,000
The important point is that the current Article 61 calculation does not use the older online formula you may still find on outdated websites that divides service into different gratuity rates for the first years and later years.
The current law states at least one basic wage for each year of service.
How Are Partial Years Calculated?
Oman Labour Law specifically states that a worker is entitled to gratuity for fractions of a year in proportion to the period served.
Suppose:
Basic salary = OMR 600
Service = 4 years and 6 months
Four full years:
600 × 4 = OMR 2,400
Six months equals:
6 ÷ 12 = 0.5 year
Partial-year gratuity:
600 × 0.5 = OMR 300
Total:
OMR 2,400 + OMR 300 = OMR 2,700
Estimated gratuity:
OMR 2,700
Example: 7 Years and 3 Months
Suppose:
Last basic salary = OMR 750
Service = 7 years and 3 months
Convert three months into a year:
3 ÷ 12 = 0.25
Total service:
7.25 years
Calculation:
750 × 7.25 = OMR 5,437.50
Estimated gratuity:
OMR 5,437.50
This is why a gratuity calculator should accept years and months instead of forcing users to enter completed years only.
Is Gratuity Calculated on Basic or Gross Salary?
For Article 61 gratuity, the law specifically uses the worker’s last basic wage.
Oman’s Labour Law distinguishes between:
Basic wage — the agreed monetary wage plus periodic allowance.
and
Gross wage — basic wage plus allowances and other benefits payable in return for work.
Therefore, if an employee receives:
Basic salary: OMR 600
Housing allowance: OMR 200
Transport allowance: OMR 100
Total/gross wage: OMR 900
the Article 61 gratuity calculation is based on the applicable basic wage, not automatically the OMR 900 gross amount.
For five years:
600 × 5 = OMR 3,000
rather than:
900 × 5 = OMR 4,500
This distinction can materially affect the calculation.
Which Basic Salary Should Be Used?
Article 61 states that the last basic wage is used as the basis for calculating gratuity.
Suppose an employee’s salary changed during employment:
Year 1 basic salary: OMR 400
Year 3 basic salary: OMR 500
Final basic salary: OMR 650
For a five-year Article 61 calculation, the relevant statutory basis is the:
Last basic salary = OMR 650
Simplified calculation:
650 × 5 = OMR 3,250
You would not normally calculate each year separately using that year’s historical basic salary under this formula.
Who Is Covered by Article 61?
Article 61 applies to workers who are not beneficiaries of the Social Protection Law, and its gratuity rule continues until the savings system provided under the Social Protection Law becomes operational for the relevant workers.
This matters particularly because Oman is transitioning toward a new Provident/Savings Scheme for non-Omani workers.
The Social Protection Law states that this savings system will replace employer-paid end-of-service gratuity for non-Omani workers once applicable.
What Is Changing for Expat Workers?
Oman’s Social Protection Fund describes the Provident Scheme as a defined-contribution system designed to cover end-of-service benefits for non-Omani workers.
Employers will make contributions, and eligible workers will ultimately receive accumulated contributions/deposits and investment returns according to the scheme’s rules.
Current official implementation material indicates that the mandatory provident scheme for non-Omanis is expected to take effect in July 2027, following amendments to the rollout schedule.
That means the calculation system is entering an important transition period.
What Happens to Service Before the New Savings Scheme?
The Social Protection Law protects the pre-scheme service period.
Article 138 provides that the employer remains responsible for the end-of-service gratuity relating to service before the savings-system contribution provisions begin, or may settle those rights into the savings system or with the worker according to the applicable rules.
Similarly, Article 61 of the Labour Law allows an employer to settle the worker’s pre-scheme service rights when the savings system begins, using the basic wage applicable at the date of settlement.
This means a future calculator may need to separate:
Service before Provident Scheme
from:
Service after Provident Scheme begins
rather than applying one gratuity formula to the employee’s entire career.
Can an Employee Lose End-of-Service Gratuity?
There are specific circumstances where dismissal can occur without end-of-service gratuity.
Article 40 of the Oman Labour Law lists cases in which an employer may dismiss an employee without prior notice and without end-of-service gratuity, including certain serious misconduct situations.
Examples include circumstances involving fraud in obtaining employment, serious material loss caused by employee fault under the specified conditions, serious safety-rule violations after warning, and certain unauthorized absences.
Therefore, a calculator can estimate the amount but cannot determine legal eligibility in every termination dispute.
When Should Final Employment Dues Be Paid?
Oman Labour Law requires the employer to pay wages and other amounts due to the worker immediately when the employment relationship ends.
If the worker leaves employment voluntarily, the employer must settle the worker’s wage and other entitlements within seven days from the date of leaving.
This rule concerns the settlement of amounts due at termination and is separate from calculating the gratuity amount itself.
Example of a Final Settlement
Suppose an eligible employee has:
Basic salary: OMR 700
Service: 6 years
Gratuity:
700 × 6 = OMR 4,200
Now suppose, purely for illustration, the employee also has:
Outstanding salary: OMR 900
Other confirmed entitlement: OMR 250
A simplified settlement estimate could be:
| Component | Amount |
|---|---|
| End-of-service gratuity | OMR 4,200 |
| Outstanding salary | OMR 900 |
| Other entitlement | OMR 250 |
| Illustrative total | OMR 5,350 |
This does not mean every departing employee automatically receives these additional items. They should only be included when actually due.
Oman Gratuity & Final Settlement Calculator
Common Gratuity Calculation Mistakes
Using Gross Salary
Article 61 uses the last basic wage, not automatically total salary including allowances.
Ignoring Partial Years
Fractions of a year qualify proportionally under Article 61.
Using an Old Oman Formula
Older articles and calculators may still show formulas based on previous labour-law provisions. For current calculations, check the present Labour Law.
Treating Gratuity as the Entire Final Settlement
Outstanding salary and other valid entitlements should be considered separately.
Ignoring the Provident Scheme Transition
Oman’s Social Protection framework will change how end-of-service benefits for non-Omani workers are funded and calculated going forward.
Frequently Asked Questions
What is the Oman gratuity formula?
For workers currently covered by Article 61:
Last Basic Wage × Years of Service
with partial years calculated proportionally.
Is gratuity based on basic or total salary?
Article 61 specifies the worker’s last basic wage.
Do partial years count?
Yes. Fractions of a year are calculated proportionally.
Does the formula change after five years?
The current Article 61 provides at least one basic wage for each year of service; it does not state a separate post-five-year rate.
Is gratuity the same as final settlement?
No. Gratuity may be one part of a final settlement, which can also include other amounts that are legally or contractually due.
Is Oman replacing gratuity for expat workers?
The Social Protection Law establishes a mandatory savings/provident system for non-Omani workers that will replace employer-paid end-of-service gratuity for the period covered by the new system. Current official implementation material points to July 2027 for the mandatory scheme.
Final Thoughts
For an eligible worker under the current Article 61 rule, the core Oman end-of-service calculation is straightforward:
Last Basic Wage × Service Period = Estimated Gratuity
For example:
OMR 600 × 8 years = OMR 4,800
Partial years should also be included proportionally, and the last basic wage rather than total salary is the statutory calculation basis.
The biggest upcoming change is Oman’s Provident Scheme for non-Omani workers. Because that system will replace the traditional employer-paid gratuity for the period it covers, calculators should distinguish between pre-scheme service and service falling under the new savings system once it takes effect.
Use our Oman Gratuity & Final Settlement Calculator to estimate gratuity based on your basic salary and exact service period, while keeping other final-settlement components separate.
