If you work in Oman and your employment is ending, your end-of-service gratuity can be one of the most important parts of the final settlement.
Under the current Oman Labour Law, an eligible worker who is not benefiting from the Social Protection Law must receive an end-of-service gratuity of at least one basic wage for each year of service.
The calculation uses the worker’s last basic wage, with a proportional amount for qualifying fractions of a year. This guide explains the Oman labour law gratuity calculation, practical examples and the transition toward the Social Protection Fund’s savings system.
Oman Labour Law Gratuity Calculation Formula
For an employee covered by Article 61, the basic formula is:
Gratuity = Last basic monthly wage × Eligible years of service
Article 61 provides at least one basic wage for every year of service and a proportional amount for a fraction of a year.
Simple Example
If the final basic wage is OMR 500 per month and eligible service is five years:
OMR 500 × 5 = OMR 2,500
The estimated gratuity is OMR 2,500.
Is Gratuity Based on Basic or Gross Salary?
Article 61 uses the worker’s last basic wage, not automatically the full monthly compensation package.
| Component | Amount |
|---|---|
| Basic wage | OMR 600 |
| Housing allowance | OMR 200 |
| Transport allowance | OMR 100 |
| Total package | OMR 900 |
For the Article 61 calculation, the starting figure is OMR 600—not automatically the OMR 900 package.
Example: Three Years of Service
For a last basic wage of OMR 450 and three eligible years:
OMR 450 × 3 = OMR 1,350
This assumes Article 61 applies and no contract provides a greater benefit.
Example: Eight Years of Service
For a last basic wage of OMR 700 and eight years:
OMR 700 × 8 = OMR 5,600
The formula is simpler than some older Oman gratuity calculations that remain online.
Older Oman Gratuity Formulas May Be Outdated
Older material can describe different gratuity rates for different periods of service. Do not automatically apply those formulas under the current Labour Law.
Article 61 states that gratuity must be at least one basic wage for every year of service for workers covered by the provision. Any calculator should clearly identify the legal framework and effective rule set it uses.
How Is Part of a Year Calculated?
Article 61 provides for fractions of a year in proportion to the service period. For a basic wage of OMR 600 and service of four years and six months:
4.5 × OMR 600 = OMR 2,700
A calculator can convert years and months into the appropriate proportional service period.
Example: Seven Years and Three Months
Three months equals 3 ÷ 12, or 0.25 of a year. For a basic wage of OMR 800:
OMR 800 × 7.25 = OMR 5,800
What If Your Salary Increased?
The Article 61 calculation uses the last basic wage. If an employee began at OMR 350 but the final basic wage became OMR 600, the relevant wage for this calculation is OMR 600.
Does Resignation Remove Gratuity?
Do not assume that resignation automatically removes all end-of-service gratuity. Entitlement should be determined under the applicable Labour Law, Social Protection framework, employment circumstances and any contractual terms providing a greater benefit.
The reason for leaving can affect other parts of the settlement, so gratuity should not be confused with every termination-related entitlement.
Gratuity vs Final Settlement
Gratuity is not necessarily the whole final settlement. Depending on the circumstances, the settlement may include:
- End-of-service gratuity.
- Outstanding salary.
- Eligible unused-leave amounts.
- Notice compensation where applicable.
- Other contractual or legally due amounts.
- Lawful deductions.
Certain government debts or proven amounts owed to the employer may be deducted as permitted by law.
Calculate Your Oman Final Settlement
Estimate gratuity, service duration, outstanding salary, unused leave and other settlement components using a date-aware calculation.
Open the Oman Gratuity Calculator →
The result is an estimate, not a binding legal or payroll determination.
What Is Changing Under Oman’s Social Protection System?
Oman’s Social Protection Law establishes a savings or provident system for non-Omani workers. Once the relevant provisions apply, that system replaces employer-paid end-of-service gratuity for covered non-Omanis.
Employers contribute to a savings arrangement, and the employee can ultimately become entitled to the contributions deposited into the personal account together with applicable investment returns.
When Is the Provident Scheme Expected?
The supplied 2026 Social Protection Fund and ILO summary states that, following amendments through Royal Decree 60/2025, the mandatory savings or provident scheme for non-Omanis is scheduled to take effect in July 2027.
Until the savings system becomes applicable, Article 61 expressly provides for the existing gratuity rule. A useful Oman gratuity calculator must therefore be date-aware rather than permanently hard-code one formula.
What Happens to Earlier Service?
The Social Protection Law addresses the transition. The employer remains responsible for gratuity relating to service before the savings-contribution provisions begin. That earlier period can be settled according to the applicable rules.
This is especially important for an employee whose service spans both systems.
Can an Employment Contract Provide More?
Article 61 establishes a minimum entitlement: not less than one basic wage for each year. The statutory amount should not automatically be treated as the maximum. Employment contracts or other applicable arrangements may provide a greater benefit.
Extended Calculation Example
For a final basic salary of OMR 650 and service of six years and eight months:
6 + 8 ÷ 12 = approximately 6.6667 years
OMR 650 × 6.6667 ≈ OMR 4,333.36
The tool should display the rule version, calculation date and assumptions alongside the estimate.
Frequently Asked Questions
How is gratuity calculated in Oman?
For workers covered by Article 61, the employer must pay at least one basic wage for each eligible year of service, with fractions calculated proportionately.
Is Oman gratuity based on basic salary?
Article 61 uses the employee’s last basic wage as the calculation basis.
Does part of a year count?
Yes. The provision includes proportional gratuity for fractions of a year.
Is gratuity the same as final settlement?
No. Gratuity is one component. Salary, leave, notice, contractual amounts and lawful deductions may also apply.
Is Oman replacing gratuity for expatriates?
The Social Protection Law establishes a savings system that replaces employer-paid gratuity for covered non-Omani workers once the relevant provisions take effect.
When is the non-Omani provident scheme expected?
The supplied implementation material indicates July 2027 for the mandatory scheme.
Official Reference
Oman Ministry of Labour: Labour Law
Final Thoughts
The current Oman labour law gratuity calculation under Article 61 is straightforward for covered workers: last basic wage multiplied by eligible years of service, with partial years calculated proportionately.
Use the Oman Gratuity & Final Settlement Calculator to estimate gratuity and review the wider settlement components.
