Oman end-of-service gratuity and the new savings system: what employers pay (2026)
Until the savings system starts, an employer in Oman owes expatriate staff a gratuity of at least one month's basic wage for each year of service, pro rata, on the last basic wage. From a date the Social Protection Fund's board sets, and no later than 19 July 2027, the employer pays 9% of the monthly basic wage into the savings system instead. Gratuity already earned before that date is still owed.
End-of-service and savings in Oman
- Gratuity of one basic wage yearly
- Pre-start gratuity settled at switch
- Monthly 9% savings contributions
Oman pushes the expatriate savings system start back to July 2027 at the latest
What happened
Royal Decree 60/2025, issued on 13 July 2025, amended the Social Protection Law so that the 9% savings contribution for non-Omani workers starts on a date set by the Social Protection Fund's board. That date can be no more than four years from the 2023 decree, which replaced the original limit of three years.
What it means for you
Employers keep accruing the Article 61 gratuity for expatriate staff until the board fixes the start date. Budget for a switch to monthly 9% contributions no later than 19 July 2027, and for settling the gratuity earned before it.
Dates to know
- 13 July 2025Royal Decree 60/2025 issued
- 19 July 2027 at the latest9% savings contributions replace the gratuity for later service
Source: Oman News Agency. We check this page every week. Last checked .
Oman's end-of-service gratuity is a lump sum the Labour Law requires an employer to pay a worker who is not covered by the Social Protection Law when the job ends. In practice that means expatriate staff, because Omani workers are insured with the Social Protection Fund and earn a pension instead. The gratuity is at least one basic wage for each year of service, on the last basic wage. The Social Protection Law replaces it with a savings system: the employer pays 9% of each non-Omani worker's monthly basic wage into a personal savings account held by the Social Protection Fund, which the worker draws when the job ends. The gratuity rule stays in force until the savings contributions begin.
How is the end-of-service gratuity calculated in Oman?
At no less than one basic wage for each year of service, with part years paid in proportion. The calculation uses the worker's last basic wage, not total pay. Service that began before the 2023 Labour Law took effect also counts.
This is Article 61 of the Labour Law issued by Royal Decree 53/2023. It applies to workers who are not covered by the Social Protection Law. Because allowances sit outside basic wage, the split between basic wage and allowances agreed at hire sets the size of the gratuity years later.
Our arithmetic: what is the gratuity after four and a half years?
For an expatriate whose last basic wage is OMR 800 a month and who leaves after four and a half years, the minimum gratuity is 4.5 times OMR 800, which is OMR 3,600. Housing and other allowances do not count.
This is our own worked example using the Article 61 formula: one basic wage per year, pro rata for the half year. A contract can be more generous, but not less. If the savings system had already started part way through, the gratuity would only cover the years before the start date, and the later years would sit in the savings account.
What is the savings system and who pays into it?
It is a defined contribution scheme run by the Social Protection Fund. It is compulsory for non-Omani workers and funded by 9% of the worker's monthly basic wage. The executive regulation puts the duty to pay contributions for non-Omani insured workers on the employer.
Article 137 of the Social Protection Law says the savings system replaces the end-of-service gratuity that employers pay non-Omanis. Employers must register non-Omani workers in the system within 30 days of their joining work, and the regulation sets a minimum annual return of 2%. For an expatriate on OMR 800 basic a month, 9% comes to OMR 72 a month, or OMR 864 a year, by our arithmetic.
When does the savings system start?
On a date set by the Social Protection Fund's board, which can be no later than 19 July 2027. Royal Decree 60/2025 of 13 July 2025 extended the limit from three years to four years after the Social Protection Law was issued on 19 July 2023.
We found no board decision fixing an earlier start date on official sources as of 8 October 2026. Until a date is set, the Article 61 gratuity keeps accruing for every expatriate on the payroll.
What happens to gratuity earned before the savings system starts?
It is still owed. The employer either pays it to the worker under the Labour Law when service ends, or settles it into the savings system or directly to the worker. A settlement made early is calculated on the basic wage on the settlement date.
Article 138 of the Social Protection Law and the last paragraph of Article 61 of the Labour Law both keep the pre-start gratuity alive. Savings for service after the start date are paid out of the Fund, for example when a non-Omani worker's employment ends, unless the worker takes another job within the period the regulation sets.
Does a worker who resigns still get the gratuity, and when can it be withheld?
Article 61 does not reduce the gratuity when a worker resigns. The employer can only withhold it when it dismisses the worker without notice for one of the nine reasons in Article 40, such as forged documents, more than 7 days' consecutive unexcused absence or a serious breach of duties.
The reverse also applies. Under Article 41 a worker can leave without notice and keep the full gratuity if the employer has not paid wages for more than two consecutive months, committed fraud at hiring, or assaulted the worker. Unpaid special leave and unpaid childcare leave count as service but are left out when the gratuity is calculated (Articles 80 and 83).
When must the gratuity be paid, and what if it is late?
Immediately when the employment ends. If the worker left of their own accord, the employer has 7 days from the date the worker left to pay all wages and dues. Breaching Article 61 or Article 91 carries a fine of OMR 500 to OMR 1,000 for each worker affected.
The fine in Article 147 doubles for a repeat offence. When service ends, the employer may deduct sums owed to the government or proven sums owed to the employer from the gratuity (Article 96). On request, the employer must also give the worker a free end-of-service certificate showing dates, job and pay (Article 62).
Can an employer's own savings plan replace the gratuity?
Yes, if the plan's rules say the employer's payments are in place of the gratuity and they equal or exceed it. The Ministry of Labour and the Social Protection Fund must approve the plan in advance. If the payments fall short, the full gratuity is owed.
This is Article 48 of the Labour Law. If the worker also contributed to the plan, the worker may receive both the plan amounts and the gratuity.
Key figures
| Detail | Value |
|---|---|
| Gratuity formula, Article 61 | At least one basic wage for each year of service, pro rata for part years, on the last basic wage, for workers not covered by the Social Protection Law. Service before the 2023 law counts. (source) |
| Gratuity lasts until the savings system | Article 61 applies until the savings system starts. Service before that date may be settled into the savings system or to the worker, on the basic wage at the settlement date. (source) |
| Savings contribution | 9% of the non-Omani worker's monthly basic wage. Compulsory for non-Omani workers, and it replaces the employer-paid gratuity. (source) |
| Savings start date | Set by the Social Protection Fund's board, no more than 4 years from 19 July 2023, so no later than 19 July 2027. (source) |
| Registration and minimum return | Employers register non-Omani workers in the savings system within 30 days of their joining work. The minimum return is 2% a year. (source) |
| Loss of gratuity, Article 40 | An employer may dismiss without notice and without gratuity only in the nine cases Article 40 lists, such as forgery, serious loss reported within 30 working days, or more than 7 consecutive days of unexcused absence. (source) |
| Payment deadline, Article 91 | All wages and dues are paid immediately when employment ends, or within 7 days if the worker left of their own accord. (source) |
| Penalty | A fine of OMR 500 to OMR 1,000 for breaching Article 61 or Article 91, applied per worker and doubled for a repeat offence. (source) |
| Unpaid leave | Unpaid special leave and unpaid childcare leave count as service but are not counted when calculating the gratuity. (source) |
| Employer savings plans, Article 48 | An approved employer plan can replace the gratuity if its payments equal or exceed it. Prior approval from the Ministry of Labour and the Social Protection Fund is required. (source) |
Frequently asked questions
Is Oman's gratuity based on basic or total salary?
Basic. Article 61 uses the worker's last basic wage, so allowances such as housing and transport are left out. The savings system also uses basic wage: 9% of the monthly basic wage.
Do Omani employees get an end-of-service gratuity?
Article 61 covers workers who are not covered by the Social Protection Law. Omani workers are compulsorily insured with the Social Protection Fund and build a pension instead, funded by employer and employee contributions.
Does the 9% come out of the employee's pay?
The Social Protection Law funds the savings system with 9% of the non-Omani worker's monthly basic wage, and the executive regulation places the duty to pay it on the employer. It replaces a cost the employer already carries, the gratuity.
What happens to the gratuity an expatriate has already earned when the savings system starts?
It is still owed. The employer pays it when service ends under the Labour Law, or settles it into the savings system or to the worker. Only service after the start date is covered by savings contributions.
When does an expatriate get the savings out?
Under Article 143 of the Social Protection Law, a non-Omani worker is entitled to the savings when the employment relationship ends, unless the worker starts another employment contract within the period set by the regulation. Death and permanent disability also release the savings.
Each of the six Gulf states writes its own labour law, its own end-of-service rules and its own quota for hiring citizens. When Teamed is your legal employer, we apply the right rules for the country each person works in and update your contracts, policies and payroll as the law changes, so you never have to read a statute to stay compliant.
