Oman’s private-sector employment rules are in the Labour Law issued by Royal Decree 53/2023, published in the Official Gazette on 30 July 2023 and in force from 31 July 2023 (some sources give 26 July). It replaced the 2003 law, Royal Decree 35/2003. This guide gives estimates for information, not legal advice.
Who the law covers
The gratuity described here applies to non-Omani private-sector employees. Omanis are insured with the Social Protection Fund and receive a pension rather than a gratuity.
End-of-service gratuity
Gratuity is set by Article 61.
- Wage used: your last basic wage. Article 1 defines basic wage as the contract wage plus the periodic allowance.
- Minimum service: none. The old one-year minimum was removed.
- Formula: at least one month’s basic wage for each year of service, at a flat rate. Part years are paid pro rata.
- Cap: none stated.
Service before 31 July 2023
Ministry of Labour guidance, as reported in the press, calculates each period under its own law:
| Period of service | Gratuity per year |
|---|---|
| Before 31 July 2023, years 1–3 | 15 days’ wage (half a month) |
| Before 31 July 2023, each later year | One month’s wage |
| From 31 July 2023 | One month’s basic wage |
Our calculator splits your service at 31 July 2023 and applies the right rate to each part. We could not read the ministry circular itself, so check the wording with your employer or the ministry if your service crosses that date.
Resignation and dismissal
There is no reduction for resignation. Gratuity is lost only on dismissal under Article 40, which lists nine grounds, such as using forged documents, causing serious loss, or unexcused absence of more than 7 consecutive or 10 separate days after a warning. Article 41 lets a worker leave without notice and keep the gratuity where the employer is at fault. An employer savings plan approved under Article 48 may replace the gratuity.
The Social Protection Fund savings system
The Social Protection Law (Royal Decree 52/2023) will replace the gratuity for non-Omanis with a savings system: the employer pays 9% of monthly basic wage into the Fund (Articles 137 and 139). Royal Decree 60/2025 lets the Fund’s board set the start date, no later than 19 July 2027. As of October 2026 we found no decision setting an earlier date, so the Article 61 gratuity still applies. Gratuity earned before the switch remains owed (Article 138).
Annual leave
Article 78 gives at least 30 days of annual leave a year on full wage, taken after six months of service. Up to 30 days may be carried over. Value your leave with the Oman leave salary calculator.
Overtime
Under Article 71, overtime is paid on the basic hourly wage:
- daytime overtime: + at least 25%;
- night overtime: + at least 50%;
- work on the rest day or a public holiday: + 100% of the daily basic wage, or a day off in lieu.
Try the Oman overtime calculator.
Notice period
For open-ended contracts, Article 38 requires 30 days’ notice for monthly-paid workers and 15 days’ for others. Redundancy requires three months (Article 46).
Worked example
An employee earns a basic wage of OMR 600 a month, joined on 1 August 2020 and leaves on 31 July 2026, about 6 years in total.
- Service before 31 July 2023: about 3 years × half a month = 1.5 months = OMR 900
- Service from 31 July 2023: about 3 years × one month = 3 months = OMR 1,800
- Gratuity: about OMR 2,700
Had the whole six years fallen under the new law, the gratuity would be 6 × 600 = OMR 3,600, so the transition matters. The exact figure depends on the days in each period; the Oman gratuity calculator works it out to the day.
Common mistakes
- Applying the new rate to all service. Service before 31 July 2023 is calculated under the old law.
- Leaving out the periodic allowance. Oman’s basic wage includes it.
- Assuming the savings system has started. Until the Fund sets a date, the gratuity applies.
- Expecting a resignation cut. There is none.