Nobody hands you a summary of your own money rules on your first day in Oman. You get a contract, a visa process, an induction that mostly covers the office Wi-Fi, and a salary figure you probably negotiated on the gross number. The rules that decide what you eventually walk away with sit in a law you have not read, and most people meet them for the first time on the day they resign.
So start with the one that changed most recently, and matters most to someone new.
Under the Labour Law issued by Royal Decree 53/2023, your end-of-service gratuity accrues at not less than one month’s basic wage for every year of service, counting from your first year. Article 61 puts it plainly: the employer must pay “a reward for his period of service, not less than a basic wage for each year of his service”, the worker is entitled to that reward “for fractions of a year in proportion to the period he spent in service”, and “the worker’s last basic wage is taken as the basis for calculating the reward”.
The first-year part is the piece worth pausing on. Under the previous Labour Law, Article 39 paid “the wage of fifteen days for each year of service for the first three years, and the wage of one month for each of the following years”. Your early years were worth half rate, and they stayed at half rate until your fourth. The new framework removed that step entirely. Year one now carries the same rate as year nine, and fractions of a year are paid in proportion at the full rate, so eight months of service is worth roughly eight months of accrual rather than four.
If you are starting your first Omani job, that is the good news. What follows is the rest of it: what starts accruing on day one, which salary figure each payment is priced on (they are genuinely not the same figure), how the 2023 transition works if you have earlier Omani service, and what is scheduled to change in 2027.
What starts accruing from day one?
Three things start building the moment you begin work. A fourth, probation, quietly decides how those first weeks get counted, which is why it belongs in the same table.
| Benefit / right | What a new employee should know |
|---|---|
| End-of-service gratuity | One month’s basic wage per year of service, from year one, paid on your last basic wage. No qualifying period is stated in Article 61, and part-years are paid in proportion. Allowances are outside the base. |
| Annual leave | Not less than 30 days a year, which works out at 2.5 days per completed month. It accrues from the start, but Article 78 stops you from taking it until six months have passed from your joining date. |
| Notice | Once you are past probation, 30 days in writing if you are paid a monthly wage and 15 days otherwise, and the same period binds both sides. Pay in lieu is priced on your last gross wage, not your basic. |
| Probation | Capped at three months for monthly-paid workers and two months for others. Either side can end the contract during it on seven days’ notice. If you pass it, that time counts inside your period of service. |
End-of-service gratuity
The mechanics are simpler than the subject’s reputation suggests. The Labour Law defines “the month” as 30 days, so your daily rate for gratuity purposes is your monthly basic wage divided by 30, and one year of service earns 30 of those days. One year, one month’s basic wage.
Two details decide whether your own number is right. The first is that the base is your last basic wage, not the wage you were on when the service was earned. Pay rises therefore lift the value of your earlier years too. The second is what “basic wage” actually means here: Article 1 defines the basic salary as the cash amount agreed between you and your employer in the contract plus the periodic bonus. If your contract carries a periodic increment, it belongs inside your gratuity base rather than outside it. Housing, transport, phone and fuel allowances do not.
Leaving early is worth doing the arithmetic on. Take a worker on a basic wage of OMR 550 who resigns after eight months. Their daily rate is 550 ÷ 30 = OMR 18.33, there are no completed years, and the part-year is prorated: roughly two-thirds of a month, or about OMR 365. Under the old 15-day schedule those same eight months would have come to about half of that, in the region of OMR 182.
One quiet exclusion is worth knowing about before you ever need it. Article 80 lets your employer grant unpaid special leave at your request, and while that period still counts as part of your service, the same article says it “is not taken into account in calculating the end-of-service gratuity stipulated in Article 61”. Long unpaid absences dilute your gratuity even though they do not break your service.
Annual leave
Article 78 entitles you to annual leave of “not less than 30 days” a year. The article states an annual figure rather than a monthly one; the familiar 2.5 days per month is simply 30 divided by 12, and it is how the accrual is applied in practice when service is measured in months rather than whole years.
The rule people misread is the six-month one. Article 78 says you “may not take the leave before the expiry of at least 6 months from the date of joining work”. That restricts taking leave. It does not delay earning it. Plenty of guides compress this into “no annual leave in your first six months”, which reads as though nothing accrues. Your balance is building the whole time, and Article 81 entitles you to be paid for the balance outstanding if your service ends before you have used it up.
Two more provisions from the same pair of articles are worth putting in your first-year memory:
- The balance you can bank is capped. A worker who has not used their annual leave may keep a balance “of not more than 30 days, unless his failure to use the leave is due to the work interest”. If leave went untaken because the job required you to stay, keep the emails. That correspondence is what moves you into the exception.
- Non-Omani workers get a return ticket. Article 78 entitles a non-Omani worker to a round-trip ticket home for the leave agreed in the contract. It is separate from the leave pay itself.
Notice rights
Article 38 sets one notice period for both directions on an indefinite contract: 30 days in writing for workers appointed on a monthly wage, 15 days for others, “unless a longer period is agreed upon in the contract”. A contract can lengthen it. It cannot shorten it.
Note what else is in that sentence, because it is the part summaries drop. Termination has to rest on “a legitimate reason”, and the notice has to be in writing. Serving notice does not by itself make a dismissal lawful in Oman.
If notice is not served, the party that ends the contract pays the other “compensation equal to the notice period or the remaining part thereof, calculated on the basis of the last comprehensive wage received by the worker”. Two consequences follow. Notice pay is pro-rated, so serving twenty of thirty days leaves ten days owing rather than thirty. And it is priced on the comprehensive (gross) wage, which is a different and larger figure than the basic wage your gratuity uses. More on that below, because it is the single most expensive misunderstanding in an Omani exit.
Article 39, sitting immediately after, adds two rules that almost never appear in English summaries. Notice issued while you are on leave “shall not take effect until the day following the end of the leave”, so a termination letter handed to you at the start of your annual leave does not quietly consume it. And during the notice period the employer “is obligated to allow the worker to be absent from work for 10 paid hours per week to look for a new job”. Ten hours, paid, in all cases, whether you resigned or were let go.
Probation
Article 37 caps probation at three months if you are paid monthly and two months otherwise, and adds a rule worth reading twice: “It is not permitted to place a worker under probation for more than one time for the same employer, and the probation period is considered part of the period of service if the worker successfully completes it.”
So probation is not a waiting room outside your service record. Pass it, and those weeks are inside your service for the purposes that depend on length of service. During probation, either side may end the contract “after notifying the other party by seven days at least”. Shorter notice, not no notice.
If you worked in Oman before August 2023, your service splits in two
If this is your first Omani job and it started after mid-2023, this section does not change your own number. It is still worth five minutes, because it explains why two pages you find online will quote you different figures, and it matters immediately if you had earlier service in Oman with any employer.
The new Labour Law came into force on 31 July 2023, the day after Royal Decree 53/2023 was published in the Official Gazette. Service that predates the change is not lost, and it is not simply upgraded either. In guidance issued in October 2024, the Ministry of Labour set out a two-part method: service completed up to the end of July 2023 is valued under the old schedule (15 days’ basic wage for each of the first three years, then one month a year), service from 1 August 2023 onward is valued at the new one-month rate, and the two amounts are added into a single payment. Both parts are priced on your last basic wage.
The Ministry’s own worked example is unambiguous. An expatriate who joined on 1 August 2021 on a basic wage of RO 500 is paid RO 250 for each of the two service years that closed before the change, then RO 500 for each year after it.
One consequence catches people out in their own favour: what matters is which service years actually completed by the end of July 2023, not merely when you joined. Someone who joined in February 2023 had not completed a single service year before the change, so their first anniversary fell under the new law and their whole entitlement sits on the one-month rate.
Where the certainty runs out
Here is the part that deserves candour rather than confidence, and it is the reason two reputable-looking sources can give you different figures.
The two-part split is not written in Article 61. What the article actually says about earlier service is this: “The period of service that began before the entry into force of this Law is included within the period of service considered in determining the period of the reward due.” Set that beside the entitlement of “not less than a basic wage for each year of his service”, and the statute read on its own words can support a full month for every year, including the years before 2023. On that reading there is no split at all.
The 15-day treatment of pre-August-2023 service comes from the Ministry’s transitional guidance, not from the text of Article 61. It is what employers apply and what the Ministry expects, so it is the method any realistic estimate has to start from. But the gap between the two readings is real money on a long tenure, and I am not aware of a published court ruling that settles which one is right.
What that means for you, practically: if a large share of your service predates 31 July 2023, work out both figures before you accept one. Then ask your employer which method they have applied, and why. It is a fair question, and the Ministry of Labour is the place to take it if the answer does not hold up. If you would rather see the split applied to your own dates first, Mukafi’s Oman end-of-service calculator shows the pre- and post-August-2023 periods as separate lines, which makes it obvious which of your years are being valued at which rate.
The wage-base trap: your settlement uses more than one salary figure
This is the section to remember if you remember nothing else, because it is where Omani final settlements most often go wrong, and the error is easy to miss when every line lands on one payslip.
The Labour Law defines two different wages in Article 1:
- Basic salary: “The cash equivalent agreed upon between the worker and the employer in the employment contract, plus the periodic bonus.”
- Comprehensive wage (commonly called the gross wage): “The basic wage plus all bonuses and allowances decided for the worker in return for his work.”
Different payments are then priced on different ones of those two figures. Take a worker with this structure:
| Component | Amount |
|---|---|
| Basic salary | OMR 550 |
| Housing allowance | OMR 150 |
| Transport allowance | OMR 50 |
| Comprehensive wage | OMR 750 |
Two daily rates come out of that one package. Basic: 550 ÷ 30 = OMR 18.33. Comprehensive: 750 ÷ 30 = OMR 25.00. Here is where each one lands:
| Payment on exit | Wage base used | Source |
|---|---|---|
| End-of-service gratuity | Basic wage | Art. 61: “the worker’s last basic wage is taken as the basis” |
| Annual-leave balance paid out (leave encashment) | Gross wage | Art. 81: entitled to the full (gross) wage for the balance when service ends |
| Untaken days bought out while still employed | Basic wage, with your written consent | Art. 81: employer “may pay the worker the basic wage for the days of annual leave that he did not take if the worker agrees to that in writing” |
| Pay in lieu of notice | Gross wage | Art. 38: “calculated on the basis of the last comprehensive wage” |
Article 81 is the clearest evidence that the distinction is deliberate rather than accidental: within the same article, the in-service buy-back is expressly on the basic wage, while the balance paid when service ends is on the full wage. Two rules, one article, two different bases.
Now price the same worker leaving at eight months with no leave taken:
- Gratuity: part-year prorated on the basic rate, about OMR 365.
- Leave balance: 2.5 × 8 = 20 days accrued, at the gross daily rate of OMR 25.00, so OMR 500. Priced on the basic wage instead it would be about OMR 367, so the wage base alone is worth roughly OMR 133 on a balance this small, and proportionally more on a larger one.
- Notice: if 30 days went unserved, 30 × OMR 25.00 = OMR 750, owed by whichever side broke the notice.
One person, one exit, and the leave and notice lines run on a daily rate over a third higher than the gratuity line. If a settlement prices all three on the same figure, at least one of them is wrong. Working out the leave side separately is the quickest way to catch it, and Mukafi’s Oman leave salary calculator applies the gross-wage rule for exactly this reason.
One last thing to check in your contract while you are looking: Article 48 allows an employer running an approved supplementary or savings programme to count its contributions against the statutory gratuity, where the programme rules say so and the amount is equal to or greater than the gratuity. In that case you receive the programme amount instead of the gratuity, not both. If you contribute to the fund yourself, the article entitles you to your own dues from the programme and the end-of-service gratuity.
What is coming in 2027?
The Social Protection Law, issued by Royal Decree 52/2023 on 19 July 2023, provides for a mandatory savings system for non-Omani workers. It is a defined-contribution arrangement funded by a monthly contribution of 9% of the insured non-Omani worker’s basic wage, held in a personal account with the Social Protection Fund, and it is designed to take over from the employer-paid end-of-service lump sum.
It did not begin in 2026. That point needs stating flatly, because a good deal of what is still online says otherwise. The original law gave the Social Protection Fund’s board three years from the decree’s issuance to bring the system in, which pointed at 19 July 2026. Royal Decree 60/2025, issued on 13 July 2025, widened that window to four years, and the date now reported for implementation is 19 July 2027. The same decree moved other branches as well: sick-leave and unusual-leave insurance to 19 July 2026, and work-injury and occupational-disease insurance for non-Omani workers to 19 July 2028.
Read the amendment precisely, because the distinction matters if you are planning around it. What the decree sets is an outer limit: the provision comes into force on a date the Fund’s board specifies, not exceeding four years from issuance. July 2027 is therefore the deadline the board is working within rather than a switch already scheduled to flip on that morning.
Article 61 anticipated this. Its second paragraph states that “the provisions of this article shall apply until the savings system stipulated in the Social Protection Law is implemented”, and allows an employer to settle your pre-savings-system service either into the savings system or directly to you, calculated on the basic wage at the settlement date.
So the position through your first year is straightforward. Employer-paid gratuity under Article 61 is live and enforceable now. Nothing in the Social Protection Law has removed it in the meantime. Omani nationals are covered by the social-insurance and Social Protection Fund system rather than employer gratuity.
Beyond that, restraint is the honest answer. How accrued service will be handled at the crossover, and the mechanics of the transfer, are matters for implementing regulations that have not been issued. If your exit is likely to fall near mid-2027, treat any figure you calculate today as provisional and check the position again closer to the date.
Your first-year Oman employment checklist
- Get a copy of your signed employment contract and keep it somewhere you will still have it in five years. Every calculation in this article depends on what it says, and it is the first document anyone will ask for.
- Find the exact split between basic salary and allowances on your payslip. Two figures, written down: your basic wage and your comprehensive wage. Your gratuity runs on the first, your leave payout and notice pay on the second.
- Keep your own record of annual leave taken. Dates, days, and the approval. Your accrual is 2.5 days a month; the only contested part at the end is usually how much you have already used.
- Save your payslips and anything showing a pay rise. Your gratuity is priced on your last basic wage, so the record of what that is matters more than the earlier ones.
- Read your probation and notice clauses now, not when you are resigning. Confirm whether your contract lengthens the statutory notice, and remember that probation notice is seven days while post-probation notice is 30 or 15.
- Check your expected end-of-service position once a year, at your anniversary. It takes ten minutes, it tells you what you are actually walking away from before you weigh up an offer elsewhere, and it means a wrong settlement gets spotted while the evidence is still to hand.
A seventh item for anyone who ever suspects a shortfall: Article 9 provides that “the right to claim any of the rights stipulated in this law shall lapse after one year from the date of its entitlement”. A one-year clock is not long. That single provision is the strongest practical argument for keeping the paperwork above, and for raising a discrepancy early rather than filing it away.
Where to check any of this yourself
The full text of the Labour Law is published on Oman’s official decree portal, Royal Decree 53/2023. The articles doing the work in this guide are 1 (wage definitions), 9 (time limit on claims), 37 (probation), 38 and 39 (notice), 48 (employer savings programmes), 61 (gratuity), 78, 80 and 81 (annual leave). The savings-system deferral is in Royal Decree 60/2025, and the Ministry of Labour is the authority on the transitional gratuity method and the place to take a settlement you believe is wrong.
This is an explanation of the rules, not legal advice on your situation. What you are actually owed turns on your contract, your recorded service dates, your salary structure, how your employment ends, and in the case of pre-2023 service, on an interpretation that has not been judicially settled. For a disputed amount, take it to the Ministry of Labour or a qualified Omani lawyer with your documents in hand.
