Do allowances count towards the award in Oman?

Wages in Oman are assessed on the "basic wage only, excluding allowances" basis. See "How is the award calculated?" above for details.

When and how is the award paid?

The gratuity is paid on termination of the employment relationship. Once the savings system under the Social Protection Law is enforced, employers will transition accrued gratuity into it (or settle it directly) — the employer may already settle pre-savings-system rights at the basic wage on the settlement date.

Are fractions of a year counted?

Yes — fractions of a year are pro-rated to the actual period of service.

End-of-Service Benefits Guide: Oman

This guide explains the key end-of-service rules in Oman in plain language, based on Royal Decree No. 53/2023 promulgating the Labour Law. Every figure comes from the official texts listed under Sources below, and the worked example is computed by our own calculator.

Scope: private-sector employees covered by the labour law. Excludes domestic workers, free-zone employees under separate regimes, and workers covered by national pension/social-insurance systems.

Who qualifies?

On termination or contract expiry: no statutory minimum service period.
On resignation: no statutory minimum service period.

This formula covers workers not under the Social Protection Law; those covered fall under its own system.

How is the award calculated?

The award is based on the "basic wage only, excluding allowances", with fractions of a year pro-rated to actual service. The formula:

a full month for each year of service

Worked example

An employee on a monthly wage of 10,000 OMR with 6 years of service (termination case):

6 years × a full month of the wage = 60,000 OMR
Total: 60,000 OMR

Resignation vs termination

The law does not distinguish between resignation and termination when calculating the award — the result is the same either way.

Cap on the award

no statutory cap on the total award

Notice period and annual leave

Notice (Indefinite contracts, monthly-paid workers (Art 38)): employee 30 days / employer 30 days.
Notice (Indefinite contracts, other workers (Art 38)): employee 15 days / employer 15 days.
Annual leave: 30 days — With full wage, after 6 months from joining; full wage for the leave balance if service ends before use (Arts 78, 81).

Transitional periods

Service before 31 July 2023: old formula — 15 days’ basic wage per year for the first three years of that period, one month’s basic wage per year after. Service from 31 July 2023: one month’s basic wage per year. The two portions are calculated separately on the worker’s last basic wage and added.

31 July 2023 Honesty note: press coverage of the ministerial clarification disagrees on the split date (the law’s effective date vs the contract-conclusion date); we use the effective date here and flag the disagreement.

Common mistakes

Applying the new-law formula to service before its effective date.
Assuming workers under the Social Protection Law use the same formula.
Including allowances in the base — the law uses the last basic wage.

Notes on the figures

We treat 15 days as half a month (15/30) in the old-law formula.
Because you did not enter a start date, the whole period was calculated under the new law. Enter the date for an exact split.

Official sources

Every figure in this guide comes from the following official sources:

Royal Decree No. 53/2023 promulgating the Labour Law — Article 61

Official law text (qanoon.om): not less than the basic wage per year, pro-rata fractions, last basic wage basis, pre-law service counted; applies until the savings system starts.
https://qanoon.om/p/2023/rd2023053/
Labour Law (Royal Decree No. 35/2003) — Article 39 (old formula, per MoL clarification)

MoL clarification (reported by Muscat Daily, Oct 2024): service under the previous law keeps the old formula — 15 days’ basic per year for the first three years, one month per year after. Worked example: 2 years pre-law at half a month/year + post-law at one month/year.
https://www.muscatdaily.com/2024/10/23/mol-clarifies-gratuity-calculation-for-expats-in-oman/
Royal Decree No. 53/2023 promulgating the Labour Law — Articles 38, 78, 81

Art 38: 30 days’ notice (monthly-paid), 15 days (others). Art 78: ≥30 days’ annual leave after 6 months. Art 81: full wage for the leave balance on termination.
https://qanoon.om/p/2023/rd2023053/

Frequently asked questions

Do allowances count towards the award in Oman?: Wages in Oman are assessed on the "basic wage only, excluding allowances" basis. See "How is the award calculated?" above for details.
Is the award lower if I resign?: No — the law does not distinguish between resignation and termination when calculating the award.
When and how is the award paid?: The gratuity is paid on termination of the employment relationship. Once the savings system under the Social Protection Law is enforced, employers will transition accrued gratuity into it (or settle it directly) — the employer may already settle pre-savings-system rights at the basic wage on the settlement date.
Are fractions of a year counted?: Yes — fractions of a year are pro-rated to the actual period of service.