Oman Gratuity & the New Law 53/2023: What Changed
Oman overhauled end-of-service pay with Royal Decree 53/2023. If your service straddles August 2023, two formulas apply — here is how to split them.
Oman's new Labour Law (Royal Decree 53/2023) changed how end-of-service gratuity accrues. The headline is good news for employees: the rate went up. But because the change has an effective date, anyone whose employment spans it needs to compute two periods.
The new rule (service from August 2023)
For service earned from August 2023 onward, you get a straight one month of basic salary per year — a simple, generous rate.
The old rule (service before August 2023)
If you started before August 2023, your earlier service is computed on the previous formula:
- 15 days per year for the first 3 years, then
- one month per year after that.
The two periods are added together for your total gratuity.
Worked example: service spanning the change
An employee on OMR 600 basic with 5 years total, of which 2 fell before August 2023:
- Old-law portion (2 years, first-three-years band) = 2 × 15 × (600 ÷ 30) = OMR 600
- New-law portion (3 years) = 3 × 600 = OMR 1,800
- Total gratuity = OMR 2,400
Second example: all service under the new law
An employee who joined after August 2023, on OMR 800 basic with 4 full years, has every year under the new rate:
- Gratuity = 4 × 800 = OMR 3,200
Under the old formula those same four years would have been 15 days for the first three plus one month for the fourth — noticeably less — which is exactly why the reform matters for anyone building service now.
Why the split matters
The effective date is the whole reason you cannot just multiply your total years by one rate. If any of your service predates August 2023, that slice keeps the old, less generous formula, while everything after uses one month per year. Splitting the two periods correctly is the difference between an accurate figure and an over- or under-estimate.
Key points
- Basic salary only — allowances are excluded.
- One year minimum continuous service.
- The new rate is more generous than the old one, which particularly benefits long-tenure staff building years under the new formula.
- Only the pre-August-2023 slice uses the old 15-days-for-first-3-years band.
How Oman compares
Oman's straight one-month-per-year rate for new service is now among the most generous first-band rates in the Gulf — ahead of Qatar's three weeks and the UAE's 21 days for the first five years. It still uses a basic-salary-only base, like the UAE and Qatar, so allowances do not count. See the region-wide picture in the GCC end-of-service comparison.
Calculate yours
The Oman Gratuity Calculator lets you enter how many of your years fell before August 2023, so both periods are computed correctly. For the statute detail see the Oman gratuity guide. To compare Oman with the rest of the region, read the GCC end-of-service comparison.
Frequently asked questions
How is gratuity calculated in Oman in 2026?
Under the 2023 Labour Law, one month of basic salary for each year of service from August 2023. Service before then uses the old formula: 15 days per year for the first three years and one month per year after.
What changed with Royal Decree 53/2023?
The rate for service from August 2023 was raised to a straight one month of basic salary per year — more generous than the previous formula, which paid only 15 days per year for the first three years.
Is Oman gratuity on basic or gross salary?
Basic salary only. Allowances are excluded from the gratuity calculation.
What is the minimum service for Oman gratuity?
One year of continuous service.
Which of my years use the old Oman formula?
Any service before August 2023 uses the previous formula (15 days per year for the first three years, then one month per year); all service from August 2023 uses the new one-month-per-year rate.