How the formula works
Article 61 formula (two periods):
- Service before 31 July 2023: 15 days' basic salary per year for the first 3 years, then one month's basic salary per year after that.
- Service from 1 August 2023: one full month's basic salary per year.
The total is capped at 24 months' basic salary. There is no resignation reduction.
Worked example
A basic salary of OMR 1,000, from January 2020 to January 2026 (6.01 years): service before August 2023 (3.58 years) accrues 2,080.82 OMR at the old rate, and service from August 2023 (2.42 years) accrues 2,421.92 OMR at one month per year — total 4,502.74 OMR, under the 24-month cap.
Common mistakes
1. Ignoring the 2023 law change. Service from August 2023 accrues a full month per year — much more generous than the old 15-day rate. A single-rate calculation will understate recent service.
2. Using full pay instead of basic salary. Oman's gratuity is calculated on basic salary, not basic plus allowances.
Minimum 1 year of continuous service is required. Termination by the employer (or contract expiry) always pays the full calculated amount.
Tax: Oman levies no personal income tax, so your gratuity is paid in full. Gratuity applies to all private-sector employees regardless of nationality.