How Salary Deductions Work in Oman (2026)
Oman is the Gulf's tax outlier twice over: it has no income tax today, but it's the first Gulf state scheduled to introduce one — 5% from January 2028. Add a 2023 rewrite of gratuity law, and Oman has the most moving parts of any Gulf paycheck. Here's the full picture.
SPF — 8% for Omani nationals
The Social Protection Fund takes 8% (7.5% pension + 0.5% job security) of salary between OMR 180 and OMR 3,000/month from Omani nationals. Expatriates pay 0%.
The 2028 income tax — what we know
Royal Decree 56/2025 introduces a 5% personal income tax from 1 January 2028 on annual income above OMR 42,000 (≈OMR 3,500/month). Below that: 0%. Details of deductions are still being finalized — we'll update this guide and our calculator the moment the executive regulations publish.
End-of-service gratuity — the 2023 rewrite
Article 61 (Royal Decree 53/2023) split gratuity into two eras: service before 31 July 2023 accrues 15 days' basic salary/year for the first 3 years and one month/year after; service from 1 August 2023 accrues one full month's basic salary per year — much more generous. Capped at 24 months' basic salary. No resignation reduction.
Worked examples
Example 1 — Omani national, OMR 1,200/month: SPF = 8% × 1,200 = OMR 96. Take-home = OMR 1,104. No income tax (and below the 2028 threshold).
Example 2 — expat gratuity, basic OMR 700, Jan 2020 – Dec 2026 (7 yrs): pre-Aug 2023 (3.58 yrs): 0.5 × 700 × 3 + 1 × 700 × 0.58 = OMR 1,456; post-Aug 2023 (3.42 yrs): 700 × 3.42 = OMR 2,394. Total ≈ OMR 3,850.
Basic vs. allowances — why the split matters
Oman gratuity is calculated on basic salary only. SPF uses a capped band (OMR 180–3,000), so Omani nationals earning above OMR 3,000 pay a flat OMR 240/month. And from 2028, the OMR 42,000 tax threshold will make the definition of taxable income matter — watch this space.
Sending money home
The Omani rial is pegged at 2.60 USD per OMR (inverted peg) — one of the world's strongest units. Compare total received across providers and check the live rate on our salary currency converter before transferring.
Common mistakes
1. Using the old 15-day formula for recent service. Anything from August 2023 earns a full month per year — nearly double.
2. Assuming the 2028 tax applies now. It doesn't — 2026 and 2027 remain tax-free.
3. Forgetting the 24-month cap on very long service.
Try it: Oman salary calculator →
Oman — frequently asked questions
Is there income tax on salary in Oman?
Not yet. Oman has no personal income tax in 2026–2027. A 5% tax starts on 1 January 2028 on annual income above OMR 42,000 (Royal Decree 56/2025) — the first Gulf state to introduce one.
How much is SPF deduction in Oman?
Omani nationals: 8% of salary between OMR 180 and OMR 3,000/month (7.5% pension + 0.5% job security). Expatriates pay 0%.
How is end-of-service gratuity calculated in Oman?
Under Article 61 of the Labour Law (Royal Decree 53/2023): service before 31 July 2023 accrues 15 days' basic salary per year for the first 3 years and one month per year after; service from 1 August 2023 accrues one full month's basic salary per year. Capped at 24 months' basic salary. Resignation does not reduce it.
What is the savings system replacing gratuity in Oman?
Oman's Social Protection Law envisages a savings system that will eventually replace end-of-service gratuity for expats — the employer contributes monthly instead of paying a lump sum at exit. The switchover date isn't fixed yet; until then, Article 61 gratuity applies.
Do Omani nationals get gratuity or pension?
Omani nationals covered by the SPF system receive pension and social protection benefits instead of the expat gratuity — Article 61 gratuity is for workers not covered by the Social Protection Law.
Sources & verification
Figures compiled from: SPF · Oman Ministry of Labour — RD 53/2023.
Last verified: 23 October 2026. Estimate only — not tax advice.