Old or new contract: which gratuity formula applies in Oman?
Written by Usama Afzal. Last updated: October 2026. Based on the Oman Labour Law; not legal advice.
It depends on when your contract was signed. Under the Ministry of Labour's August 2026 clarification, contracts concluded under the old law (before 31 July 2023) get 15 days' basic salary for each of the first 3 years and a month for each year after. Contracts under the new law get at least a month's basic salary for every year.
The two formulas
| Contract | Gratuity |
|---|---|
| Signed from 31 July 2023 | 1 month's basic salary per year |
| Signed before 31 July 2023 | 15 days per year for 3 years, then 1 month per year |
Example on OMR 400 basic, 5 years
| Contract | Calculation | Gratuity (OMR) |
|---|---|---|
| New | 400 × 5 | 2,000 |
| Old | 200 × 3 + 400 × 2 | 1,400 |
Some employers split the service
Some employers instead count service before 31 July 2023 under the old formula and the rest under the new one. Ask for a written calculation and compare it with the Oman calculator, which lets you choose the contract type.
Renewed contracts
If you signed a new contract after 31 July 2023, for example on renewal, you may fall under the new formula. Check the date on your current contract.
Work out your own amount
Enter your dates and salary to see your end-of-service pay instantly.