The Ministry of Labour in Oman has directed that private companies should adhere to all legal conditions for the payments at the end of service, making it clear that the employees who are entitled to receive the money must receive their due amount immediately upon termination of the agreement.
The notification from the ministry is intended to ensure timely receipt of post-service benefits by the workers while assisting the companies in calculating gratuity payments in accordance with the old and new labour laws.
Officials outlined the applicable formulas based on the date an employment contract was signed, reflecting changes introduced under Royal Decree No. 53/2023.
For contracts signed before the new Labour Law came into force, gratuity must be calculated using the earlier system. Employees are entitled to the equivalent of 15 days’ basic salary for each completed year of service during the first three years, followed by 30 days’ basic salary for every additional completed year thereafter.
Employees hired under the Labour Law introduced through Royal Decree No. 53/2023 are entitled to a minimum end-of-service benefit equal to one full basic monthly salary for each completed year of service, provided they are outside the Social Protection Law. The ministry also stressed that all calculations must be based on the employee’s final basic monthly salary rather than total earnings or previous wage levels.
The latest reminder forms part of the ministry’s broader efforts to strengthen compliance with employment regulations and ensure private sector companies meet their financial obligations toward departing workers. By reiterating the applicable calculation methods and payment timelines, authorities are seeking to reduce disputes over employment benefits and improve transparency in employer-employee relations. Oman’s labour reforms introduced in recent years have updated several aspects of employment legislation, including end-of-service benefits, worker protections and employer responsibilities. The ministry’s latest directive underscores that prompt settlement of employee dues remains a key legal requirement for businesses operating in the Sultanate.
