The Savings Scheme Set to Replace Expat Gratuity by 2027

If you employ workers who are not Omani, the end of service gratuity you owe them is due for a major change. A new Social Protection Fund savings scheme is meant to replace that gratuity with monthly deposits into each worker's own account, but the start date has already been pushed back once, to 19 July 2027. Here is what has actually changed, what is still only announced, and what one payslip looks like under both systems.

What's changing, and why it touches your payroll

Right now, most non-Omani employees in Oman's private sector are entitled to an end of service gratuity. That means when their job ends, their employer pays them a lump sum built up over their years of service. It is a promise sitting on the employer's books, not money held anywhere else.

Oman's Social Protection Law, issued as Royal Decree 52/2023, is gradually replacing several old labour and insurance rules with one system run by the Social Protection Fund (SPF), the government body that has managed Oman's pensions and social insurance since January 2024. One part of that law aims to swap the gratuity promise for a real, government held savings account, funded every month by the employer.

How gratuity works today

For any service a non-Omani worker completes after 31 July 2023, the rule is one full basic salary for every year worked, paid directly by the employer when the job ends, as set out in Oman Observer's coverage of the change. For older service completed before that date, the earlier rate of half a basic salary per year still applies to that portion. Basic salary here means the fixed pay in the contract, not housing, transport or other allowances.

For the full formula, including part years of service, our earlier guide on how the end of service gratuity gets calculated walks through it step by step. None of that changes until the savings scheme is actually switched on.

What the savings system will do instead

Once the savings system for non-Omani workers switches on, employers will no longer just owe a lump sum. Instead, each month, the employer must pay 9 percent of the worker's basic wage into that worker's own savings account, held and managed by the SPF. This is set out in the Executive Regulation of the Social Protection Law. The 9 percent applies up to a monthly salary ceiling of OMR 3,000, so any basic wage above that ceiling is not counted for the contribution.

The money in that account belongs to the worker from the moment it lands, not the employer. Workers can add their own voluntary top ups, and so can a third party such as a family member. When the worker's service in Oman ends, the saved amount, contributions plus any returns, can be paid out as one lump sum or in instalments, at the worker's choice.

What is live now, and what is only announced

It helps to separate what applies to your payroll this month from what is still on paper.

• Live now: the Social Protection Fund itself, running Oman's pensions since January 2024, and the current gratuity formula described above.
• Announced but delayed: the 9 percent savings scheme for non-Omani workers, first due on 19 July 2026, then pushed to 19 July 2027 by Royal Decree 60/2025.
• Also delayed: the sick leave insurance branch for non-Omani workers, moved to July 2026, and the work injury insurance branch, moved to July 2028.
• Unchanged either way: gratuity already earned before the savings scheme starts stays payable under today's rules. Nothing forces a business to convert past service into the new account.

See the numbers side by side

This is a worked example, not a real business. Take Ravi, an electrician who has worked for five years at a maintenance workshop in Ghala run by Nasser. His basic wage is OMR 300 a month, on top of a housing allowance that does not count toward either system. Here is one year of his service, priced out under today's rule and under the future savings system.

This is a simplified example for one worker on a fixed basic wage. Real payslips vary with allowances, part years of service, and any voluntary top-ups a worker chooses to add once the account exists.

What this means for you

If you run a small business with non-Omani staff, keep paying gratuity exactly as you calculate it today. Nothing about the current formula changes until the savings scheme actually starts, and that date has already moved once.

Start separating each non-Omani employee's basic wage from allowances in your payroll records now, since the future 9 percent contribution will be calculated on basic wage only. If you run payroll through a system such as Amaal's HRM and payroll module, keeping that split clean today means you will not need to re-enter years of salary history later.

Watch the Social Protection Fund's own updates rather than rumours, since the 2026 date already slipped once. Check the Social Protection Fund's FAQ page occasionally for confirmation before you change anything in your payroll setup.

The bottom line

Oman's plan to swap expat gratuity for a personal savings account is real and written into law, not a rumour. But its start date has already slipped once, from 19 July 2026 to 19 July 2027, so keep paying gratuity under today's rules until the Social Protection Fund confirms otherwise.