Oman to Replace Expat End-of-Service Gratuity With Mandatory Savings Scheme From July 2027

The Social Protection Fund has confirmed the start date and set out how benefits earned before then will be protected, Gulf News reported, citing local media. Contributions will go into individual accounts in each worker's name. Under Oman's Social Protection Law, workers are entitled to their savings plus any investment returns. The money can be paid out as a lump sum or in instalments.

For companies, this is a change to how they pay staff and how they account for it. Under the current system, employers owe a gratuity when a worker leaves and many hold it as a liability until then. The new scheme turns that into a monthly cash payment to a state-run fund, so businesses will need to change payroll systems, cash planning and how they manage end-of-service obligations they already carry. With more than 1.06 million insured expatriate workers in Oman as of January 2026, according to fund figures released in March, a large share of the private sector is affected.

The fund said gratuities built up before July 19, 2027 will stay protected. Employers can deal with them in one of three ways. They can keep the accrued amount and pay it when the worker leaves, calculated on the worker's basic salary at that time under the Labour Law. They can pay it straight into the employee's bank account when the scheme starts. Or they can transfer it to the employee's individual account at the Social Protection Fund.

The savings scheme is one stage of a phased reform the fund announced in March, which also covers sick leave insurance and occupational injury protection. Occupational injury insurance for expatriate workers is due in 2028, after the savings scheme takes effect.