Oman’s Provident Fund Scheme to Replace End-of-Service Gratuity for Expatriates From July 2027

Muscat, The Gulf Observer: A new Provident Fund Scheme for expatriate workers in Oman will come into force on July 19, 2027. It will replace the end-of-service gratuity for all service periods it covers.

Under the scheme, employers will be required to contribute 9 percent of each non-Omani worker’s basic wage every month, in line with the Social Protection Law. Workers’ accumulated savings, together with the returns earned on them, will be paid out in accordance with the provisions of the same law.

How the Provident Fund Scheme Treats Earlier Service

Gratuity earned for service before July 19, 2027 will still be honoured, and employers can settle it in one of three ways.

Under the first option, the employer keeps the accrued gratuity and pays it when the worker’s service ends. In that case, it is calculated on the worker’s basic wage at that time, as set out in the Labour Law.

Under the second, the employer pays the gratuity directly into the worker’s bank account when the scheme takes effect.

Under the third, the amount is transferred to the worker’s account with the Social Protection Fund.

A Shift for Oman’s Expatriate Workforce

The change moves expatriate end-of-service benefits from a lump sum paid by the employer to a savings-based system with regular monthly contributions. It affects the many non-Omani workers employed across the Sultanate.