1. How do I configure calculation cards for Oman?
  2. Gratuity Calculation

Gratuity Calculation

Gratuity is an extra payment entitled to people working in Oman when they're terminated.

The entitlement to this payment is accrued during the work relationship.

Gratuity Calculation Factors

  • Gratuity calculations are only triggered if a person isn't registered, or, isn't eligible for social insurance and if the employer has opted to pay gratuity to their employees.
  • The Oman labor laws decide the gratuity amount to be paid.
If you're not following the Oman labor laws, you can define your own formula for gratuity processing. Look at the following options when using a formula:
  • You can override the assigned gratuity amount. You don't need to use the localization solution for gratuity processing.
  • You can create a setup according to the values to be returned to the formula run results.
  • Define your own reference formula for gratuity processing, which replaces the gratuity formula defined at the legislative level. If a user defined formula exits, then the predefined formula executes it.
Tip: You don't need to use the localization solution for gratuity processing if you've defined a formula.

Gratuity Processing Rules

  • The duration of service decides the number of days of gratuity payment for which the employee is entitled per year of service. These days are retrieved from the legislative repository for calculation information.
  • Unpaid absences reduce the duration of service. Create elements for the Unpaid Leave classification and link them to an absence type to record this info.
  • If an absence type is recorded, the value of days from Unpaid Leave elements is used in Leave Without Pay balance. This is used in the gratuity formula to get the unpaid absences.
  • The base salary for gratuity is calculated through the salary formula selected at the legal employer level.
  • Terminations
    • Gratuity isn't paid to employees if the reason for termination is Dismissal. Any other reason for termination will process gratuity payment.
    • If the employee doesn't meet the minimum service criteria, gratuity isn't paid. With the only exception, the reason being death.