Deducting a loan from final dues
The employee still owes a salary advance. Can we deduct it from gratuity?
The situation
Final settlements can include deductions for documented debts owed by the employee.
The law
- Labour Law, Royal Decree 53/2023: Private sector employment law from 2023; Art. 18 to 26 on employing Omanis
- Labour Law RD 53/2023 and MOL circular (August 2026) on gratuity: Non-Omanis not under the Social Protection Law: at least one basic wage per year under the new law; old law periods 15 days a year for the first 3 years then one month
What it means for you
Deduct only what a signed agreement supports and show it on the final statement. For a gratuity of OMR 2,700 and an advance balance of OMR 400, pay OMR 2,300. Undocumented deductions are easy for the employee to challenge at MOL.
What to do
- Collect the signed advance agreement.
- Show the deduction on the final statement.
- Pay the net amount on time.
- Get the employee's signature.
We can do this for youEnd of service gratuity for non-Omani staff: OMR 50