Gratuity and the 2028 income tax
Will my end of service gratuity be taxed when personal income tax starts?
The situation
EY lists pensions and end of service gratuities among income sources under the Personal Income Tax Law from 2028.
The law
- Personal Income Tax Law, Royal Decree 56/2025 (rate and threshold): 5 percent on income above OMR 42,000 a year; residents taxed on worldwide income after 183 days
What it means for you
Gratuity received in 2028 or later may count toward the OMR 42,000 threshold. A large gratuity in one year could push income above it. Check the executive regulation for detail on timing and any relief.
What to do
- Estimate the gratuity you may receive after 2027.
- Add it to other income for the threshold test.
- Check the executive regulation.
- Plan the timing of exit with advice.
We can do this for youEnd of service gratuity for non-Omani staff: OMR 50