An Employer of Record (EOR) in Egypt is a company that takes on the responsibility of being the legal employer for a worker. This includes managing payroll, benefits, and other employment-related tasks on behalf of the worker's actual employer.
An employer of record in Egypt assist you with the following
- Draft local employment contracts
- Register employees with the social security agencies
- Withholding taxes
- Provide Benefits
- Comply with the local labor laws in Egypt
- End-to-End Payroll
- Work Permit
- Hiring and Payments
Discover the key considerations and essential details you should be aware of before opting for an Employer of Record (EOR) in Egypt to help you with your global staffing needs.
Employment Contracts in Egypt
In Egypt, employment contracts must be written in Arabic and produced in triplicate, with each party receiving a copy. There are two types of contracts: definite and indefinite. Definite contracts end without formalities or compensation when the specified term is up, unless renewed. Indefinite contracts require notice and potential compensation for termination. These rules provide clarity and structure for both employers and employees in Egypt.
Definite Contracts:
- Have a clear duration, explicitly stated or implied.
- Automatically renew if both parties continue fulfilling their obligations.
- Can be explicitly renewed for one or more periods by mutual agreement.
- Workers can terminate contracts extending beyond 5 years with 3 months' notice.
Indefinite Contracts:
- Require valid reasons for termination with notice periods.
- Employers must provide 2-3 months' notice based on employee tenure.
- During the notice period, employees can seek other work and receive full pay.
- Employers must pay equivalent wages if they terminate without notice.
- Termination reasons include false identity, errors, safety negligence, and more.
- Employees can terminate for employer breaches or hostile acts.
- Court-ordered compensation is possible for indirect contract termination.
Minimum Wages
As of 2023, the minimum wage in Egypt is 3,000 EGP per month, which is equivalent to 97.10 USD.
In 2024, the minimum wage in Egypt will be revised 3,600 EGP per month, which is equivalent to 111.64 USD.
Payroll Cycle
In Egypt, payroll is typically processed monthly and salary is paid on the last day of the month.
Probation Period
The probation period in Egypt is 3 months. An employee can be put on probation only once by the employer. It is a general practice to include these terms and conditions into employment agreements.
Working Hours
The standard working hours are 8 per week and 48 per week.
Overtime Pay
Overtime pay for the day shift is 35% and night shift is 70% of the normal pay.
13th Month Salary
It is not mandatory to pay a 13th month salary as per the law.
Social Security in Egypt
The Ministry of Social Solidarity (MoSS) and the National Organization for Social Insurance (NOSI) are important organizations in Egypt's social protection and insurance system, each with its unique roles and contributions to the country's welfare.
Egypt implemented universal health insurance coverage in 2018. This is to ensure every citizen in the country gains access to health insurance by 2032. Social security contributions and the new taxes support the funding needs.
Social Insurance Salary in Egypt
Social insurance salary is the threshold amount to calculate the social security contributions. The employee’s salary is capped at a threshold to calculate the contributions. The minimum and maximum thresholds are 1,700 and 10,900 per month as of Jan 2023.
The minimum and maximum thresholds are 2,000 and 12,600 per month in 2024.
Social Security Contributions in Egypt
Egypt's social security contributions vary for the Egyptians and the foreigners.
- Egyptian Citizens: The employer and employee contributions are 18.75% and 11% of the social insurance salary.
- Foreign Nationals: The employer and employee contributions are 18.75% and 11.5% of the social insurance salary.
There are exceptions for a few countries with a totalisation agreement in place with Egypt. It is not needed for foreign nationals from those countries to contribute to Egypt.
Employer Payroll Contributions in Egypt
| Employers | % of Gross Salary |
| Social Security Insurance | 18.75% (of social insurance salary) |
| Unemployment | 1% |
| Total Employment Cost | 19.75% |
Employee Payroll Contributions in Egypt
| Employees | % of Gross Salary |
| Social Security Insurance | 11% (of social insurance salary) |
| Total Employee Cost | 11% |
Personal Income Tax in Egypt - From Nov 2023
Egypt employs a progressive tax system where individuals are taxed based on their total annual taxable income. The tax rates increase as income levels rise, ensuring higher-income individuals contribute a larger percentage of their earnings to taxation.
Egypt’s Ministry of Finance recently announced changes to Egypt personal income tax and the following rates are effective from Nov 2023.
| Income Range | Tax Rate (%) |
|---|---|
| Up to 30,000 EGP | 0% |
| >30,000 to 45,000 EGP | 10% |
| >45,000 to 60,000 EGP | 15% |
| >60,000 to 200,000 EGP | 20% |
| >200,000 to 400,000 EGP | 22.50% |
| Exceeding 400,000 EGP up to 1,200,000 | 25% |
| Exceeding 1,200,000 EGP | 27.50% |
Personal Income Tax in Egypt before July 01, 2023 to October 31, 2023
| Earned income (EGP*) | Tax rate on bracket (%) |
|---|---|
| From 0 to 21,000 | 0 |
| >21,000 to 30,000 | 2.5 |
| >30,000 to 45,000 | 10.0 |
| >45,000 to 60,000 | 15.0 |
| >60,000 to 200,000 | 20.0 |
| >200,000 to 400,000 | 22.5 |
| >400,000 | 25.0 |
| >1,200,000 | 27.5 |
Termination and Notice Period
The notice period to terminate an employee is decided based on the employee’s tenure. It is 2 months if the employee tenure is less than 10 years and 3 months if the tenure is more than 10 years.
Severance Pay
Severance pay in Egypt is as below in case of unfair dismissal
- Indefinite Contracts: Employers must compensate the employees with 2 month’s salary for each year of service.
- Fixed-term Contracts: Employers must compensate the employees with the pay for the balance contract duration.
Employees vs Independent Contractor Compliance in Egypt
Employers in Egypt are required to classify the workers appropriately to avoid misclassification penalty. The classification is based on the below
- Employees are covered under Egyptian social security and labor laws. They are entitled to certain benefits, such as minimum wage, overtime pay, paid vacation, and paid sick leave. Employees are hired to perform a task and are subject to the employer’s control.
- Contractors are not covered under Egyptian social security and labor laws. They are not entitled to certain benefits, such as minimum wage, overtime pay, paid vacation, and paid sick leave. Contractors are hired to perform a task and are flexible to work on their own terms as discussed prior to the engagement.
Employee Benefits in Egypt
Annual Leave
- Employees who have completed one year in a company are eligible to avail 21 days of annual leave.
- Employees who have completed 10 years in a company are eligible to avail 30 days of annual leave.
Maternity Leave
Female employees can avail a total of 90 days including a period before and after delivery. The eligibility criteria includes
- Employee who have completed 10 months in current company or previous company
- Employees paid for social insurance from the past 10 months.
- Employees who have not availed 2 maternity leaves throughout their employment service.
Sick Leave
Employees will be paid 75% of their pay during the first 90 days and 85% during the next 90 days of sick leave. Employees need to submit the medical certificate to the employer as per the law.
Unemployment Insurance
Egypt unemployment insurance is based on the duration of an employee's association with the company. Employees who contributed to social security for at least one year can avail the unemployment benefits.
- Employees who served the company less than 36 months are entitled to receive insurance for 12 weeks.
- Employees who served the company more than 36 months are entitled to receive insurance for 28 weeks.
Egypt Overview
| Overview | |
| Continent | Africas |
| Country | Egypt |
| Capital | Cairo |
| Time zone | UTC+02:00 (EET) |
| Total Time zones | 1 |
| Working hours per week | 40 (30 during Ramadan) |
| Working week | Sunday–Thursday |
| Typical hours worked | 8 (6 during Ramadan) |
| Personal Tax filing deadline | 31st Mar |
| Financial Year | 1 July – 30 June |
| Date format | dd/mm/yyyy |
| Currency | Egyptian Pound (EGP) |
| VAT | the standard rate is 14% |
International employment in Egypt involves dealing with intricate Egyptian labor laws and regulations. An Employer of Record (EOR) can streamline these complexities, enabling you to concentrate on your core business operations. With a deep understanding of Egyptian employment regulations and a dedication to smooth processes, EOR services ensure you maintain compliance and operational efficiency. Take the next step towards a successful presence in Egypt by exploring EOR solutions customized to your unique requirements and enjoy the advantages of hassle-free international employment.