For foreign employers, Egypt Employers of Record (EORs) play a crucial role in recruiting skilled personnel in Egypt. These specialized employment and recruitment specialists possess the knowledge and expertise to navigate the hiring process efficiently. EORs also provide guidance on employment agreements and ensure compliance with local labor regulations, mitigating legal risks for businesses. Collaborating with an Egypt-based EOR enables companies to leverage the latter’s expertise in the domestic market, benefiting from streamlined HR procedures and acquiring the right talent.

Partnering with an Egypt Employer of Record (EOR) or Professional Employer Organization (PEO) helps employers hire from Egypt without a local entity. The experts from your EOR partner will also ensure you are compliant with local employment laws.

This is because Egypt’s employment laws have certain unique features that are different to your home country. For example, Severance pay is a must, if employees are terminated without a just cause. Moreover,  Egypt recognizes Islamic holidays, and these play a role in the working calendar. For example, during the month of Ramadan, working hours are reduced. Another point of concern would be trade unions. Historically, trade unions in Egypt were state-controlled. However, recent reforms and events have pushed for more independent labor movements. There are still regulations around forming or joining unions, and the process can be bureaucratic.

An Egypt EOR/PEO’s extensive understanding of the local market, including labor practices and cultural nuances, ensure HR processes are streamlined, and payroll, tax compliance, and benefits administration, are taken care of.

The cost of Egypt EOR/PEO services  differ based on various factors, such as the number of employees, the extent of services needed, and the intricacy of the project. The pricing structure for Egypt EOR/PEO services usually involves a monthly fee per employee or a percentage of the employee's salary. Extra charges may apply for additional services or customization.

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Key Metrics For Foreign Employers 

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With a demographic dividend characterized by a high proportion of young individuals, Egypt benefits from a productive labor market. 

The table below depicts key indicators from the Global Talent Competitiveness Report for employers wishing to hire from Egypt.

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Source: The Global Talent Competitiveness Index 2023

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Through the Gloroots’ Recrew platform, you can discover amazing talent in Egypt.

The term "misclassification of employees" refers to the inaccurate classification of workers by their employers. Misclassification occurs when an employer categorizes a worker as an independent contractor or exempts them from certain employment laws and benefits, even if the worker should be classified as an employee and entitled to legal protections, benefits, and rights.

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Utilizing a PEO/EOR in Egypt  helps mitigate the risks associated with misclassification by ensuring compliance with labor laws, proper employee classification, accurate payroll processing, and access to comprehensive benefits. This enables businesses to focus on their core operations while entrusting employment-related responsibilities to experienced professionals.

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The Labor Law of 2003 in Egypt outlines robust measures to safeguard the rights of employees and ensure a fair working environment for the country's workforce, which consists of approximately 29 million individuals. The law provides strong provisions to protect employees from various forms of discrimination, including age, religion, gender expression, and race.

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Employment contracts

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Employment contracts in Egypt can be established for a specific or indefinite period, or for the duration of a particular project or task. Regardless of the contract's duration, written documentation is mandatory. 

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The employment contract is written in Arabic, and the employer is responsible for providing three copies: one for the company's records, one for the employee, and one for the social security authority.

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This contract typically includes: 

•  Identification of both parties
•  Start date of employment (and duration for temporary contracts)
• Work locations
• Clear job description
• Salary and other compensation in Euros
• Working hours
• Total number of holidays
• Notice periods for termination

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It's important for employers to understand the intricacies of these programs before making a hire. This might sound overwhelming, but it doesn't have to be. A solution like Gloroots eliminates the barriers for you. With Gloroots' Employer of Record offering, hiring and managing employees globally is a piece of cake.

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Get an overview of what you need to know when hiring in Egypt. Contact us.

Working hours

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The standard working week in Egypt consists of 8 hours a day and 40 hours a week.

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Overtime

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The law mandates overtime compensation, which varies based on the time of day and day of the week. 

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During regular working days, employees who work overtime should receive a 35% wage supplement for each additional hour worked. For overtime during nighttime hours, the minimum compensation should be at least 70% higher. 

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Additionally, employees working on public holidays are entitled to double pay.

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Minimum Wage

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As of February 2023, the minimum wage in Egypt is set at EGP 3000 per month.

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Sick Pay

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In Egypt, employees who are unable to work due to illness or injury are eligible for paid sick leave. The maximum duration of sick leave is 180 days per year, during which time the employee is safeguarded from termination and receives sick pay from social security.

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In the first three months of sick leave, employees receive sick pay equal to 75% of their social security salary, determined by certain criteria. After this initial period, the sick pay rate rises to 85%. To claim sickness benefits, employees must provide a medical certificate.

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Annual Leave

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For employers in Egypt, it's important to know that your employees are entitled to 21 days of paid annual leave if they've been with your company for at least six consecutive months. However, if an employee has completed ten years of continuous employment or is over 50 years old, their paid annual leave increases to 30 days. This is a legal requirement you should be aware of when managing your workforce.      

Maternity Leave 

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Female employees in Egypt who have worked continuously for ten months are eligible for 90 days of paid maternity leave, with an additional 45 days after giving birth. They can take two separate maternity leave periods during their entire employment. When they come back to work, these women have the right to two thirty-minute nursing breaks each day or can combine them into one-hour breaks for up to two years following the baby's birth.

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Paternity Leave

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The law doesn't include any regulations or provisions related to paternity leave.

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Employer contribution

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Employer Payroll Contributions

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Employee contribution

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Employee Payroll Contributions

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INCOME TAX

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Termination Process

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In Egypt, an employee can only be terminated on expiration of their contract  or for reasons such as dishonesty, negligence, fraud, or work-related offenses. Unfair termination entitles the employee to compensation proportional to their length of service.

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Notice Period

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Notice periods in Egypt depend on the duration of an employee's tenure with the employer. It ranges from two months for employees with less than 10 years of service to three months for longer tenures.

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Severance Pay

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Severance payments are not mandatory under Egyptian labor law, except in cases of unfair termination. 

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If an employer terminates an indefinite contract without just cause, the employee is entitled to two months' pay for each year worked. 

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In the case of unfair termination of definite term contracts before their expiration, the employee is entitled to receive the remaining pay as stipulated in the contract.

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Probation periods

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Probation periods can last up to three months.

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When hiring globally, ensuring compliance comes with its own set of battles. Employers must ensure all hiring and onboarding activities adhere to employment laws, payroll procedures, DE&I compliance, GDPR and similar data protection, etc. If you think it is hard to set up local entities and start hiring, keeping up with a dynamic compliance landscape is far harder. 

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Gloroots helps you minimize all these efforts by providing a single window to manage all these tasks. Our in-house experts fully shield you from cross-border employment and payroll compliance risks. We do this by helping you with generating employment contracts, on-time payments, compliant benefits, while you focus only on screening talent. 

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Our promise is a stress-free global employment experience for both you and your employee.

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Contact our experts today to kickstart your global hiring campaign.

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Growing a team means hiring the right employees at the right time and for the appropriate positions. Employers in Egypt must have a local legal organization and utilize local resources to handle compliance, payroll, tax, and benefits management. The complexity of employment regulations in Egypt makes compliance with employment laws demanding.

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With Gloroots' global Employer of Record (EoR) service, you can let Gloroots handle the heavy lifting of payroll, tax, benefits, and compliance, allowing you to concentrate on what matters most: your employees and company growth.