Employer of Record (EOR) in Egypt

G-P provides employer of record services for customers that want to hire employees and run payroll without first establishing a branch office or subsidiary in Egypt. Your candidate is hired via G-P’ Egypt PEO in accordance with local labor laws and can be onboarded in days instead of the months it typically takes. The individual is assigned to work on your team, working on your company’s behalf exactly as if he or she were your employee to fulfill your in-country requirements.

Our solution enables customers to run payroll in Egypt while HR services, tax, and compliance management matters are lifted from their shoulders onto ours. As a Global PEO expert, we manage employment contract best practices, statutory and market norm benefits, and employee expenses, as well as severance and termination if required. We also keep you apprised of changes to local employment laws in Egypt.

Your new employee is productive sooner, has a better hiring experience and is 100% dedicated to your team. You’ll have peace of mind knowing you have a team of dedicated employment experts assisting with every hire. G-P allows you to harness the talent of the brightest people in more than 185 countries around the world, quickly and painlessly.

Egypt is in northeast Africa with a small portion of the country on the Asian continent. The country borders the Mediterranean Sea and the Red Sea and controls the Suez Canal. The famed Nile river cuts vertically across Egypt, flowing towards the Mediterranean. Because the vast majority of Egypt’s territory is desert, 96% of the population of 100 million lives either along the Nile or in the Nile Delta. Egypt’s GDP is USD 303 billion and growing at 5.5% annually. The unemployment rate is 12.7%. Egypt’s major exports are oil, chemicals, agricultural products, livestock, and textiles.

When negotiating terms of an employment contract and offer letter with an employee in Egypt, it may be useful to keep the following in mind:

Employment Contracts in Egypt

Fixed-term contracts are allowed for up to 5  years. Employees who continue to work after 5 years will be considered to have indefinite term contracts.

It is legally required to put a written employment contract in place in Egypt, in triplicate and in Arabic. The contract should spell out the terms of the employee’s compensation, benefits, and termination requirements. An offer letter and employment contract in Egypt should always state the salary and any compensation amounts in Egyptian pounds rather than a foreign currency.

Working Hours in Egypt

In general the work week is 40 hours from Sunday through Thursday.

Holidays in Egypt

Egypt celebrates 12 national holidays:

• Coptic Christmas Day
• Revolution Day
• Sinai Liberation Day
• Coptic Easter
• Labour Day
• Sham el Messim
• Eid Al Fitr
• National Day
• Eid Al Adha
• Al Hijra
• Armed Forces Day
• Milad Un Nabi

Vacation Days in Egypt

Employees are generally entitled to 21 days of annual paid leave, once they have worked for 6 months. After 10 years of service, or on reaching the age of 50, they are entitled to a month of paid leave.

Employees who have worked for a consecutive 5 years are generally eligible for a one-time, one month’s paid leave for a religious pilgrimage.

Egypt Sick Leave

Employees are generally entitled to up to 6 months of sick leave to be paid at between 75% and 100% of the employee’s regular wage.

Maternity/Paternity Leave in Egypt

Female employees are generally entitled to 90 days of paid maternity leave. Under most contracts, women are only eligible for maternity leave twice within 5 years.

Health Insurance in Egypt

Private companies must provide free health care for Egyptian employees through the Medical Insurance Plan of the Ministry of Social Insurance or privately.

Bonuses

Annual bonuses are common in Egypt.

Termination/Severance in Egypt

Probation periods may not exceed three months and may not be renewed.

An employer who wishes to terminate an employee must go before a committee with judicial powers at the Ministry of Manpower and Migration. The committee has 15 days to decide whether to grant the request. The employer may then dismiss the employee, who retains the right to challenge the dismissal in court.

Employees with less than 10 years of service are entitled to 60 days’ notice of termination. After 10 years, the employee is entitled to 90 days’ notice.

Paying Taxes in Egypt

Employee income tax is imposed on the total net income inside and outside of Egypt for resident individuals whose centre of commercial, industrial, or professional activities is in Egypt. Also, tax is imposed on the income of non-resident individuals for their income earned in Egypt. The annual salary tax exemption is EGP 9,000.00.

The salary on which social insurance shares are calculated is capped at a Maximum salary of EGP 10,900 and a minimum of 1,700 and they increase each year by 15%.

New Social Insurance Amounts effective 1st Jan 2023:

• Basic social insurance and Variable have been combined to be only one Social Insurance salary
• The new percentage to apply for the Employee Share is 11%
• The new percentage to apply for the Employer Share is 18.75%
• The new percentage to apply for the BOD is 21%
• ER Fund – Base salary is 1% (Maximum Base salary is 2,210 EGP for 2023)

This information is provided as generally accepted information and is not intended as advisory services.

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