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Hiring in Algeria? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Algeria.
Employment Norms in Algeria
Algeria is a popular destination for talent owing to its place as a top producer of oil and gas. This makes the country a viable choice for business expansion. Algeria has strict labor laws to ensure the welfare of employees. The tax structure and legal framework may seem difficult to navigate for new businesses. It is beneficial to utilize EOR services that ensure legal compliance and help greatly in managing employees.
General Information:
- The Algerian currency is the Algerian dinar (DZD).
- Algiers is the capital of Algeria.
- Arabic is the official language of Algeria. Tamazight (Berber) is also recognized as the national language. French is also widely spoken; although it doesn't have any official status. Documents are written in Arabic.
- As of 2022, the GDP of Algeria was reported to be 601.61 billion USD.
Algeria has Labor codes and laws that all employers and employees must adhere to while negotiating contracts and agreements. These must be strictly followed.
Table of Contents
- Agreements
- Onboarding Process
- Visa
- Minimum Wage
- Payroll Cycle
- Annual Bonus
- Health Benefits
- Working Hours and Overtime
- Leaves
- Social Security
- Taxes for Employers
- Taxes for Employees
- Probation
- Termination
- Severance Pay
- Employees or Contractors
- Final Words
AgreementsOnboarding ProcessVisaMinimum WagePayroll CycleAnnual BonusHealth BenefitsWorking Hours and OvertimeLeavesSocial SecurityTaxes for EmployersTaxes for EmployeesProbationTerminationSeverance PayEmployees or ContractorsFinal Words
Agreements
- Agreements in Algeria can be verbal or written. However, written agreements are strongly advised for both parties.
- Algerian employees can either negotiate collective bargaining agreements by themselves or through unions and such organizations.
- The contracts determine the period of employment, post which the contract must be renewed as and if required.
- Almost 80% of the Algerian population speaks Arabic (which is the official language) in which contracts are drafted.
Some points to consider while drafting contracts:
- Termination grounds and reasonable notice periods must be acceptable to both parties.
- Algeria has strict laws on health and safety and the handling of dangerous materials being one of the largest producers of oil and gas. These protocols must be considered for certain professions.
Onboarding Process
Here's an overview of the employee onboarding process in Algeria:
- Employers are required to give their workers a written contract that mentions the terms of their employment, such as working hours, pay, and job responsibilities.
- Employers must also give employees a certificate of employment within the first two weeks of starting work.
- Employees are asked to submit a copy of their national ID card, a photo of the size of a passport, and a certificate of good conduct.
- Employers should also tell new hires about their benefits and rights, like paid time off and health insurance.
- For best practice, it is recommended that employers give the new hires a thorough orientation so they can learn about the company's policies and procedures.
Visa
Algeria offers different types of visas based on the nature of work. It must be noted that the following are mainly for Indonesia, Brunei, and Singapore. For other countries, the visa requirements vary.
- Business Visa: A stamped or legalized invitation letter by the local mayor's office or a sponsor letter from a local company is required for a business visa. In addition to this, a hotel reservation, an account statement, and travel insurance are also required.
- Work Visa: Foreign nationals who hold a Provisional Work Authorization (APT) approved by the services in charge of employment in Algeria are issued a work permit. The employer must also issue a certificate undertaking full financial responsibility for the employee's repatriation upon the end of the work contract period.
- Temporary work visa: This visa is valid for not more than 90 days. The employer must also issue a certificate undertaking full financial responsibility for the repatriation of the employee upon the end of the work contract period. Upon this, a work permit is granted.
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Minimum Wage
The minimum monthly wage in Algeria is DZD 20,000.00 (approximately 145 USD).
Payroll Cycle
The payroll cycle in Algeria is typically monthly. Employers have to pay their workers regularly, as stated in their contract or as required by local laws.
Annual Bonus
In Algeria, there is no mandatory annual bonus for employees.
Health Benefits
Algerian employees who come under the Social Security scheme are entitled to Public Health insurance. Some companies may opt to provide private health insurance as well.
Health benefits covered are as follows:
- Health insurance provided by an employer (public or private)
- Paid time off for medical appointments
- Disability insurance (for certain professions)
Working Hours and Overtime
- Working Hours: The average work week in Algeria is 40 hours, which is usually spread out over 5 days.
- Break: Employees are allowed a one-hour break in the middle of their work day.
- Overtime: The law states that no employee may be compelled to work more than eight hours of overtime per week. For any overtime worked, employees are entitled to receive additional compensation equivalent to at least 50% of their regular hourly rate.
Leaves
In Algeria, employees are entitled to various types of leaves as stated below.
Sick Leaves
- Algeria does not have a maximum limit of days for sick leave. The employee will receive a 100% salary for the first 6 weeks of sick leave. After that, the health insurance company is to cover the leave.
Maternity leave:
- Female employees are entitled to 14 weeks of paid maternity leave.
Paternity leave:
- Male employees can take 3 days of paternity leave upon notifying their employer 10 days before taking the leave.
Annual leaves:
- Employees are entitled to take 30 days of annual leave. The number of leaves increases to 40 if they are working in the southern provinces of Algeria.
Others Leaves
- Hajj leaves: Once in their entire career the employees are allowed to take 30 days' leave to perform Hajj.
- General leaves: Employees can take three days' leave in case there is a childbirth, marriage, child circumcision marriage of their grandchild or child, or death of their spouse or close relative.
Public Holidays (for the Calendar year 2023)
A few of the following dates may vary according to the traditional calendar.
- New Year's Day (January 1)
- Berber New Year (January 12)
- Eid al-Fitr (April 22) Tentative
- Eid al-Fitr Holiday (April 23) Tentative
- May Day (May 1)
- Eid al-Adha (June 29) Tentative
- Eid al-Adha (June 30) Tentative
- Independence Day (July 5)
- Muharram (July 19)
- Day of Ashura (July 28)
- The Prophet's Birthday (September-27)
- Anniversary of the Revolution (November 1)
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Taxes for Employers
The tax breakdown for employers in Algeria is as follows:
- 26% of the employee's gross salary towards social security tax (employer's contribution)
- 0-2% payroll taxes on all employee wages (applicable in certain sectors)
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Taxes for Employees
In Algeria, the following are among the taxes that workers must pay:
Income Tax: Employees pay a progressive tax rate of 0% to 35% on their income (as of 2022).
- Less than 240,000 - 0%
- 240,001 to 480,000 - 23%
- 480,001 to 960,000 - 27%
- 960,001 to 1,920,000 - 30%
- 1,920,001 to 3,840,000 - 33%
- Above 3,840,001 - 35%
Employees typically pay 9% of their wage towards social security tax.
Probation
Probation periods range from six to twelve (for senior positions) months in Algeria. The duration of probation for general staff is 6 months and 12 months for the employees on managerial position.
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Termination
- The termination laws in Algeria are strict and wrongful termination can lead to fines.
- An employee can be fired under a variety of circumstances, such as performance issues, violation of company policies, end of a contract or project, mutual, agreement, or redundancy of the job.
- The notice period is negotiated in the contract. Generally, the notice period is up to six months additionally considering five days per year worked.
- The employer must have a valid reason for terminating the employee and follow the labor laws for the notice period and severance pay.
Severance Pay
- Employees are entitled to receive a severance package in cases of liquidation or job redundancy. The severance pay in this case is generally equal to three months' salary.
- Employers may face legal charges for terminating employees without a valid cause or proper notice.
- For mutual termination, the severance pay is as negotiated in the agreement.
- In case of a serious breach of terms or serious fault, the employer can terminate the employee without any severance pay.
Employees or Contractors
- In Algeria, employees and contractors are defined differently under the law.
- Employees are those who have various benefits under social security laws as well as other benefits provided by the employer. The employer is also required to withhold and pay the taxes of the employees.
- Contractors are hired on a project-to-project basis and do not enjoy the benefits that full-time employees enjoy. They are responsible for filing their respective taxes.
- Employees are more expensive and liable to taxes. Misclassification of employees or contractors would result in heavy fines or even investigations of the employer.
Final Words
Algeria is one of the top producers of oil and gas and has also updated its sustainability goals in the past few years. The people of this country are constantly looking to improve existing infrastructure and incorporate the latest technologies. All these, in addition to Algeria's low overhead costs, can make Algeria a viable destination for business expansion.
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