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Hiring in Egypt? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Egypt.
Employment Norms in Egypt
Egypt, located in Northeast Africa, is a country with a rich history and a bustling economy. It is the most populous country in the Arab world, with a population of over 100 million people. The country's official language is Arabic, and the currency used is the Egyptian pound. In recent years, Egypt has made significant progress in its efforts to attract foreign investment and expand its economy, making it an attractive destination for businesses looking to expand into new markets.
Egypt's labor laws and regulations include provisions for sick and parental leaves, annual leave, and termination, along with regulations for employment classification and social security. The key laws are the Egyptian Labor Law No. 12 of 2003, Social Insurance Law No. 79 of 1975, and the Egyptian Constitution of 2014.
General Information:
- The currency used in Egypt is the Egyptian pound, EGP.
- Cairo is the capital of Egypt.
- Arabic is the official language of Egypt, and legal documents can be drafted in Arabic to be considered legally valid.
- In 2022, the GDP of Egypt was reported to be 2010.05 billion USD.
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
- Labor laws and regulations in Egypt are governed by Egyptian Labor Law no. 12 of 2003, which outlines the rights and responsibilities of employers and employees in the country.
- Employers are required to provide their employees with a written employment contract that specifies the terms and conditions of their employment, including the length of the contract, working hours, and compensation.
- Arabic is the official language of Egypt, hence any document submitted to the appropriate court for a judgment on a subject in a language other than Arabic must be translated into Arabic.
- The minimum period of notice that must be given by an employer before terminating an employment contract is one month unless the contract specifies otherwise.
Onboarding Process
- In Egypt, the employee onboarding process typically starts with the signing of an employment contract.
- Employers are required to provide new hires with a copy of their employment contract, as well as any other mandatory documents, such as proof of identity, residency, and social security.
- There are no specific laws governing the onboarding process in Egypt, so employers should consult with legal advisors to ensure that their onboarding processes comply with relevant regulations and best practices.
Visa
Egypt has several types of work visas and permits available for foreign nationals looking to work in the country. The most common type is the:
- Work Visa: This allows an individual to work for a specific company or organization in Egypt.
- Freelance Visa: This is suitable for self-employed individuals working in fields such as journalism, consulting, or other creative industries.
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Minimum Wage
The minimum wage in Egypt for the year 2023 is EGP 2700.
Payroll Cycle
The payroll cycle in Egypt is typically monthly, with paychecks being issued to employees on the last day of the month. However, the specific payroll cycle will depend on the employer and may be subject to negotiation with employees.
Annual Bonus
In Egypt, there is no specific provision regarding the annual bonus for employees. However, it is common for companies to offer an annual bonus as a part of their employee benefits package, which may vary from company to company.
Health Benefits
- Employers may provide health insurance coverage for their employees.
- Employers may also provide other benefits such as dental insurance, vision insurance, and life insurance.
- There are no specific laws in Egypt regarding health benefits provided by employers to employees, but it is a common practice in the country.
Working Hours and Overtime
- Work hours:The standard workweek in Egypt is 40 hours per week and 8 hours per day. The employee works from Sunday to Thursday.
- Break: Employees are allowed a one-hour break during the workday.
- Overtime: Overtime is allowed and the payment is made as per the overtime period. For eg: 135% of the regular working hours is paid if you have worked in the daylight. 170% of the hourly wage is paid if you worked at night time and if you worked on public holidays and rest days then 200% of the regular hourly wage will be paid to you.
Leaves
Sick Leave
- Under the labor law in Egypt, employees are allowed paid sick leave in case of illness or injury.
- Employees can avail of sick leave of up to one year. This leave is paid differently by the different payers.
Parental leaves
- No parental leaves are allowed in Egypt
Maternity and Paternity Leave:
- A pregnant woman who has worked consecutively for 10 months can avail of the paid leaves of 90 days. They will get 100% salary during this time which is a maximum of EGP 10,900, paid from Social Security.
- No paternity leave is granted to male employees for now in Egypt.
Annual leaves
- In Egypt, employees are allowed a minimum of 21 days of paid annual leave, after continuously working for the employer for six months.
Study leaves
- Egyptian lay of labor says that employers should honor the agreements related to leaves taken for studies during collective bargaining. Though the circumstances and duration are not mentioned.
Other leaves
- Adoption Leave: Parents can take adoption leave of 15 days from the day they receive legal custody of their child.
- Pilgrimage Leave: During the entire tenure of the job and after spending a total of five years with the same employer, employees are entitled to avail of the pilgrimage leave of one month. This is the fully paid leaves.
- Casual Leave: Casual leaves can be taken by the employees in two installments. There is a total of 6 casual leaves that will be deducted from the annual leaves of the employee.
Public Holidays (for the Calendar year 2023)
- Coptic Christmas Day (7th January)
- 25 January Revolution Day (25th January)
- Coptic Easter Sunday (16th April)
- Sham El Nessim - (17th April)
- Eid-al-Fitr (21st April)
- Eid-al-Fitr Holiday (22nd April)
- Sinai Liberation Day (25th April)
- Labor Day (1st May)
- Arafat Day (27th June)
- Eid al-Adha (28th June)
- Eid al-Adha Holiday (29th June)
- 30 June Revolution Day (30th June)
- Islamic New Year (19th July)
- Revolution Day (23rd July)
- Prophet Muhammad's Birthday (27th September)
- Armed Forces Day (6th October)
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Taxes for Employers
The cost of the employer is estimated as 19.75% of the salary of the employee:
- Social security is 18.75%
- Contribution to unemployment benefits is 1.0%
The percentage mentioned above may vary as the cost of some employer have limits.
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Taxes for Employees
The employee has to make an 11% contribution to social security
Probation
The probation period in Egypt is typically between one to three months, during which time the employer can assess the employee's performance and decide if they will be offered a permanent contract
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Termination
In Egypt, either the employer or the employee can terminate the employment contract, provided that certain conditions are met. Some common reasons for termination include poor performance, violation of company policies, and mutual agreement by the employee or if the tenure of the contract is over. Unfairly terminated employees are entitled to receive compensation.
Severance Pay
An employee who has been terminated is eligible for severance pay if they have been employed for at least one year. The amount of severance pay is calculated based on the employee's length of service and their last monthly salary.
Employees or Contractors
Employees and contractors are defined differently under labor laws. An employee is defined as a person who is hired for a salary and works under the control of an employer, who manages their work and pays them a regular salary. On the other hand, a contractor is considered an independent business owner who provides services to a company under a contract and is responsible for their taxes and insurance.
Misclassifying an employee as a contractor is illegal and can result in penalties for the employer. The penalties can include fines, back pay for the employee, and legal fees. The reverse, where an employer tries to classify a contractor as an employee, can also result in penalties if the individual is found to be an independent contractor under the legal definition. Both the employer and the worker need to understand the legal definitions and ensure they are correctly classified.
Final Words
Employment laws in Egypt are designed to protect the rights of workers and provide a secure working environment. Provisions for sick leaves, parental leaves, annual leaves, and public holidays ensure that employees can take time off when necessary. Additionally, employees in Egypt are required to pay various taxes, and there are provisions in place for social security, probation periods, termination, severance pay, and classifying employees and contractors. Overall, Egypt provides a supportive environment for employees, while also maintaining a fair and efficient system of employment norms.
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