Employer of Record in Egypt

Employment Laws and Regulations in Egypt

Employment Contracts

Employment relationships in Egypt are governed by Labour Law No. 14 of 2025, which took effect on 1 September 2025. The Ministry of Manpower (Wazarat al-Quwwat al-Amilah) is the primary regulator, and the Egyptian Social Insurance Organization administers social security. Written contracts are mandatory for all employment relationships of more than one month, and the working language for employment documentation is Arabic. Where an employee does not speak Arabic, a translation may be provided in addition to the Arabic original.

Contracts can be fixed-term (muddat muhadduda) or indefinite (muddat ghayr muhadduda). A fixed-term contract may not exceed a specified duration without renewal. Every contract must specify the job title, salary, probation period, place of work, and start date, in compliance with Articles 42 and 43 of the Labour Law.

Working Hours and Overtime

The standard workweek in Egypt is 48 hours maximum, typically arranged as eight hours per day over six days, though many employers implement a 40-hour five-day week. Article 117 of Labour Law No. 14 of 2025 caps the legal workday at eight hours and requires mandatory rest periods between shifts and at least one full rest day per week.

Under Article 121, overtime is compensated at a premium over the regular hourly wage. Daytime overtime is paid at +35% (135% of the regular hourly wage), and nighttime overtime is paid at +70% (170% of the regular hourly wage). Work on a rest day or public holiday triggers an additional day’s wage plus a compensatory rest day that must be granted within the following week. Total workplace presence cannot exceed 12 hours per day.

Minimum Wage

The statutory minimum wage in Egypt (al-Hadd al-Adna lil-Ajur) for the private sector is approximately $132 per month, effective 1 March 2025 (Egyptian Cabinet announcement). In April 2026, the Cabinet announced an increase to approximately $150 per month effective 1 July 2026. All USD figures reflect the April 2026 exchange rate. The minimum wage applies to the formal private sector. Sector-specific collective agreements (notably in banking, telecommunications, and manufacturing) may set higher floor wages. See our minimum wage in Egypt guide.

Probation Period

The maximum probation period under Labour Law No. 14 of 2025 is three months, applied once per employee per employer. The new law abolished the ability to renew probation with the same employer. During probation either party may terminate the contract without notice, severance, or cause. Probation exits require documentation and calculation of severance for early termination without cause. Our probation period in Egypt guide covers category-specific rules and the renewal process.

Leave Entitlements

Egypt’s Labour Law No. 14 of 2025 sets statutory minimums for annual leave, sick leave, maternity leave, paternity leave, and family event leave. Most entitlements begin from the first day of employment under the new law.

Annual Leave

Employees are entitled to 15 working days of annual leave during their first year of service under Labour Law No. 14, an increase from the prior law which granted leave only after one full year. From the second year onwards, entitlement increases to 21 working days. After 10 years of continuous service, entitlement increases to 30 working days. Leave accrues during paid sick leave, and accrued but untaken leave can be carried forward by agreement or paid out on termination.

Sick Leave

The Labour Law guarantees up to 180 days of paid sick leave per year: the first 90 days paid at full salary by the employer, and the next 90 days paid at 75% of salary. A medical certificate from a licensed practitioner must be submitted for absences. Employees cannot be dismissed solely because of sickness absence unless they have exhausted paid leave and remaining annual leave. Industrial workers are entitled to special protections: one month full pay every three years of service, then eight months at 75% pay, then three months unpaid if recovery is medically possible.

Maternity Leave

Labour Law No. 14 of 2025 extends maternity leave to four months total, including time before and after childbirth, with the period after birth being not less than 45 days. This is an increase from the prior three-month entitlement. Maternity leave may be taken up to three times during a woman’s entire period of service with an employer. Importantly, under the new law, female employees are entitled to maternity leave from their first day of service, regardless of tenure (the old law required ten months of service). Pay is funded by the employer, and the employee retains her position.

Paternity Leave

Labour Law No. 14 of 2025 introduces paternity leave for the first time in Egyptian law: one fully paid day on the day of the child’s birth, up to three times during the employee’s entire period of service. This leave does not count against the employee’s annual leave balance and is not deducted from pay.

Other Statutory Leave

Family event leave covers significant life milestones:

• Marriage of the employee: three paid days.
• Death of a spouse, parent, or child: three paid days.
• Death of a sibling: one paid day.
• Emergency leave: seven paid days per year for unforeseen personal circumstances.

Statutory Employee Benefits

Egypt’s statutory benefit package is built on social insurance coverage managed by the Egyptian Social Insurance Organization. ESIO provides old-age, disability, and survivor pensions, plus occupational injury and illness coverage, and family allowances, all funded through the combined employer-employee contributions detailed in the payroll section below. Health insurance in Egypt requires both employer contributions (3.25% of the insurable wage) and employee contributions (1%), which fund access to public health services and emergency coverage. Detailed benefit categories are covered in our employee benefits in Egypt guide.

Employers must also provide a cost-of-living allowance or annual salary increment of at least 3% of the social insured salary under Article 39 of the new Labour Law. Beyond social insurance, employers in banking, telecommunications, and mining sectors commonly provide transport allowances, meal subsidies, and supplementary pensions where collective bargaining agreements require them. Housing allowances for senior-graded positions and life insurance are widely offered but remain voluntary unless mandated by sector-specific agreements.

Recent Regulatory Updates (2026)

The most significant change in 2026 is the full implementation of Labour Law No. 14 of 2025, which took effect on 1 September 2025. This law introduced maternity leave extension to four months, paternity leave of one day, increased first-year annual leave to 15 days, eliminated the minimum service requirement for maternity leave eligibility, introduced paternity leave for the first time, established emergency leave of seven days, expanded probation period limits, and modernized definitions of work arrangements (remote work, part-time, flexible, job-sharing). On the minimum wage side, the Cabinet announced in April 2026 that the private sector minimum wage will increase from approximately $132 to $150 per month effective 1 July 2026.

On the social insurance side, the minimum and maximum insurable wage ceilings increased for 2026: the minimum insurable salary is now approximately $51 per month (up from about $43), and the maximum is approximately $314 per month (up from about $273). These are adjusted annually by a 15% escalation until 2027, after which inflation-based adjustments apply.

Work Permits and Visas in Egypt

Work Permit Requirements

Who Needs a Work Permit

Every foreign national who is not an Egyptian citizen needs authorization to work in Egypt. The type of authorization depends on the employee’s nationality and the nature of the work. EU and North American citizens, as well as nationals from countries with bilateral work arrangements with Egypt, follow different pathways than other foreign nationals. Most non-citizen employees require a work permit (Tasrih Amal) issued by the Ministry of Manpower.

Eligibility and Required Documents

To qualify, the employer must demonstrate that the position requires specialized skills not readily available in the Egyptian labour market, and the foreign worker must hold qualifications matching the role. The standard dossier includes a valid passport with at least six months remaining validity, a signed employment contract, diplomas and professional certificates, a criminal record extract from the home country (apostilled or legalised by the Egyptian embassy), a recent medical certificate from an approved physician, passport photographs, and proof of payment of application fees. The employer must also submit an application letter justifying the hire and confirming compliance with Egyptian labour law.

Processing Time and Validity

The Ministry of Manpower typically issues a decision within 8-10 working days of receiving a complete dossier, though delays of 4-8 weeks can occur due to background checks or missing documents. Upon submission, the Ministry issues a receipt that functions as interim authorization, allowing the employee to commence work immediately while awaiting the final work permit. The final permit is typically valid for the duration of the employment contract, up to a maximum of two years, and is renewable.

Renewal Process

Renewals must be filed at least 30 days before the permit expires, with an updated contract, renewed medical certificate, and proof of continued employment. Employees can usually continue working during the renewal review provided the application was filed on time.

Common Visa Types for Foreign Workers

• Tourist/visit visa (30 days): for meetings or exploratory trips, issued through Egyptian embassies and the e-Visa portal. Does not authorize paid work.
• Entry visa (90 days): allows entry for the purpose of applying for a work permit and residence authorization after arrival.
• Work permit (Tasrih Amal): the standard authorization for foreign employees, issued by the Ministry of Manpower, tied to a specific employer and contract.
• Residence permit: issued by the Ministry of Interior in parallel with the work permit, typically valid for 6-12 months and renewable.
• Free zones work authorization: special permits for employees in Egypt’s Suez Canal Economic Zone and other designated free zones, with expedited processing.

How an EOR Handles Work Permits

An employer of record in Egypt can sponsor the work permit directly because it is already a registered Egyptian employer with a tax ID and social insurance account. The EOR prepares the employer justification letter, collects the employee’s documents (passport, diplomas, medical certificate, criminal record), and submits the dossier to the Ministry of Manpower. The employee is responsible for ensuring document authenticity and obtaining any required apostilles or legalizations. The EOR obtains the receipt and provides interim authorization details so the employee can commence work while the Ministry processes the final permit.

Because the work permit process adds 4-8 weeks to the timeline, onboarding for a foreign hire through an EOR typically lands at 6-10 weeks from contract signature rather than the 1-2 weeks required for a locally resident employee. The EOR can also handle the subsequent residence permit application, which is a separate step required to legalize the stay and is processed by the Ministry of Interior.

Payroll, Taxes, and Social Security in Egypt

Employer Contributions

Employers in Egypt pay social insurance contributions plus health insurance contributions. The combined employer burden is 22.25% of the insurable salary: 18.75% for social security (pension, disability, occupational accident insurance, family allowances), 3.25% for health insurance, and 0.25% for training fund contribution. Contributions are calculated on salaries within the statutory minimum (approximately $51 as of 2026) and maximum (approximately $314 as of 2026) insurable wage ceilings.

Employee Contributions

Employees in Egypt contribute 12% of gross pay to statutory schemes: 11% to social insurance (pension and survivor benefits) and 1% to health insurance. Both are withheld from the employee’s salary and remitted monthly by the employer.

Income Tax

Egypt applies a progressive personal income tax (Daribat ad-Dakhil ash-Shakhsi) on employment income. The tax is withheld monthly by the employer and calculated on net taxable income after deducting the 11% pension contribution and a personal annual exemption of approximately $376. The progressive scale runs from 0% on the lowest bracket to 27.5% on income above approximately $22,572 per year.

Thresholds are shown in USD at the April 2026 exchange rate. Bracket calculations are performed in local currency by the tax authority. The personal annual exemption of approximately $376 applies to all residents and reduces taxable income before bracket calculation.

Payroll Cycle

Payroll in Egypt is run monthly, with salaries paid in local currency by bank transfer. Cash payments above the minimum wage are discouraged by the Labour Law and Central Bank regulations, though small cash portions for meal allowances are sometimes permitted. Employers must issue a detailed pay slip showing gross pay, each contribution line, income tax withheld, and net pay, in compliance with Article 48 of the Labour Law. For detailed guidance on Egypt payroll and tax compliance, consult your payroll provider.

Social insurance contributions, income tax, and health insurance are all remitted to the Egyptian Social Insurance Organization and tax authority by the 15th of the month following payment. Annual income tax returns are due in April, and the social insurance annual declaration (to reconcile monthly payments against year-end actuals) is due in March.

13th Month Salary and Bonus Pay

A 13th month salary is not mandatory under Egypt’s Labour Law. There is no statutory obligation for employers in Egypt to provide 13th or 14th month pay. However, most employers do offer a year-end or holiday bonus as a voluntary benefit, with the amount varying based on employee performance and company policy. Where a 13th month or year-end bonus is paid, it is subject to income tax withholding and social insurance contributions under the normal monthly bracket structure. The timing and amount are left to employer discretion or collective bargaining agreements.

Cost of Hiring Through an EOR in Egypt

EOR Service Fees

Employer of record services in Egypt typically cost between $300 and $600 per employee per month, quoted as a flat fee in USD. The fee covers the employment contract, monthly payroll, social insurance and tax remittance, pay slip production, benefits administration, compliance updates, and HR support. Provider pricing depends on the complexity of the role, whether a work permit is required, and the size of the payroll.

Total Employment Cost Breakdown

The table below illustrates the total employer cost for a mid-level hire on a $1,200 gross monthly salary (see our average salary in Egypt guide for role-specific benchmarks). All amounts are shown in USD.

On a $1,200 gross salary, the 22.25% statutory employer burden (social insurance, health, and training fund) adds $267 in contributions, and the EOR service fee adds $450. Total employer cost comes to $1,917, which is about 60% above gross pay. All USD amounts are approximate conversions at the April 2026 exchange rate. Actual contributions are calculated and remitted in local currency by the EOR.

Ready to hire in Egypt? Get started with Remote People and we handle employment contracts, social insurance registration, tax withholding, and full Egypt compliance under the new Labour Law. No local entity required.

Benefits of Using an EOR in Egypt

The strongest reason companies choose an employer of record in Egypt is speed to market. Setting up a limited liability company (LLC) in Cairo typically takes two to four months once you include company registration with the Chamber of Commerce, a notarised bank deposit, social insurance affiliation, and the tax identification process. An EOR skips all of that: a compliant hire is live within 1-2 weeks, which matters when a project, client contract, or expansion timeline is already running.

Compliance is the second reason. Labour Law No. 14 of 2025 is detailed and newly in effect, with changes to maternity leave, probation, annual leave, and work arrangements that catch employers off guard. Social insurance reporting deadlines are unforgiving, and the training fund contribution is an easy compliance miss. A specialist EOR absorbs that risk: it tracks regulatory updates, files on time, and indemnifies you against mistakes in its own payroll runs. For companies running a single Egyptian hire without a dedicated in-country HR manager, this is often cheaper than the first late filing penalty or the back taxes triggered by an EOR oversight.

Beyond speed and compliance, an EOR offers predictable monthly costs in USD, ready-made access to statutory benefits, the ability to scale up or down without dissolving an entity, and local expertise on Arabic-language contracts, sector-specific collective agreements, and informal workplace practices that shape how hires actually work in Egyptian offices. Those advantages compound over the first year, and they are the reason international NGOs, technology teams, and regional operations increasingly default to the EOR model for Egypt hiring.

Termination and Offboarding in Egypt

Notice Periods

Statutory notice periods in Egypt were unified under Article 156 of Labour Law No. 14 of 2025. For indefinite-term contracts, either party (employer or employee) must give three months’ written notice, regardless of the employee’s length of service. This replaces the previous framework under the old Labour Law, which required two months’ notice for employees with less than ten years of service and three months’ notice for those with more than ten years. Fixed-term contracts under five years expire automatically at the agreed end date with no notice required (Article 154). During probation, either party may terminate the contract on the terms stated in the employment agreement; probation itself is capped at three months and is not renewable.

Severance Pay

Calculation Method

Severance pay (mukafa’a) is owed to any employee whose indefinite-term contract is terminated without just cause after at least 12 months of continuous service. Under Article 165 of Labour Law No. 14 of 2025, the formula is two months’ wages for each year of service. The “overall wage” base includes the base salary plus all usual bonuses and allowances received over the twelve months preceding termination.

Caps and Exceptions

There is no statutory ceiling on total severance under the new law. However, termination during probation (the first three months) does not trigger severance. Termination for just cause (faute lourde) also excludes severance entirely. If an indefinite-term contract is terminated by the employer before its agreed end date, the employee is entitled to one month’s salary for each year of service. Fixed-term contract terminations follow different rules: if the employer terminates early without just cause, the employee may be entitled to remaining wages through the end of the term plus statutory damages.

Grounds for Termination

The Labour Law distinguishes between termination for just cause (misconduct or serious performance failure), termination for economic reasons (business closure, redundancy, restructuring), and mutual agreement. Just-cause dismissals require documentation of the alleged misconduct and an opportunity for the employee to respond. Economic redundancies require written notice, consultation with worker representatives, and selection criteria that are transparent. Protected categories include pregnant women, employees on maternity leave, worker representatives, employees on certified sick leave, and employees with disabilities, none of whom can be dismissed without prior authorization from the labour inspector.

EOR vs. Other Hiring Models in Egypt

EOR vs. Setting Up a Local Entity

Choosing between an Employer of Record and setting up your own legal entity in Egypt comes down to timeline, upfront cost, ongoing administrative burden, and how quickly you can scale up or wind down. The table below lays out both paths side by side across setup time, cost, compliance risk, and flexibility so you can match the right model to the size and duration of your Egypt hiring plan.

An EOR is fastest and cheapest for entering Egypt with a small team. You avoid months of legal setup, notarised bank deposits, and ongoing compliance overhead. An EOR hands off all payroll, social insurance, and tax reporting to a specialist, reducing your risk of costly mistakes.

However, if you plan to hire 15 or more employees, grow a long-term presence, or bid on government contracts, incorporating your own Egyptian LLC becomes worthwhile. The upfront costs and setup time pay off over time because you own the entity, can bid for government work, and gain full control over policies and operations without paying ongoing EOR fees per employee.

EOR vs. Hiring Independent Contractors

Classifying a Egypt-based worker as an independent contractor rather than an employee can expose you to back-taxes, unpaid social contributions, and reclassification penalties if the working relationship looks like employment in practice. The table below contrasts EOR employment with contractor engagement across legal relationship, tax and benefits treatment, IP ownership, and misclassification risk so you can pick the right model role by role.

An EOR is appropriate for ongoing team roles where you need compliance protection and statutory benefits. The trade-off is that you pay full employment costs (salary plus 22.25% contributions plus EOR fee).

Independent contractors are appropriate for short-term, project-based work where the contractor has genuine autonomy and controls how they work. However, Egypt’s Labour Law has strong protections against misclassification. If the relationship looks like employment (regular hours, direct control, ongoing work, use of company resources), the Ministry of Manpower may reclassify the contractor as an employee, triggering back taxes, penalties, and forced employment status. To minimize misclassification risk, hire contractors only for genuinely short-term specialized work (consulting, freelance writing, one-off projects), ensure the contract specifies independence and autonomy, and avoid directing day-to-day work. For longer-term or core work, use an EOR.

EOR vs. PEO (Professional Employer Organization)

EORs and PEOs both simplify international hiring, but only an EOR becomes the legal employer of record in Egypt — a critical distinction when you don’t have a local entity of your own. The table below maps the practical differences across legal employer status, entity requirement, liability allocation, and scope of coverage.

An EOR and a PEO are different tools for different situations. An EOR is right if you do not yet have an Egyptian entity and want to hire quickly without incorporation. The EOR becomes your legal employer, takes compliance risk, and handles everything.

A PEO (professional employer organization) is right if you already have your own Egyptian LLC and want to outsource payroll and HR administration while retaining legal control. Egypt does not have a formalized PEO regulatory framework like the United States, so PEO arrangements in Egypt are typically structured as outsourced payroll and HR services where you remain the legal employer. If you have an existing entity and want to hire someone, a PEO can manage payroll and benefits administration, but you still carry legal and compliance liability. Choose an EOR if you need to hire before you have an entity; choose a PEO (or outsourced payroll services) if you already have an entity and want administrative support.

Public Holidays in Egypt

Egypt observes a defined set of official public holidays on which most private-sector employers must give staff a paid day off (TimeandDate Egypt holidays 2026). The table below lists the statutory holidays employers need to build into payroll calendars and leave planning for the year, along with the date rule for each.

Egypt observes approximately 12-19 public holidays per year depending on Islamic lunar calendar dates. Work performed on a public holiday attracts double pay (100% premium) in addition to the holiday being a paid rest day. The exact dates for Islamic holidays (Eid al-Fitr, Eid al-Adha, Muharram, Mawlid) are determined each year based on lunar sightings by the Egyptian religious authorities and may shift by one or two days. Employers should monitor official government announcements in early 2026 for confirmed Islamic holiday dates.

How to Get Started with an EOR in Egypt

• First, assess your hiring needs. Determine how many employees you plan to hire, whether any require work permits, and your timeline for onboarding. An EOR is ideal for 1-15 employees and situations where speed is critical.
• Second, choose an EOR partner and sign the service agreement. Provide employee details (name, role, salary, start date, qualifications). Most providers can confirm pricing and timeline within 1-2 business days.
• Third, work with the EOR to prepare employment contracts. The EOR will draft a compliant Arabic contract under Labour Law No. 14 of 2025, which you and the employee review and sign.
• Fourth, submit to social insurance and tax authorities. The EOR registers the employee with ESIO (Egyptian Social Insurance Organization), obtains a tax ID, and opens the payroll account. This typically takes 3-7 days.
• Fifth, conduct the employee onboarding. Set up systems access, training schedules, and team introductions. The employee can begin work once payroll is configured and bank account details are confirmed.

Ready to hire in Egypt? Get started with Remote People and let us handle the complexity of Egypt’s employment law, social insurance, and tax compliance. We’ll have your team onboarded and compliant within 1-2 weeks.

Where companies hiring in Egypt expand next

Teams hiring in Egypt often extend across the Maghreb and into Mediterranean Europe, where shared language and long-standing talent flows overlap. Common expansion paths include Morocco (shared North African workforce profile) and a team in Saudi Arabia (deep Arabic-fluent workforce overlap). Teams scaling further usually add operations in the United Arab Emirates for a common Arabic-speaking candidate base, with Jordan extending coverage through a shared Arabic-speaking talent pool.