Egypt is recognized as one of the leading business environments for investors, offering affordable labor costs, advanced IT infrastructure, and a skilled workforce. The African country has a strong economy, with GDP growth having reached 6.6% in 2022. In addition to its GDP growth, Egypt became the third outsourcing destination in the world based on the Offshore BPO Confidence Index. For employers who want to expand in Egypt, payroll outsourcing simplifies the process by handling wages, the administration of benefits, and taxes while keeping you compliant with the Egyptian Labor Law of 2003.

Outsourcing payroll services in Egypt offers the benefits of cost-effectiveness, time-saving, and access to expertise. This guide explores payroll outsourcing in Egypt in more detail, along with the benefits of payroll and alternative outsourced service solutions. 

Table of Contents show

What is Payroll Outsourcing in Egypt?

Payroll outsourcing in Egypt is managed by a team experienced in Egypt’s tax laws, payroll schemes, and the calculation of wages. Payroll outsourcing is the process of hiring independent professionals to oversee financial practices, from keeping updated on Egypt’s tax laws to filing tax reports, administering bonuses and overtime, and paying employees their monthly compensation. Deductions, including government stamps and taxes, will be calculated and executed by the payroll team. The payroll provider will track employee leave and overtime hours and pay your staff at the correct rates as per business regulations.

Remote payroll in Egypt provides streamlined and tailored services for businesses, so you not only adhere to the payroll cycle but your company will remain compliant with labor laws. Industry experts remain updated on tax laws and employment regulations, so you don’t have to. They keep employers compliant with payroll-related matters, allowing you to focus on core business operations without penalties for non-compliance.

How Does Payroll Outsourcing Work in Egypt?

Outsourcing payroll to a trusted provider in Egypt starts with an assessment of your company’s needs. You can expect the payroll provider to ask questions about your existing payroll structure, from the types of employment contracts to the systems used to process employee compensation and benefits.

Once you choose a professional payroll service in Egypt, you will provide information such as employee wages, benefits, and working hours. Working with the third party, employers will provide access to existing payroll systems or set up an account to transfer confidential employee data.

The outsourced payroll provider in Egypt is responsible for paying employees every month and correctly classifying employees for tax purposes. The service provider will calculate and deduct tax and process company payroll based on Egyptian Labor Law.

Egypt Labor Law and Payroll Compliance

Labor Law No.12 of 2003 governs wages, working hours, overtime, and employment terms and conditions in Egypt. An Egyptian payroll provider will legally classify employees according to this law, as different payment brackets and tax structures apply to full-time, part-time, or contracted employees. Payroll compliance includes performing the correct tax deductions and minimum wage payments based on employment or contract type. If a company misclassifies its workers, it will result in penalties, such as a fine, for non-compliance.

Egypt labor law and payroll compliance include the Social Insurance and Pension Law No. 148 of 2019, in which compensation is provided in the case of work-related injury, disabilities, and unemployment. It also covers basic pensions for staff in which employers and employees contribute a percentage of their earnings to the fund. A payroll provider in Egypt will keep you compliant by calculating deductions and ensuring that employees benefit from the correct social security contributions, taxation, and wage regulations.

What are the Benefits of Payroll Outsourcing in Egypt?

A key role of an Employer of Record is to ensure full compliance with Canadian laws and regulations. Her we set out the key elements of Canada’s labor laws. 

Cost-savings 

The labor law and systems in Egypt make it easier for employers to outsource their workforce. Rather than hire an in-house team, which involves full-time salaries and benefits, outsourced providers are paid a monthly fee. Outsourcing also allows businesses to focus on growth as they have more free time and resources to dedicate to core functions. 

Compliance 

A payroll team in Egypt consists of payroll and tax professionals. They are familiar with the country’s labor laws, and they keep track of changes in employment and tax legislation so your business is always protected against non-compliance. Payroll providers ensure that you adhere to business regulations concerning deductions for social security, the correct classification of employees, and adherence to Egypt’s tax laws. 

Operational Efficiency 

Businesses can prioritize their core functions by handing payroll to a trusted third-party provider. Outsourcing payroll in Egypt allows you to entrust these services to an experienced team that will prevent mistakes and delays. They incorporate sophisticated payroll software to streamline services such as submitting reports to government authorities and performing deductions from employee wages, creating efficiency and time-savings for employers.

What are the Downsides of Payroll Outsourcing in Egypt?

Client companies are concerned about data breaches or sensitive information being exposed to unauthorized individuals. In Egypt, Intellectual Property Law No. 82 of 2002 requires that service providers implement strict measures to protect data when outsourcing in the country. This process includes an investment in IT infrastructure and software to safeguard information.

Another concern is the possibility of losing control over payroll processes. Employers can choose complete payroll or partial payroll services. Where complete payroll is outsourced, the provider will handle all aspects, such as deducting benefits, managing salaries, and keeping employers compliant with tax and labor laws. Employers remain legally responsible for the payment of taxes and wages whether or not payroll is entrusted to a third-party provider.

How to Choose a Payroll Outsourcing Provider in Egypt

In the search for a payroll service provider, look for experience in managing payroll systems on an international scale. A payroll outsourcing provider in Egypt should have a positive track record of assisting their clients with payroll processing and measures to protect confidential data. A reputable provider should have positive reviews or client testimonials confirming their support, efficiency, and expertise in handling their employee payroll.

A professional service is knowledgeable and up-to-date on the latest tax regulations and labor laws. This should be communicated to you when discussing the duties provided by the payroll service. Look for a service provider that offers scalable solutions you can afford as you grow your business. 

How Much Does Payroll Outsourcing Cost in Egypt?

The costs of payroll processing differ based on the services you need and whether it involves data integration with existing payroll systems. Considering the payroll outsourcing costs in Egypt can help you invest in the right plan for your company.

There are two sets of fees associated with a payroll services provider. The initial fees associated with payroll outsourcing in Egypt include data migration, payroll service configuration, and setting up support for efficient communication. This is a once-off payment and is not charged by all payroll providers.

The second set of fees consists of a monthly charge of a fixed fee per employee. On average, employers can pay $5 to $20 per employee or upwards of $200 per month. The monthly costs for payroll outsourcing in Egypt depend on the size of the workforce and the scope of services included in the agreement.

Payroll Outsourcing Alternative: Employer of Record

If you are looking for a comprehensive solution to manage an international workforce, then an Employer of Record, or EOR, is a suitable choice. An EOR helps employers expand their businesses abroad if they do not have a legal entity in the country. A closer look at the services of an EOR can help you determine whether it is the best outsourcing option for your company. 

An EOR in Egypt helps businesses establish a professional labor force without the costs and lengthy procedures involved in registering an entity in the country. The EOR acts as a legal employer on behalf of the client company, and they are responsible for managing various aspects of compliance, payroll processing, and core HR functions. 

An Employer of Record simplifies the onboarding process by following Egyptian Labor Law. They will oversee indefinite and part-time employee contracts and assist client companies with mandatory benefits such as pension funds. Partnering with an EOR will keep the client company compliant with labor laws and tax regulations while the employer focuses on collaborating with employees and maintaining a productive workforce.

Conclusion

 Payroll outsourcing in Egypt offers a multitude of benefits for employers who want to grow their business abroad. Egyptian payroll services streamline processing such as tax reporting, wage calculations, and administering employee benefits. An EOR, on the other hand, delivers comprehensive service solutions involving onboarding and offboarding employees, managing employee contracts, and keeping client companies compliant. The purpose of these services is to provide cost and time savings through operational efficiency.

To help you find a trustworthy provider, contact Remote People’s Services. We specialize in connecting our clients to leading outsourcing services in Egypt with ease and efficiency. Start your expansion abroad with the world’s most reputable payroll and EOR providers.

Ready to optimize payroll in Egypt? Remote People’s payroll outsourcing services ensure compliance and efficiency.

Contact us today to discuss how we can support your business in Egypt.