How to Hire Employees in Egypt: A Comprehensive Guide

Over the last few years, Egypt has transformed from a country struggling with unrest in the political context to a fast-growing economy. It is an important business hub for several businesses across North Africa and the Middle East. 

The top advantages that make Egypt such a significant hub for businesses worldwide-

• A positive outlook that foreign direct investment plus infrastructure spending back well.
• Egypt comes vested with potential for companies seeking expansion across markets other than developed markets from the northern hemisphere. 
• It is also the third biggest economy in its zone after  Saudi Arabia and Israel. 
• It saw continued growth even during the pandemic of the last two years.
• Egypt saw around 3.3 percent GDP growth, expected to surpass more than 5% in 2022. 
• Egypt receives enormous chunks of FDI or foreign direct investment in the African territory. In 2021, the FDI inflow touched 5122 billion US dollars. 

Egypt’s economy also benefits from its low labor costs and well-skilled workforce. Its labor market includes 24.133 million potential employees as of 2020. Many of these employees are experienced in their respective fields and have higher education. In 2019-2020, more students enrolled themselves in higher education. Moreover, Egypt’s youth is also fluent in various languages. Arabic is Egypt’s official language, but it is common to find residents speaking English and French. Hence, hiring employees in Egypt can be beneficial for your company. Read this article to learn how to recruit employees in Egypt.

Things to Know Before Hiring in Egypt

Before hiring employees and initiating recruitment and selection in Egypt, you need to track a few pointers-   

• Global companies looking at recruitment and selection in Egypt must comply with labor regulations and all local employment rules. 
• Check out all tax structures specific to each industry in Egypt.
• Spend time understanding the local employment laws.
• As per Egyptian law, workplace discrimination based on age, sex, gender, disability, personal choices, religion, or/and political opinion is strictly prohibited. 

Employment contract

An employment contract is a written document that formally establishes a working relationship between an employee and the employer. The document specifies all the job-related requirements and payments that employers need to make in return for employee services. 

In Egypt, the contracts depend on Egyptian Labor Law No. 12 and the English Civil Code. If an international or  non-Egyptian entity employs someone, the person is subject to Egyptian income taxes despite not being governed by the Labor Code.

Employers in Egypt must have three copies of a written contract, irrespective of the employee’s nationality. Both employee and the employer must receive a copy of the same in Arabic along with the Social Insurance Officer or an equivalent labor office entity. 

Employers must mention the monetary amounts in the contract in Egyptian pounds. 

Every company must have the employee handbook to reference the employment contract and provide translated copies to concerned parties.

Incorporate the following details in the contract:

• Employer’s name
• Salary
• Benefits
• Extra compensation
• Profile
• Working hours
• Paid offs
• Probation details
• Termination deets

Probation 

• Employers and employees can mutually decide upon a probation period for mention on the employment contract. 

• The probation period can be of three months at most and cannot be repeated.

Termination

• Before any termination of the employment contract, you need to obtain approval from the Ministry of Manpower and Immigration. 
• Employees can challenge the decision and can be reinstated when found unlawfully terminated. 

Notice Period

• Employees with a company for fewer than ten years must receive a 60-day notice, while others should receive a notice at least before 90 days.

Employment-related must-knows

When you plan to follow the hiring process in Egypt, you must clearly understand all  local employment laws.

• The contract needs to be written for all benefits and leave policies to stand clear during the recruitment process in Egypt.

• The Labor Law applies to every Egyptian employee, regardless of any business structure if an Egyptian owns the company. 
• Depending on the industry and the business type, you need a business bank account before beginning the hiring process or registering for tax and social security. 
• The process needs a verified signature and initial deposit. Ensure you have translated copies of every important document, including contracts, payroll documentation, and all tax forms.
• All companies must house an internal organization to help facilitate all work regulations, disciplinary rules, and maternity rights under Labor Law. 
• Recruitment stipulation: As per the Companies Law of Egypt, not more than 10 percent of employees — 25 percent for listed free zones — can belong to a country abroad. A non-Egyptian employee cannot have a salary that exceeds 20 percent of total wages.
• Intellectual property: All inventions and work products become the sole property of an employer, while some specific restrictions could apply as per the industry, company type, and stipulations mutually agreed upon in a written contract between employer-employee. 
• All employees, even the terminated ones, must maintain a company’s trade secrets. 

Working hours and breaks

• When hiring staff in Egypt,  note the permissible working hours and breaks.
• Maximum working hours in Egypt are 48 hours every week or 8 hours a day.    
• Employees cannot work higher than 10 hours a day, and all overtime payments must exceed an employee’s main salary amount. Such payment must be

1. 1. Original compensation along with 35% more for day hours
   2. Original compensation along with 70% more for night hours
   3. Double the employee’s original compensation along with a rest day when an employee works overtime on scheduled day offs

Payroll

• Once you establish a company and hire employees in Egypt, you have to set up a payroll system. In Egypt, employees are paid monthly salaries. 

Minimum wage

• Egypt’s minimum wage was raised to EGP 2,400 every month in 2022 

Bonuses

• Bonuses have no legal backing, but payment of the same is standard in some industries.
• Employers choose to pay benefits and profit sharing to attract top talent. Some typical perks in Egypt are –

1. 1. Financed equipment for work
   2. Paid mileage as applicable
   3. Monthly stipend on housing or related utility costs
   4. Meal tickets and discount
   5. Gym membership
   6. Better health policy coverage

Maternity & paternity leaves

• Women employees who have worked for more than ten months in a company stand entitled to a paid 90-day leave.
• Employees can take 45 of these maternity leaves post-delivery. 
• Employers with over 50 employees must provide unpaid leave for up to two years. 
• Mothers are allowed regular breaks during their working hours for breastfeeding or childcare reasons.
• There is no provision for paternity leave.

Annual leave

• Employees in Egypt are entitled to 21 days of paid vacation leave after completing six months of service. If an employee is employed for more than ten years, the annual leave is for 30 days.
• Employees above 50 are entitled to 30 days’ leave.

Other leaves

• Employees can get casual day leaves not exceeding six days a year. However, this stand subtracted from the annual leave count.
• Employees in Egypt stand entitled to a maximum of six months of paid sick leave. A sickness must back the use of this leave.

1. 1. The first 90 days of sick leave allow employees payment of 75% of their salary
   2. The next 90 days allow employees to get paid 85% of their salary.
   3. Employees can convert annual leave to sick leave.

Holidays for employees             

Official public holidays in Egypt are listed below in order of the month of occurrence-

• January 7- Christmas Day
• January 25 – Revolution Day 2011, National Police Day
• April 25- Sinai Liberation Day
• May 1 -Labor Day
• June 30- 30 June Day
• July 23 -Revolution Day
• October 6 – Armed Forces Day

The above holidays occur on the day mentioned. Some other annual holidays exist in Egypt, but the days vary per the Islamic Calendar-

• April or May – Sham El Nessim (Spring Festival)
• 1 Muharram – Islamic New Year
• 12 Rabi’ al-Awwal- Birthday of the Prophet Muhammad
• 1–3 Shawwal – Eid al-Fitr
• 10–13 Zul-Higga – Eid al-Adha

Social security

Social security includes provisions for disability, pension, sick period, paid maternity leaves, unemployment-related insurance, and death allowance. Your company will be responsible for privately offering health insurance or partnering with the Medical Insurance Plan.

According to the New Law, “total insurance salary” is the employee’s actual salary. This includes fixed salary, incentive, tip, overtime payment, commission, and other remuneration types. Comprehensive insurance-based coverage is subject to some minimum and maximum thresholds-

• Minimum insurance salary is 12,000 EGP per year

• Maximum insurance salary is 84,000 EGP per year

An employer contributes 18.75% as social security while the employees pay 11% of the social insurance salary. The subscription comes with a minimum wage of EGP 1,400 and a limit of EGP 9,400. 

Taxes

• Employees and employers pay a share of social security. Your company stands responsible for payment of 15% of monthly contributions that pay management covers, along with an additional 2% of the monthly amount. Employers in challenging or even dangerous industries need to pay more. 
• Companies submit all employee income tax payments by deducting the taxed amount from salary to the Egyptian Tax Department. 
• A company will be subject to corporate tax at 22.5% on the net profits without any additional taxes imposed. 

The Cost of Recruiting an Employee in Egypt

The recruitment fees in Egypt will differ as per the recruitment process in Egypt.

As you go over the steps for hiring in Egypt, you must ensure the following costs are accounted for

• Work permit-related verification via the Ministry of Manpower and Immigration
• Proof of employment approval and applicable employee visa
• Recruitment services
• Job listing
• Business costs
• Hiring of the internal committee
• Tracking software
• Consulting costs 
• Traveling expenses 
• Business registration 
• Bank deposits
• Training costs
• Equipment costs of new employees
• Translator costs
• Mandatory plus optional benefits

What Does a Firm Need to Hire Employees in Egypt?

Hiring and managing employees depends on the employer’s business structure. You need to ensure to have ticked off the options below-

• Registration with the Commercial Registry
• Work permits for employees
• Compliance with the Companies Law 
• Business bank account
• Registration for taxes and social security
• Translated files for labor contracts, payroll info, as well as tax forms
• Internal committee for work management
• Decree of approval on all documents from Labor Office

Various options to Hiring Employees in Egypt

• Once you are sure about the recruitment in Egypt norms, you can tie-up with a global EOR service provider who will partner with an employer of record (EOR) such as Multiplier. We help to handle all logistics without you needing to set up an entity.
• Another option is to  engage in direct hiring. For this, companies require a dedicated HR team with experience in the field. 

The Steps to Hiring in Egypt

Steps in the hiring process in Egypt are as follows:

Step 1- Advertising for openings

• Begin a hiring process in Egypt by advertising job openings across leading portals.
• Make sure you mention the requirements for a job after Step 2-Scanning applications.
• This helps shortlist suitable candidates for an open role.

Step 2- Telephonic interviewing

• The second step is contacting prospects via a telephone conversation.
• A telephonic interaction lets employers understand candidate profiles per a job post.  

Step 3- Interviews

• A hiring manager frames the interview questionnaire, and a hiring panel analyses the candidate’s potential based on this round.
• Depending on the seniority of the post, you can schedule two or more interview rounds. 

Step 4- Reference checks

Employers can conduct checks, after written consent from candidates, in the categories of-

• Employment
• Payment
• Criminal and credit history

Employers must ensure a lack of discriminatory practices and keep a secure file for every employee.

Step 5- Final offer

The hiring process in Egypt comes to a close after salary negotiation and offer acceptance. After this, the employment contract comes into force.

Let Multiplier be Your EOR Platform in Egypt

Recruiting employees could be complex. You must start advertising jobs and hire someone after meeting all the requirements.

To ease the hiring process, you can choose to collaborate with a PEO-EOR platform such as Multiplier. Experts here ensure that the recruitment process in Egypt remains easy and not too nerve-wracking. We offer Saas-based Employer of Record solutions for hiring talent. Multiplier helps you understand the locals and the management to seal a hiring process in Egypt.