Egypt Employment Guide
Egypt Employment Guide
Egypt spans northeastern Africa and southwestern Asia, located at the strategic hub of the Mediterranean Sea and the Red Sea with important geopolitical status. It has ~110 million people, the most populous country in the Arab world. Its economic pillars include oil and gas, tourism, agriculture, textiles and construction, while IT and financial services have developed in recent years. Cairo, the capital, is the political, economic and cultural center. Egypt’s labor laws require written contracts for employment relations, with a general 48-hour workweek. Employers must guarantee minimum wages and basic working conditions. Dismissals need reasonable grounds and compliance with legal procedures, and the social insurance system provides certain protection for employees.
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Currency
Egyptian Pound (EGP)
Capital
Cairo
Official language
Arabic
Salary Cycle
Monthly
Our Employment Guide in Egypt
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Understanding Minimum Wage Regulations in Egypt
For businesses expanding into Egypt, it's crucial to understand the local compensation landscape. The mandated minimum wage for private sector employees is set at 6,000 Egyptian Pounds (EGP) per month. This baseline figure is essential for ensuring compliance and fair compensation practices when hiring local talent.
Egypt's Personal Income Tax Structure
Egypt employs a progressive tax system for personal income, with rates scaling from 0% to 27.5% based on annual earnings. This structure is designed to ensure a fair contribution based on an individual's ability to pay.
| Annual Taxable Income (EGP) | Applicable Tax Rate |
|---|---|
| 0 – 40,000 | 0% |
| 40,001 – 55,000 | 10% |
| 55,001 – 70,000 | 15% |
| 70,001 – 200,000 | 20% |
| 200,001 – 400,000 | 22.5% |
| 400,001 – 1,200,000 | 25% |
| Over 1,200,000 | 27.5% |
Calculating Total Employment Costs
When budgeting for an employee in Egypt, the total cost extends beyond the gross salary. Employers should anticipate additional statutory contributions, which typically amount to approximately 19.75% of the employee's wage.
- Social Insurance: 18.75% of the salary
- Unemployment Insurance: 1.0% of the salary
It's important to note that these contributions are often subject to a maximum insurable wage ceiling, meaning the effective percentage may be lower for higher salaries. For precise calculations tailored to specific roles, consulting with an expert like SailGlobal is highly recommended.
Initial Setup and One-Time Fees
Beyond recurring monthly costs, companies should factor in initial setup expenses. A key one-time fee is for the mandatory processing of the official paper employment contract, which is approximately 80 USD.
Standard Working Hours and Overtime Regulations
The standard legal workweek in Egypt is 40 hours, typically structured as eight hours per day from Sunday to Thursday. Understanding regulations concerning overtime compensation is vital for managing payroll accurately and avoiding compliance issues. For instance, non-compliance with overtime rules has been a common challenge for new market entrants, leading to unnecessary penalties.
Navigating these financial and regulatory aspects is fundamental to a successful market entry. Partnering with a specialized HR and payroll provider like SailGlobal can streamline this process, ensuring full compliance and accurate financial planning from day one.
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