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Egypt is one of the largest economies in Africa and a vital gateway between the Middle East, Europe, and Africa. With a rapidly growing population and a diverse economy spanning sectors like tourism, manufacturing, technology, and agriculture, Egypt offers numerous opportunities for employers and investors.
Regarding hiring in Egypt, employers and recruiters must adhere to Egyptian Labor Law No. 12 of 2003, which governs employment practices, employee rights, and workplace obligations. There is also an increasing focus on local workforce development, encouraging the employment of Egyptian nationals in both public and private sectors.
Hiring in Egypt often relies heavily on personal networks and referrals, which can present challenges for international companies entering the market. To effectively navigate the local talent pool, companies are advised to advertise across popular job boards, collaborate with recruitment agencies, or leverage AI-driven platforms like Iris to streamline hiring and ensure access to qualified candidates.
Facts & Stats
Here are some crucial aspects to be aware of when hiring in Egypt:
Under Egyptian Labor Law, the probation period can be up to three months, and it cannot be extended beyond that. Terminating is easier for both parties during probation, but employers must still respect written contract terms if specified.
Employees are entitled to 21 days of paid annual leave per year, which increases to 30 days after completing ten consecutive years of service or upon reaching the age of 50. All annual leave should be planned in coordination with the employer, and employees are required to request approval before taking time off.
Employees are generally expected to use their leave during the same year, but in some cases, up to 3 years’ worth of unused leave can be carried over. Employees may not waive their leave rights entirely in exchange for cash compensation, except upon termination.
The standard workweek in Egypt is 8 hours per day over 6 days, totaling 48 hours per week. However, in many private sector companies, adopting a 5-day workweek with 9-hour days, including breaks, is common.
For overtime, employees are entitled to additional compensation. Daytime overtime is paid at 135% of the regular wage, while nighttime overtime (between 7 PM and 7 AM) is compensated at 170% of the regular wage. Employees are also entitled to higher compensation rates if required to work on official holidays or rest days.
The standard working hours are set at a maximum of 8 hours per day or 48 hours per week. Any work performed beyond these limits is considered overtime and must be compensated accordingly. Employees working overtime during the daytime are entitled to an additional 35% of their regular hourly wage, while those working nighttime overtime (between sunset and sunrise) receive an extra 70%.
For work performed on weekends, employees are entitled to 100% of their daily salary, and those working on public holidays must be compensated with double their regular pay. Regardless of overtime, total working hours, including additional shifts, should not exceed 10 hours per day, ensuring that employees receive adequate rest and maintain a work-life balance. These regulations help protect workers' rights and ensure fair compensation for extra hours worked.
In Egypt, the minimum wage for private sector employees is EGP 3,500 per month (as of 2024), although this can vary slightly by sector and industry based on agreements made by the National Council for Wages. Higher minimum wages may apply to certain sectors based on collective agreements.
In Egypt, individual income tax is progressive, ranging from 0% to 25%, depending on the employee’s annual income. The first EGP 21,000 of income is tax-exempt, while higher income brackets are taxed at increasing rates.
11%
Employees themselves contribute 11% of their gross salary toward social insurance. This is automatically deducted from their wages.
18.75%
Egyptian employers must contribute around 18.75% of the employee’s gross salary toward social insurance. These contributions fund pension, disability, and unemployment insurance.
0% to 25%
Egypt has progressive income taxes ranging from 0% to 25%.
Egypt operates a mandatory social insurance pension system governed by the National Organization for Social Insurance (NOSI). Employees and employers contribute to this scheme throughout their employment. To qualify for retirement pension, employees must have contributed for at least 120 months (10 years). Full retirement benefits typically begin at age 60. Pensions are calculated based on the average salary and total contributions made during the employee’s career.
Understanding termination of employment in Egypt requires a thorough understanding of legal obligations regarding termination protocols. Below, we explore the essential aspects that both employers and employees should consider.
In Egypt, the termination procedure must be clearly outlined in writing, aligning with the employment agreement terms, and is based on the contract type and the reason for termination. Termination decisions must comply with Labor Law No. 12 of 2003, emphasizing just cause and ensuring employees are treated fairly.
Acceptable circumstances for termination include:
- Voluntary resignation by the employee
- Mutual agreement between both parties
- Unilateral termination by the employer (only on legally justified grounds such as gross misconduct, repeated violations despite warnings, or documented poor performance)
- Expiration of the employment contract
Unlawful termination without sufficient cause could result in compensation claims by the employee, often amounting to at least two months’ salary for each year of service and reinstatement in some cases.
Notice periods vary based on the type of employment contract. During probation, no notice period is required. For permanent contracts:
- Employees with less than 10 years of service must receive a 2-month notice.
- Employees with more than 10 years of service must receive a 3-month notice.
Employees must also give the same notice period if they intend to resign.
Upon termination, employees in Egypt are entitled to end-of-service compensation, though this depends on the contract type.
- Fixed-term contracts: If terminated prematurely without valid reason, the employee is entitled to the remaining wages for the full contract term.
- Indefinite contracts: There is no mandatory severance pay under the law for termination with proper notice, but courts may award compensation in cases of unfair dismissal.
For retirement (reaching age 60), employees are entitled to pension benefits based on their contributions to social insurance. Some companies also offer gratuity payments voluntarily, especially in sectors with strong collective agreements.
Here's an overview of the various types of leaves and their corresponding regulations:
Annual Leave
Employees are entitled to 21 days of paid annual leave per year, which increases to 30 days after completing ten consecutive years of service or upon reaching the age of 50. All annual leave should be planned in coordination with the employer, and employees are required to request approval before taking time off.
Employees are generally expected to use their leave during the same year, but in some cases, up to 3 years’ worth of unused leave can be carried over. Employees may not waive their leave rights entirely in exchange for cash compensation, except upon termination.
Sick Leave
Employers must provide up to 180 days of sick leave per year, with paid compensation based on a sliding scale:
- 75% of the regular wage for the first 90 days.
- 85% of the regular wage for the following 90 days.
Sick leave entitlements must be certified by an approved medical authority.
Maternity and Paternity Leave
Female employees are entitled to 90 days of paid maternity leave, provided they have contributed to social insurance for at least 10 months before the leave. This entitlement applies twice during the employee’s career.
There is no statutory paternity leave under Egyptian labor law, but some companies may provide this benefit as part of their internal policies.
Hajj Leave
There is no mandatory Hajj leave under Egyptian labor law. However, some companies, especially those operating in religiously sensitive sectors, may offer special leave to Muslim employees performing Hajj or Umrah.
Student Leave
Student workers who are enrolled in formal education are entitled to paid leave on exam days, provided they give advance notice and submit proof of their examination schedule.
Marriage Leave
There is no mandatory marriage leave under Egyptian labor law. However, some employers voluntarily grant 1-3 days of paid leave for employees getting married, based on internal policies.
Bereavement Leave
Employees are entitled to 3 days of paid leave in the event of the death of a first-degree relative (spouse, parent, or child). Additional leave may be offered based on company policy or collective agreements.
Frequently asked questions
What makes Iris unique for hiring in Egypt?
Iris offers AI-driven recruitment that simplifies the hiring process, helping employers find qualified Egyptian talent efficiently. It also enables companies to navigate local hiring regulations, ensuring compliance with Egyptian labor laws.
Why is localization important for employers in Egypt?
While there is no formal quota system, Egyptian labor law encourages hiring local talent, especially in sectors with high workforce availability. Employers must obtain approval from the Ministry of Manpower before hiring expatriates, ensuring that the required skills are not available locally.
What are the key labor laws employers should be aware of in Egypt?
Employers in Egypt must adhere to Labor Law No. 12 of 2003, which regulates working hours, probation, termination, leave entitlements, and social security contributions. Employers are also responsible for ensuring fair treatment and avoiding unfair dismissals, which can lead to legal disputes.
How does termination of employment work in Egypt?
Termination must be legally justified and follow due process. Employees on indefinite contracts are entitled to a notice period (2-3 months) and may claim compensation for unfair dismissal. Fixed-term contracts require full payment until the contract's expiration if terminated early without a valid reason.
What are the leave policies and entitlements in Egypt?
Employees in Egypt are entitled to 21 days of annual leave, which increases to 30 days after 10 years of service or at age 50. Sick leave is provided for up to 180 days, with a percentage of salary paid. Maternity leave grants 90 days for female employees, and public holidays are determined by the Egyptian government and Islamic calendar.
