Egyptian labor laws favor employees and prohibit wage discrimination based on sex, origin, language, religion, or creed. It is based on equal opportunity for all. Below is information on the laws that employers must observe in Egypt. Employee Contract: Employment contracts in Egypt need to be in writing, and the language of use should be Arabic. The employer, employee, and social insurance office will keep a copy of the contract.
Employee Contract
Public and Provincial Holidays
Leave Information
Basic
The contract details include employer and workplace information, contract duration, employee details, job description, wages, and employee benefits. Contract types include indefinite and fixed-term agreements, the latter lasting up to 5 years and subject to extension.
Probation Period
The usual probationary period followed in Egypt is 1 to 3 months.
13th Month Pay
There is no provision for the 13th-month salary in Egypt.
Employee Benefits
Employers in Egypt may provide the following benefits to their employees:
- Maternity leave.
- Social Security.
- Free Healthcare.
The employee must be paid monthly, usually, on the 5th of every month.
The official minimum wage is EGP 2,700 per month.
The standard working hours in Egypt is 8 hours per day and 48 hours per week. Overtime is allowed in the country and its compensation varies as per the table below: Overtime pay rates vary: 135% for daylight hours, 170% for nighttime, and 200% for rest days or public holidays.
Employer Payroll Cost:
| Type of Contribution |
Contribution |
| Social Security Contribution |
18.75% (Minimum wage: 1400, Maximum wage: 9,400) |
Employee Payroll Cost:
| Type of Contribution |
Contribution |
| Social Security Contribution |
11% (Minimum wage: 1,400, Maximum wage: 9,400) |
Employee Income Tax
| Annual Taxable Income |
Tax rate % |
| From 0 to 15,000 |
0.000 |
| 15,000 to 30,000 |
2.5% |
| 30,000 to 45,000 |
10% |
| 45,000 to 60,000 |
15% |
| 60,000 to 200,000 |
20% |
| 200,000 to 400,000 |
22.5% |
| More than 400,000 |
25% |
VAT
The standard rate of VAT followed is 14%.
When terminating an employment contract in Egypt without legitimate and adequate justification, compensation is required. Dismissal by an employer is limited to cases of serious offenses, necessitating a submission to a committee for decision. Grounds for termination include false identification, consecutive absence, professional incompetence, and violation of safety instructions. The New Labor Law permits termination at the end of a fixed-term contract or upon completion of the specified task. Open-ended contracts can be terminated by either party, following the stipulated notice period and writing procedures.
The notice period during probation is 7 to 10 days, while for permanent employees, it is two to three months.
Severance pay
No statutory severance pay is mentioned unless mentioned in the contract.
Foreign employees will need a work permit from the Ministry of Manpower to work legally in Egypt. The processing usually takes a month and is valid for one year.