The Complete Guide to Employer of Record Services in Egypt

Expanding into Egypt offers exciting opportunities for businesses looking to tap into a dynamic workforce and a growing economy. However, hiring in Egypt requires a deep understanding of the country’s labor laws, tax regulations, and payroll requirements. Cadana’s Employer of Record (EOR) solution makes it easy for companies to hire in Egypt, manage compliance, and streamline payroll without setting up a local entity.

In this guide, we everything you need to know about Employer of Record (EOR) services in Egypt and how Cadana can support your expansion.

What is an Employer of Record (EOR)?

An Employer of Record (EOR) is a third-party organization that legally employs workers on behalf of a business. This enables companies to hire employees in Egypt without the complexities of setting up a local subsidiary. EOR services typically include:

Hiring and onboarding employees in compliance with Egyptian labor laws.
Managing payroll and benefits administration.
Handling employment contracts and terminations.
Ensuring compliance with tax regulations.

With Cadana’s EOR solution, businesses can focus on growth while we take care of the complexities of hiring in Egypt and staying compliant.

The Risks of Employee Misclassification in Egypt

Misclassifying employees as independent contractors instead of full-time employees can lead to serious legal and financial risks, including:

Legal Penalties: The Egyptian labor law enforces strict penalties for misclassification, including fines and back payments. For instance, employers may face penalties for failing to register employees with the relevant authorities.
Tax and Social Security Issues: Employers may be required to retroactively contribute to social insurance funds.
Employee Lawsuits: Workers may claim unpaid benefits such as severance pay, social security, or overtime.
Reputational Damage: Non-compliance can negatively affect your brand's credibility.

Cadana ensures proper classification of workers, helping businesses hire in Egypt with full compliance and minimal risk.

Benefits of Using an Employer of Record in Egypt

Cadana’s EOR services provide several advantages for companies looking to hire employees in Egypt, including:

Compliance with Egyptian Labor Laws: Avoid legal risks by ensuring your employment contracts, payroll, and benefits meet local requirements.
Faster Hiring Process: Hire employees in Egypt without delays related to setting up a local entity.
Cost-Effective Expansion: Save time and money by outsourcing HR, payroll, and compliance tasks.
Reduced Administrative Burden: Let Cadana handle tax filings, social security contributions, and employee benefits.
Improved Employee Experience: Provide timely salary payments and ensure employees receive statutory entitlements.

Overview of Hiring in Egypt

Employment Laws

Egypt’s labor market is governed by the Egyptian Labor Law No. 12 of 2003, which outlines:

Employment contract requirements (contracts must be in Arabic and specify compensation, benefits, and job responsibilities).
Protection against unfair termination.
Mandatory social insurance contributions for employees and employers.

Payroll Management and Tax Compliance in Egypt

Payroll Frequency

Salaries in Egypt are typically paid on a monthly basis.

Income Tax Rates (2024)

Egypt has a progressive income tax system:

Up to EGP 15,000 – 0% (Tax-exempt).
EGP 15,001 – 45,000 – 2.5%.
EGP 45,001 – 90,000 – 10%.
EGP 90,001 – 250,000 – 15%.
EGP 250,001 – 400,000 – 20%.
Above EGP 400,000 – 22.5%.

Employer Contributions

Employers in Egypt are required to contribute to social insurance funds, including:

Social Security Contributions: Employer Contribution: 18.75% of the employee’s salary; Employee Contribution: 11% of salary.
Health Insurance Contributions: Employers contribute to Egypt’s National Health Insurance scheme to provide medical benefits for employees.

Cadana’s payroll management services handle tax deductions and social insurance payments, ensuring compliance with Egyptian regulations.

Overview of Employment Contracts in Egypt

Employment contracts in Egypt must be written in Arabic and include:

Job Title & Description.
Salary & Benefits Package.
Working Hours & Leave Entitlements.
Termination & Notice Periods.
Dispute Resolution Terms.

Types of Contracts

Fixed-Term Contracts: For temporary positions or projects.
Indefinite-Term Contracts: For long-term employment with no specified end date.

Probation Periods

Up to three months (as per Egyptian labor law). During probation, termination can occur without severance, but employees must receive their accrued wages.Cadana ensures employment contracts comply with Egyptian labor laws, reducing legal risks when hiring in Egypt.

How an EOR in Egypt Ensures Compliance with Employment Law

Egyptian labor laws regulate:

Standard working hours: 8 hours per day, 48 hours per week.
Overtime pay: 135% of the regular rate for overtime, 170% for work on rest days, and 200% for public holidays.
Severance pay and end-of-service benefits.

Cadana’s EOR solution ensures compliance with Egyptian labor laws, making it easy for businesses to hire in Egypt while minimizing risks.

Employee Benefits and Compensation in Egypt

Statutory Benefits

Paid Annual Leave: 21 days per year (30 days after 10 years of service or for employees over 50).
Paid Maternity Leave: 90 days with full pay (requires at least 10 months of prior employment).
Sick Leave: Employees are entitled to paid sick leave based on a medical certificate.

Supplemental Benefits

Many employers offer:

Private health insurance.
Retirement savings plans.
Housing and transportation allowances.

Cadana ensures employees receive their statutory and supplemental benefits, improving job satisfaction.

How an EOR Can Improve Employee Experience

By partnering with Cadana, businesses can offer employees:

Timely and accurate salary payments.
Access to healthcare and retirement benefits.
Seamless HR support for any employment-related issues.

Providing a positive experience increases retention and enhances productivity when hiring in Egypt.

Get Started with an EOR in Egypt

Expanding your workforce in Egypt is easier with Cadana’s EOR solution. We help businesses:

Hire employees quickly and compliantly.
Manage payroll and social security contributions.
Ensure full compliance with Egyptian labor laws and tax regulations.

Implementing EOR Solutions: A Practical Guide for Hiring in Egypt

Assess Hiring Needs: Determine the positions and skills required.
Partner with Cadana: Our EOR solution streamlines hiring in Egypt.
Onboard Employees Quickly: We handle employment contracts, tax registrations, and benefits.
Monitor HR & Compliance: Ensure compliance while focusing on business growth.

Why Choose Cadana for Hiring in Egypt?

Egypt’s labor market presents unique challenges, but Cadana simplifies the hiring process by handling compliance, payroll, and HR tasks on your behalf.

By using Cadana’s Employer of Record services, businesses can hire in Egypt with confidence, ensuring full compliance with local labor laws while minimizing administrative burdens.

Ready to hire in Egypt? Connect with Cadana today and start building your workforce with ease. This revised version includes more specific details on legal compliance, recent updates, and comparative advantages of Cadana's services.