Employer Of Record (EOR) Services In Egypt

The market in Egypt is expanding day by day. Today, newer businesses across different industries are planning to tap this potential and expand their services internationally. One of the fundamentals of expansion to a new territory is hiring a global team according to tax and labor law compliance.

Local laws and regulations for international hiring can be complex for businesses. This is where it becomes essential to choose the right EOR partner. Your Employer of Record (EOR) provider can offer multiple benefits, ranging from access to the top talent recruitment for your company to routine administrative tasks that require operational finesse.

Benefits Of Utilizing An EOR Solution

As a company looking to expand its operations in Egypt, there are certain core business functions you need to focus on. EOR services from a reliable partner firm can help you cut down on the additional costs of setting up an in-ho,use EOR or HR services t,eam. You can use these company resources to focus on other important parameters, such as R&D for product-market-fit (PMF) or performance marketing.

Here’s what an Employer of Record (EOR) service provider brings to the table:

Hire Talent Globally

You can hire employees overseas and navigate the local laws and regulations seamlessly with correct guidance. Outsourced EOR firms conduct scouting operations and interviews aligned to the vision of different companies, ensuring that only the best-fitted employees are hired.

Local Compliance And Risk Mitigation

EOR providers have a lot of experience working in a particular market and understand the nitty-gritty details of the local market sentiment in Egypt. They draft locally compliant labor contracts and take care of all important paperwork for employee onboarding and offboarding.

Scalability And Cost Savings

As you grow in the Egyptian market, you will require more international hiring and functional departments within the company. The right EOR partner can help you hire employees overseas with ease at a much cheaper rate compared to the traditional in-house EOR model.

Focus On Your Core Business

As discussed earlier in brief, you can focus your resources and energy on core business activities, such as product development, marketing, and customer service,, by delegating your human resources (HR) and administrative tasks to an EOR.

EOR Services By Edge

At Edge, our EOR services are designed to keep the best interests of your company in mind. We understand the initial struggles for a business looking to expand its operations in Egypt and aim to offer a comprehensive suite of solutions that can simplify the journey.

Our Plans And Pricing

At Edge, we aim to eliminate the day-to-day administrative hassles and drudgery with our comprehensive HR and EOR services. Our starting prices are budget-friendly for smaller businesses with limited resources. As you grow, we have a plethora of additional services that can further smoothen operations within your company and boost your growth in the Egyptian market.

Our Flexibility

Our pay-as-you-go model enables you to select the particular EOR services you wish to outsource. As more and more employees join your workforce and you establish your presence in the Egyptian market, we can upscale your processing needs conveniently to suit your business at that stage.

Our Commitment to Excellence

Our EOR professionals are highly qualified and well-trained. They understand the requirements of a new business venturing into Egypt. Apart from our core EOR service offerings, they can also help you manage your workforce efficiently and plan your growth strategically in the Egyptian market. It is almost like having an elder brother beside you who understands the operational regime in Egypt.

Our Best Features

• Our state-of-the-art EOR management software and technology
• Facility to integrate services with payroll management (including pay slip generation) and human resources (by Edge Global HR services team)
• Regulatory compliance with labor laws and tax regime
• Paperwork for contracts, tax filing, audit reports, and other operational needs

Work Laws And Labor Regulations In Egypt

Normal Payroll Cycle

In Egypt, the typical payroll cycle follows a monthly pattern, with salaries typically disbursed around the 25th of each month. While some companies may choose bi-weekly or semi-monthly schedules, the monthly cycle remains prevalent in practice.

To keep the employees satisfied and happy, an outsourced payroll or EOR provider needs to adhere to the payroll cycle without errors.

Minimum Wages And Overtime Compensation

The minimum wage in Egypt varies depending on the sector and region. However, as of January 2024, the national minimum wage for private sector employees was set at 2,400 Egyptian pounds per month.

In Egypt, there are certain regulations for overtime work as well. For instance, during daylight hours, overtime is typically compensated at a minimum of 35%, while night shifts command at least a 70% increase in pay. Moreover, work performed on days off and holidays warrants a compensation rate of 100%. It’s noteworthy that the maximum duration for a workday is 8 hours, with a weekly limit of 48 hours. Going beyond these thresholds may prompt additional regulatory measures and necessitate further compensations under labor laws and policies.

Work Leave Allowances

Employees are entitled to different types of work leave allowances in Egypt.

• Annual Leave – Employees with one year of uninterrupted service are eligible for a minimum of 21 paid annual leave days annually. This entitlement extends to 30 days if they meet specific criteria, including having worked for over 10 years in total with the same employer or being aged 50 or above. Accrued leave must be used within the same year and cannot be carried forward to the next year unless otherwise specified in the employment agreement.
• Parental Leave – Women employees who have made contributions to social insurance for a minimum of 10 months qualify for three months of compensated leave per child, with a limit of two children. Egypt does not have a nationwide statutory provision for paternity leave. Nonetheless, certain companies may include it as a benefit in their employment agreements.
• Sick Leave – The duration of sick leave and whether it is paid or unpaid can vary based on factors such as the length of employment, the severity of illness, and the employer’s policies. Generally, employees are required to provide medical documentation or a doctor’s certificate to validate their need for extended sick leave.

Holidays

In Egypt, there are some holidays observed nationwide. In addition to these, there are also certain regional holidays. Some holidays are also based on religious calendars and can vary every year.

Here’s a short list of national holidays in Egypt:

• January 1st – New Year’s Day
• January 7th – Coptic Christmas
• April 25th – Sinai Liberation Day
• May 1st – Labor Day
• July 23rd – Revolution Day
• October 6th – Armed Forces Day
• October 24th – Suez Canal Day
• December 25th – Christmas Day (celebrated by Coptic Christians)

Severance Pay And Termination Of Contracts

According to the Labor Law No. 12 of 2003 and its subsequent amendments, employees who are terminated without cause are entitled to severance pay, which is calculated based on their length of service:

• Employees with less than one year of service are generally not entitled to severance pay.
• For employees with one year or more of service, severance pay is typically calculated as one month’s salary for each year of service, up to a maximum of 12 months’ salary

The termination of the employment contract can be initiated by the employer (based on misconduct or violation of company policies) or the employee. It becomes obligatory to abide by the notice period mentioned in the contract. The length of the notice period may vary depending on factors such as the length of service and the terms of the employment contract.

Tax Regime In Egypt

For individuals, the tax rates in Egypt are progressive, which means that they keep on increasing with increasing salary. Here’s a simplified version of income tax for individuals in Egypt.

In addition, businesses are required to adhere to the Corporate Income Tax (CIT) regulations formulated by the tax authorities. These criteria vary depending on the industry and products that a business sells.

Moreover, Egypt imposes a VAT system on the sale of goods and services. The standard VAT rate is 14%. Certain goods and services may be subject to reduced rates or exemptions.