How to Hire Employees in Egypt: A Guide for Cross-Border Compliance

Egypt sits at a literal crossroads. The Suez Canal links Asian factories to European ports. Cairo’s airports turn six-hour flights into easy hops across Africa and the Gulf. For global employers, that geography pairs with a workforce of 33 million and a projected GDP growth of 4.7% for 2025-26.

Cost matters too. Information and communication technology (ICT) exports climbed 26% to $6.2 billion last year, driven by 50,000 new tech graduates and a youthful talent demographic where 60% of citizens are under 30. Add reliable fiber networks, and you get talent that codes by day and meets San Francisco stand-ups by night.

That mix creates a launchpad for companies hunting Python developers who can ship code overnight or data analysts skilled in Arabic sentiment analysis for Middle Eastern and North African (MENA) markets. In this guide, we make sense of the laws, payroll mechanics, and cultural cues that turn Egypt’s promise into compliant, confident hiring.

Overview of Egypt’s labor market

Egypt’s labor force continues to expand as young graduates pour in each year. More than half of the population is under 30, so the pipeline of digital-native talent is set to stay wide open. Unemployment has slipped to 6.2%—its lowest rate in three decades—thanks to steady growth in technology, manufacturing, and large-scale infrastructure projects.

Where global employers hire

• Tech and IT services. Cairo’s “Digital Egypt” parks now host Amazon, IBM, and Microsoft, part of a sector that contributes 5.8% to GDP and aims for 8% by 2030.
• Manufacturing and export. Automotive components, textiles, and consumer goods plants line the Suez Economic Zone, offering preferential trade access to Africa and the EU.
• Business-process outsourcing (BPO). Multilingual call centers in Cairo and Alexandria handle Arabic, English, and French support for banks, airlines, and eCommerce firms.

Employment trends to watch

• Youth are filling payrolls. As unemployment drops to its lowest level since 1993, 223,000 new entrants joined a labour force that now spans 33.6 million people.
• Women remain an untapped resource. Female labor-force participation stands near 18%, well below the global average, yet World Bank modeling suggests closing that gap could lift GDP by 56% over time. Investing in remote-friendly roles and childcare stipends is becoming a competitive differentiator.
• Informality remains the norm. A World Bank–backed study on Egypt’s gig and informal economy shows that around 64% of workers still hold no formal contract. That’s pressing employers to offer registered jobs and social insurance to stand out.

Talent supply and wage signals

According to Ahmed Elzaher, CEO of ITIDA, the government of Egypt is making strides toward “becoming a global hub for outsourcing and technology innovation, with initiatives aimed at growing the industry, cultivating tech talent and digital skills, and boosting Egypt’s competitiveness on the global stage.”

He highlighted Egypt’s annual output of over 760,000 university graduates, 80% of whom are proficient in a foreign language. And of that population, 50,000 hold degrees in ICT, 171,000 in finance and accounting, and 28% in STEM fields. Those highly qualified graduates position the country as a standout contender in the global services market.

If you’re willing to navigate Egypt’s regulatory maze, the mix of scale, skill, and salary efficiency offers fertile ground for long-term expansion.

Hiring options in Egypt

Expanding into Egypt calls for a clear choice: build your own legal footprint or borrow one that already exists.

Setting up a local entity

Launching a subsidiary involves registering with the General Authority for Investment, drafting bilingual articles of association, opening an EGP bank account, and enrolling staff in the tax and social insurance systems.

Incorporation alone can take six to ten weeks, and ongoing obligations (monthly payroll filings, annual audits, labor law updates) demand local counsel and back-office muscle. The upside is full control. The trade-off is capital outlay, board-level liability, and slower time-to-hire.

Partnering with an employer of record

An employer of record (EOR) already holds an Egyptian entity and becomes the legal employer on your behalf. It issues compliant Arabic-English contracts, runs payroll in EGP, withholds income tax and social insurance, and keeps pace with every tweak in Labour Law No. 12 of 2003.

You direct the day-to-day work—the EOR carries the statutory burden. The result: hires onboard in days, not months, with no paid-up capital or local directors required.

The importance of employment contracts in Egypt

Written contracts are not optional. Egypt’s 2025 Labor Law No.14 makes a signed, Arabic (or bilingual) agreement a must for every employee. Each party keeps a copy, and a third goes to the local social insurance office. Verbal terms default to an indefinite contract, exposing firms to open-ended liability if things sour later.

A compliant contract must spell out five core points:

1. job title and duties
2. base salary and any allowances
3. benefits such as health cover or bonuses
4. working hours
5. the termination clause that cites notice rules and end-of-service pay

You also need to state whether the deal is fixed-term or open-ended. Fixed-term contracts may run up to five years but convert to indefinite if the work continues after expiry without a fresh agreement.

The contract’s probation period gives both sides a test drive. The law caps it at three months, non-renewable, and either party can walk away without notice during that window. After probation, the standard notice jumps to two months for staff with under ten years of service and three months after that, or the employer can pay salary in lieu.

Working hours, holidays, and leave

Egypt’s new Labor Law tightens the reins on daily schedules and paid time off, so you need a clear playbook.

• Standard workweek. 8 hours per day, 48 hours per week; Friday is the statutory rest day.
• Overtime. Capped at 2 hours per day; paid at 135% for daytime and 170% for night work, or 200% on public holidays.
• Annual leave. 21 working days after 6 months’ service, rising to 30 days after 10 years or for staff aged 50+.
• Sick leave. Up to 6 months per 3-year cycle, funded by social insurance; 75% pay for the first 3 months, 85% for the next 3.
• Maternity leave. According to the new law, “employer-paid maternity leave will increase from 90 to 120 calendar days,” write the compliance consultants at Lockton. This leave may be taken both before and after delivery.
• Public holidays. 13–15 paid days, including Revolution Day (Jan 25th), Eid Al-Fitr, Eid Al-Adha, and Armed Forces Day (Oct 6th). Work on a holiday triggers double pay or a compensatory day off.

Employee benefits and statutory requirements

Beyond salary, Egyptian law requires you to fund a benefits package through employer-employee contributions.

• Social insurance. Employers pay 12% and employees 9% of insurable wages, up to an EGP 14,500 ceiling in 2025. Rates cover pensions, disability, unemployment, and work-injury benefits.
• Universal health coverage. Financed inside the social-insurance scheme with an extra 3.25% employer and 1% employee levy.
• End-of-service pay. One-month salary per year of service for redundancies or unfair dismissal, plus any accrued leave payouts.
• Annual bonus. New law introduces a compulsory 3% wage bonus payable on each work anniversary, unless a hardship exemption is granted.
• 13th-month salary. Not required by statute, but multinationals often add a Ramadan or year-end bonus to stay competitive in Cairo’s tech and BPO hubs.

Taxes and payroll in Egypt

You are the tax collector on behalf of the Egyptian Tax Authority (ETA). Each month, you need to calculate personal income tax, deduct social insurance premiums, and forward both to the government by the 15th of the following month. A year-end reconciliation that lists every salary and deduction is due by January 31st, so tidy records are not optional.

Income tax follows a progressive scale. For 2025, the first EGP 40,000 is tax-free, then rates climb from 10% to a 27.5% top bracket on annual earnings above EGP 1.2 million. Employers withhold these amounts every pay cycle, net of the employee’s 9% social insurance contribution and the personal allowance of EGP 20,000 set in 2024.

Most companies run payroll once a month and credit wages to local bank accounts on the last working day of the month or the first day of the new month. You should include overtime, bonuses, and statutory annual bonuses in the same cycle to avoid under-withholding penalties. By aligning salary payments with the ETA’s mid-month remittance window, you create a predictable cash flow and stay compliant.

Worker (mis)classification and contractor risks

Egypt’s new Labor Law draws a hard line between employees and independent contractors. Employees work under the company’s control, follow set hours, and receive statutory benefits. Contractors invoice for deliverables, use their own tools, and carry profit-and-loss risk.

Misclassify a worker and the Ministry of Labor can demand back-pay for social insurance, holiday leave, and the new 3% annual bonus—plus penalties and legal fees.

Courts apply tests of control, integration, and economic dependence. If you set schedules, provide equipment, or forbid outside clients, expect reclassification.

Classify correctly by using detailed SOWs for actual contractors in Egypt, avoiding “employee-like” perks, and registering bona fide staff on the national payroll and social insurance rolls. An employer of record can undertake this review and ensure contracts are in line with Law 14.

Termination and severance

Egyptian law protects job security and sets clear exit rules.

• Notice. Two months for service under ten years, three months after that; employers can pay salary in lieu.
• Valid dismissal causes. Serious misconduct (fraud, disclosure of trade secrets, violence), gross negligence, or long unexcused absence; redundancy requires Ministry approval and social dialogue steps.
• Severance. No statutory payout for lawful terminations, but unfair dismissal of an indefinite-term employee triggers two months’ pay per year of service, plus compensation for unused leave.
• Disputes. Labor offices mediate first; unresolved cases move to Labor Courts, where judgments can include reinstatement and back wages. Written warnings and inquiry records are essential evidence.

Visas and work permits for foreign employees

Any non-Egyptian who will receive a salary in Egypt is required to obtain an entry visa and a work permit, which the Ministry of Manpower issues. Most employers start by flying the hire in on a tourist visa, then file the work permit package within 30 days of arrival. The Ministry issues a receipt that doubles as temporary authorization, so the employee can begin work while the application moves through the system.

Processing usually spans two to three months. Renewals are annual and tied to a quota. Foreigners may not exceed 10% of a company’s headcount or 20% of its payroll unless the Ministry grants an exemption. Employers handle every renewal, keep the employee’s residence permit aligned with the work permit, and cover all fees.

Visa sponsorship carries real obligations. Firms must track visa expirations, report job changes, and pay repatriation costs if a contract ends early. Failure can trigger fines or a freeze on future sponsorships, so many multinationals lean on an Egyptian EOR to steer the paperwork and keep headcount within legal limits.

Hire in Egypt with Pebl

Pebl’s global EOR services make Egyptian hiring as quick as approving an offer. Onboarding takes days, not months, and every contract, tax filing, and work permit renewal lands on our local experts’ desks, not yours. You guide the work; we shoulder the compliance, administer statutory benefits, and keep payroll perfectly aligned with Egypt’s evolving labor law. All the upside of new talent, none of the bureaucratic drag. Get in touch to learn more.

FAQs about hiring Egyptian talent

Global employers tend to circle the same questions before they post a first role in Cairo. Here are concise answers based on Egypt’s 2025 labor law overhaul.

Can I hire remote employees in Egypt without opening a local entity?

Yes, it’s common for employers to onboard Egyptian talent without establishing a local entity. The simplest route is to engage an EOR, who becomes the legal employer, registers the worker with social insurance, withholds taxes, and issues bilingual contracts, allowing you to manage the day-to-day work while remaining entity-free.

What is Egypt’s minimum wage in 2025?

The National Council of Wages has established a unified public sector minimum wage floor of EGP 7,000 per month (approximately 138$US) and introduced a new hourly minimum of EGP 28 for part-time roles. Employers must also budget for an annual wage bump of at least 3% on each work anniversary.

Do employees in Egypt receive bonuses?

Yes, Egyptian employees receive a compulsory 3% annual bonus, payable on the employee’s anniversary of hire. Many multinational firms layer on a discretionary Ramadan or year-end bonus to stay competitive, but only the 3% payment is mandated.

Is a written employment contract required?

Yes, written employment contracts are required between the employee and employer. Every employee must receive a signed Arabic or bilingual contract, filed with the social insurance office, within 15 days of their start date. Verbal terms can expose the company to open-ended liabilities under the new law.

How much notice is needed to terminate staff?

Indefinite-term employees are entitled to two months’ notice if they have under ten years of service and three months after that, or salary in lieu. Failure to meet this standard can lead to Labor Court orders for reinstatement plus compensation of up to two months’ pay per year of service.

This information does not, and is not intended to, constitute legal or tax advice and is for general informational purposes only. The intent of this document is solely to provide general and preliminary information for private use. Do not rely on it as an alternative to legal, financial, taxation, or accountancy advice from an appropriately qualified professional. The content in this guide is provided “as is,” and no representations are made that the content is error-free.

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