How to Hire Remote Employees In 

Egypt

The Basics

Currency
Egyptian Pound (EGP)
Employer Taxes
27%
Payroll Frequency
Monthly
Official Language
Modern Standard Arabic

Employment in 

Egypt

Hire Independent Contractors

Independent contractors or freelancers are self-employed individuals who provide services to companies as a non-employee. This is one of the most common ways companies tend to hire non-local designers, engineers, support reps, etc.

For legal and tax purposes, independent contractors are not classified as employees. They may work for multiple clients, set their own work hours, negotiate their pay rate, and decide how a job gets done.

For example, the IRS says that if an independent contractor or freelancer does work that can be controlled (what will be done and how it will be done) by an employer then they are, in fact, classified as an employee.

As you can imagine, hiring someone as an independent contractor versus an employee is a fine line to tread.

While there are benefits when you choose the contractor route, there are quite a few drawbacks to consider and you’ll need to weigh them carefully to determine the best fit for your company.

Benefits of Hiring Independent Contractors
Reduced overhead: Lower cost in expenses, payroll, benefits, and more.
Greater flexibility: Contractors can be brought on as-needed. If not a good fit, you simply don’t have to move forward with the contract.
Reduced legal risk: Contractors aren’t usually protected by employment anti-discrimination and workplace safety laws.
Disadvantages of Hiring Independent Contractors
Risk of Misclassification: Not only does this deny workers their proper protections, it can also result in steep penalties and damage to your company. If the IRS determines that employee misclassification has occurred, you will be liable for a percentage of the employees wages, FICA contributions, penalty fines, unpaid taxes, up to a year in prison, and more.
Lack of Control: Contractors are drawn to being independent because it gives them greater control over the work they perform and who they work with. Because they’re not employees, you can’t tell them what to work on and how it should be done.
Lack of Loyalty: Contractors come and go as-needed. Many companies hire contractors for short-term work, which makes it difficult to cultivate loyalty.
Increased Scrutiny: Using Independent Contractors typically leads to an increased risk of being audited.

Set up a subsidiary in 

Egypt

A foreign subsidiary is a company that operates overseas as part of a larger company who’s HQ is in another country.

Establishing a foreign entity is great for having an international presence and accessing new markets. Though, setting up a subsidiary in Egypt can be expensive, stressful, and time-consuming. It's not for the faint of heart.

To set up a subsidiary in Egypt, you have to:

  1. Register your business name and file articles of incorporation
  2. File for local bank accounts
  3. Learn and keep track of the local employment laws
  4. Set up local payroll
  5. Hire local accounting, legal, and HR people

If you're lucky, this process can take months. If you're not so lucky, it can take up to a year. And on average, it costs about $50k-$80k, all-in-all, to get setup. And that's just for Egypt.

Use an Employer-of-Record (EOR)

An employer-of-record (EOR) is a company that hires and pays an employee on behalf of another company.

An EOR is typically used to overcome the financial and regulatory hurdles that often come with employing remote workers.

Each country has its own payroll, employment, and work permit requirements for non-resident companies doing business in their jurisdiction. Meeting those demands can be a huge obstacle when it comes to hiring remotely.

At Panther, we help companies employ and pay people in over 160 countries, without having to set up a foreign subsidiary. Payroll, benefits, taxes, compliance, and more are all handled by us, at a fraction of the cost.

Outside of saving you months and tens of thousands of dollars, other advantages of using Panther are:

  • Ability to attract talented and motivated employees from all over the world.
  • Full legal compliance: There is no risk of violating local employment laws.
  • Transparency: Employees are still your employees. All the work, processes, operations and day-to-day business belong to you, the company, just like with any other employee. Panther just takes on all of the responsibilities, obligations and admin work related to your team's employment.
  • No risk of misclassification

Because you no longer have to set up your own subsidiary, you’ll save a ton of time and tens of thousands of dollars using Panther.

Paying Remote Employees

Paying employees in Egypt is not the same as paying workers in your own country. Employees have to be paid using Egypt’s employment and payroll standards.

This means that you have to know, understand, and keep up with 1) fluctuating currency changes, and 2) local payroll and tax laws in the countries you’re looking to hire in.

Outside of the laws and regulations around payroll, there may be different conditions surrounding leave, overtime, termination, and more. As you can imagine, maintaining this kind of regulatory knowledge can be challenging. But it is crucial and necessary to follow local legislation.

After, you’ll have to determine the best way to pay your international employees. This can be done in a number of ways, including but not limited to:

Pay through a local entity

One of the most challenging (and expensive) parts of paying international employees is setting up the infrastructure to do so.

Before you start to run payroll, you have to register your company as the local employer in the country the worker resides in. As you can see in the “Set up a subsidiary” section, this is a multi-step process that can take up to a year and put you on your way to bankruptcy.

Work with an EOR

Outside of EORs acting as the full admin employer, many also provide remote payroll.

For example, at Panther, in just 1-click, you’re able to pay your entire global team, anywhere in the world. We send you an invoice each month, charge you in US Dollars, and pay your employees the same amount in their local currency.

We factor in currency fluctuations and use the mid-market rate plus any applicable fee passed on by our provider at cost at the time of billing.

Egypt

 Specific Information

Working Hours

A full workday in Egypt is 8 hours.

Overtime

Overtime is paid at the rate of 135% of the normal pay during daytime hours and 170% during night hours.

Payroll Tax

Employer

  • 27% - Employer Contributions

Minimum Wage

The minimum wage in Egypt is 2,000 EGP per month.

Payroll

Pay Cycle

The payroll cycle is monthly and wages must be paid by the 5th of the following month.

13th Salary

There are no provisions in the law regarding 13th salaries.

Leave

Paid Time Off (PTO)

In Egypt, annual leave is 21 days. Entitlement begins after 6 months of service. 

If the employee has been employed for over 10 years, annual leave is 30 days.  

Employees over the age of 50 are entitled to 30 days of leave.  

Public Holidays

There are 13 public holidays.

Sick Days

An employee is able to claim up to 6 months of paid sick leave and must provide a certificate of sickness.

  • For the first 90 days of sick leave, the employee entitled to 75% of their salary.
  • For the following 90 days, the employee is entitled to 85% of their salary.
  • If necessary, the employee may convert their annual leave days to sick leave.

Maternity Leave

Female employees that have been contributing to social insurance to the past 10 months are entitled to up to 3 months’ maternity leave for each child up to three children and are entitled to 75% of the last salary.   

Upon return to the workplace, the woman is entitled to 2- half-hour nursing breaks or a combined hour each day for 24 months after the date of birth.   

For workplaces with more than 100 employees, it is mandatory that the employer provide an in-house nursery or is responsible for placing the child in nursery care until the age of schooling. 

Paternity Leave

There are no provisions in the law regarding paternity leave.

Parental Leave

If there are more than 50 employees in the company, the mother is entitled to 24 months of unpaid leave for each child.

For employees who have dependents, the ability to work flexible hours is not mandatory, however, in many cases, will be stipulated in the employment contract. 

Other Leave

Work-related injury leave: For temporary disability, 100% of the wage is paid from the first day of injury until the employer is cleared to return to work or is declared permanently disabled. 

Marriage Leave

None.

Bereavement Leave

None.

Termination

Termination Process

It is very difficult to terminate an employment contract before the expiry date of the contract and is generally considered wrongful termination unless the dismissal is based on a “fundamental breach” of contract which is outlined as follows:

  • Falsifying/forging identification
  • Violation of safety instructions
  • Absence of 20 or more non – consecutive days or 10 consecutive days in a year
  • Disclosure of employer secrets that cause significant loss
  • Competing with the employer in the same field of work
  • Intoxication during work hours
  • Physical altercations with the employer or other employees
  • Professional incompetence

Termination for a definite employment contract without a justified cause: The employer must pay the employee what they would have received if they would have fulfilled their employment contract.

Termination of employment of an indefinite contact without a justified clause: Employer is obligated to pay compensation of no less than 2 month’s salary for each year that the employee served.

In the case of unfair dismissal, compensation shall be agreed upon, however, cannot be less than 2 months’ salaries.

Notice Period

The length of the notice period depends on how long the employee has been in service:

  • Less than 10 years - 2 months
  • More than 10 years - 3 months

Severance Pay

Severance payment is not mandatory in Egypt unless outlined in the employment contract.

Probation Period

Up to 3 months.