Understanding Egypt’s labor law is crucial when hiring employees. The country has recently shifted its focus to aligning its labor standards and employee rights with international practices. We break down several pressing labor laws you must know when hiring in Egypt.
1. Employment Contracts
There are two main types of employment contracts: indefinite (permanent) and fixed-term. All employment contracts in Egypt must be written in Arabic. For employees who do not speak Arabic, a bilingual contract can be issued; however, the Arabic contract is prioritized in case of a dispute. Four copies of the employment contract must be prepared and issued to the employer, employee, social insurance office, and the relevant administrative body.
The contract must cover details, such as employee working hours, job duties, annual leave, and compensation. An EOR firm in Egypt assists with employment contract translation into Arabic and guarantees that mandatory clauses, as per the new Labor Law, are included.
2. Working Hours and Overtime
Egyptian employees work for eight hours per day or 48 hours per week. The workweek runs from Sunday to Thursday, with Friday constituting the weekend. Furthermore, employees must receive an hour-long break after a five-hour shift.
If employees work outside of the standard working hours, they are entitled to overtime pay. Daytime work is paid at a rate of 135% of the regular wage, whereas night work is paid at 170% of the standard wage. Employees who work on an official holiday are paid 300% of their regular wage. Overtime work cannot exceed 10 hours per day.
3. Minimum Wage
As of March 2025, the monthly minimum wage in Egypt is EGP 7000, which equates to $147.78. The minimum hourly wage for part-time employees has also been updated to EGP 28.
4. Employee Benefits
There are several mandatory employee benefits, including social insurance, paid annual leave, time off for holidays, sick leave, maternity leave, and health insurance. The new Labor Law has extended the maternity leave entitlement to four months, during which female workers receive their full salaries. Paternity leave has also been introduced, allowing fathers to take one day of paid leave for their child’s birth. Neither maternity leave nor paternity leave falls under an employee’s annual leave.
To attract talented employees, an EOR will advise on non-mandatory benefits, including bonuses, pilgrimage leave for qualifying workers, and additional private health insurance.
5. Payroll Tax or Social Contributions
The payroll tax in Egypt consists of personal income tax (PIT) and social security contributions. PIT is progressive, with rates increasing based on income. The 2025 law exempts individuals from paying PIT if they earn below EGP 40,000. For those who earn up to EGP 1,200,000, the income tax rate increases to 27.5%.
All Egyptian employers and employees are subject to paying monthly social security contributions. Employers contribute 18.75% of the employee’s gross salary, whereas the employee contributes 11% of their gross salary. Social security protects workers in the event of disability, illness, unemployment, and retirement.
In addition to social security, employers must pay for private health insurance for their workforce. The employer contribution is 3.25%, and employees contribute 1% of their gross wages to the health insurance scheme.
6. Termination and Severance Pay
Before terminating an employment contract, the employee must be given written notice. The length of written notice depends on the individual’s years of service; for example, an employee who has completed 10 years of service is entitled to two to three months’ written notice. The notice must be certified by the Egyptian employment office within 10 days of being issued. Instances of employee misconduct are subject to immediate dismissal.
Egyptian employees must receive severance pay if they are dismissed without a valid reason by their employer. They also receive severance if they resign due to company restructuring or changes in their daily working conditions. Severance is calculated based on the employee’s last wage. Employees are paid half a month’s salary for their first five years of service and then their full month’s salary for every year thereafter.
7. Foreign Workers
For employers to legally hire foreign workers in Egypt, the employee must first obtain a work permit from the Ministry of Manpower. It is the employer’s responsibility to provide the worker with an employment contract and proof of work visa sponsorship. Egyptian law requires that employers justify why an employee from abroad is necessary for the job. The country has introduced a foreign worker quota, which means that the total number of foreign employees cannot exceed 10% of all staff. A professional Egyptian EOR will ensure that employees have the necessary work permits and visas before legally working in the country.