Are you in need of new team members? Consider looking outside your borders and hiring international employees. Expanding your team with global talent has many benefits — you can bring in fresh perspectives, access new markets, save on labor costs, and more.
Egypt boasts a growing pool of highly skilled professionals, making it an attractive global outsourcing destination. It offers cost-effective talent with strong technical skills, particularly in IT and business process outsourcing (BPO).
If you’re interested in hiring employees from Egypt, it’s key to understand how much it costs. This guide will break down everything you need to know to budget effectively.
Costs to Consider
There are a number of costs to keep in mind when hiring employees from Egypt. Some are legally mandated, while others are optional but frequently offered. We’ll also go over some fringe benefits that can help attract and retain top talent.
Mandatory Costs
- Salary
- Taxes and benefits
- Paid time off
- Overtime pay
- Severance pay
Optional and Frequently Offered Benefits
- Extended health plan
- Added Benefits
- Bonuses, discounts, and rewards
Optional Perks
- Coworking space
- Health and wellness benefits
Mandatory Costs of Hiring in Egypt
To start, you need to take the following costs into account — there’s no way around it. So, make sure to budget for them to ensure you comply with local Egyptian laws and regulations.
Salary
As of January 1st, 2023, the minimum wage in Egypt rose to 2,700.00 EGP per month, equivalent to just under $90 USD. Employees who work the standard 42-hour work week, which equates to eight hours per day and five days per week, are entitled to receive this minimum wage.
It’s important to note that it’s wise to pay a more competitive salary than the minimum wage. The average salary in Egypt currently stands at approximately 9,200.00 EGP, which equates to just over $300.00 USD per month. High earners make about 41,100 EGP per month, which is just under $1400.00 USD.
Salaries on the high end in Egypt still only equate to a small fraction of salaries in the US and Canada. So, the cost of hiring an employee in Egypt allows you to hire top performers without making a huge dent in your budget.
Taxes and Contributions
Employers are required to make the following payroll contributions in Egypt, which equate to 19.75% of an employee's gross salary.
- 18.75%: Social Security (Minimum taxable wages is 1,700 EGP and maximum is 10,900 EGP):
- 1.00%: Emergency Relief (ER) Fund 1.00% of the basic social insurance salary (2,210 EGP):
Also, employers are charged a flat rate of 21% of the total maximum wage (i.e., EGP 10,900 as of January 2023) to cover the social security costs of any managers/board of directors whose names are included in the commercial register. When you’re thinking of hiring an employee from Egypt, it’s essential to keep these costs and contributions in mind.
Paid Leave
Employees in Egypt are entitled to the following types of paid leave from work.
Vacation: After one year of continuous service, employees in Egypt are entitled to take 21 days of paid vacation each year. Employees over 50 and those who have worked for one or more employers for more than ten years each receive 30 days. Once an employee has been employed for six months, they are eligible for a pro-rata allowance.
Sick leave: Employees are entitled to 90 days leave at 75%-85% of their salary if a medical authority deems them ill or incapacitated, paid for by the employer. Unused vacation days can also be converted to sick days.
Maternity and Parental Leave: New mothers are entitled to take four months off before and after birth and a maximum of 45 days off. This is only applicable to employees who have worked with their employer for at least ten months and provided a medical certificate with their expected due date. Eligible employees receive 100% of their salary during maternity leave, 75% of which is paid by social security and 25% from the employer. This cost is often lower than in other countries.
Women are only entitled to three maternity leaves over the course of their lifetime. Employers with over 50 employees are required to provide mothers with up to two years of unpaid leave for childcare. Female employees are entitled to take this leave twice during their service with an employer.
Public holidays: Egypt has 15 official public holidays. However, the exact number may vary depending on whether the holiday is observed as a national holiday or just a public sector holiday. Some of the major public holidays in Egypt include Eid al-Fitr, Eid al-Adha, and Coptic Christmas.
Overtime Pay
Employees who work over the standard 42-hour work week are entitled to receive overtime pay. The following rates apply:
- Dayshifts: 135% of their regular salary rate
- Night Shifts: 170% of their regular salary rate
Severance Pay
Employees who have completed at least one year of continuous service with a company are entitled to receive severance pay upon termination of their employment.
The amount of severance pay depends on the length of the employee's service and their salary at the time of termination. Specifically, the law states that employees are entitled to receive one month's pay for each year of service for the first five years and one and a half months' pay for each year of service thereafter. However, the maximum amount of severance pay that can be awarded is 12 months' pay.
It's worth noting that the Labor Law in Egypt applies to both foreign and domestic employees, but there are certain exceptions and variations based on the type of employment and the terms of the contract.
Optional Costs
Attracting in-demand talent in today’s job market isn’t easy. The ongoing labor shortage has companies locked in fierce competition around the world, making it increasingly important to level up. Consider implementing the following benefits to attract and retain top talent.
Benefits
Offering a solid benefits package shows job seekers and employees that you value your team. Many employers in Egypt offer private health insurance as a benefit to employees that provides additional coverage for medical expenses beyond what is covered by the public healthcare system. The type and extent of coverage offered by private health insurance plans may vary depending on the company and the specific plan.
An EOR, like Borderless, offers localized benefits packages that typically include the following:
- Medical Insurance
- Vision Insurance
- Dental Insurance
- Life Insurance
- Retirement Contributions
In addition to health insurance, it’s wise to add extra perks to your benefits package. Consider offering a health and wellness spending account, professional development opportunities, and monthly subscriptions. These are just a few attractive offerings that can help incentivize new hires.
Bonuses and Extras
Along with attracting top talent, bonuses come with a range of benefits. They help to improve retention rates, strengthen company morale, and boost productivity. Providing your team with a variety of generous bonuses shows them you value their hard work. There are a number to choose from, like signing, referral, and holiday bonuses.
Perks and Rewards
In addition to bonuses, many employers opt to provide their team with fun perks and gifts as a way to show their appreciation. For example, employers offer their workers rewards based on their interests, such as free sports tickets or live shows. They wine and dine employees and work to show them a good time outside of working hours.
Another approach many top companies take is to offer quality employees more paid time off and flexible working arrangements.
Workspace Costs
Working with a global team helps cut down on costs surrounding real estate, utilities, cleaning, office furniture, etc. In short, remote-first work can save you a ton. However, it is a good idea to put aside some money for your distributed team members' workspaces.
Many companies offer their remote employees a budget for their home office or set them up in a coworking space. These membership-based workspaces have been proven to help employees thrive and are available throughout Egypt’s big cities.
You can sign up for MQR, formerly AlMaqarr Coworking Space, in Cairo, which costs between 1500 and 2000 EGP per month, equivalent to about $50-65 USD. Woork Hub is another solid option that offers access for 90 EGP per day, which equates to the cost of a cup of coffee in North America.
Save with Borderless
Sign up with Borderless to learn everything you need to know about hiring in Egypt. Our intuitive platform and dedicated team will make sure you take care of your new teammates and maintain compliance every step of the way. Book a demo today.
Disclaimer
Borderless does not provide legal services or legal advice to anyone. This includes customers, contractors, employees, partners, and the general public. We are not lawyers or paralegals. Please read our full disclaimer here.
