Navigating the complex labour laws governing employment practices is essential when running Algeria payroll. However, building an in-house compliance team may not be the most efficient way to manage your remote team’s payroll in Algeria.

No matter their size, global companies rely on in-country expertise for localised payroll services, which is why Algeria payroll outsourcing is key. This is where a partner like Workforce Africa provides significant value in supporting global firms to maintain compliance when handling payroll in Algeria, addressing every intricate detail, including;

• Salary computation requirements,
• Taxation legislation specifics (social security, employee income tax, corporate tax, VAT and other employee deductions.
• Benefits administration, and more (health insurance, pension, paid leaves, holiday compensation

Workforce Africa simplifies hiring and payroll compliance for offshore talent management in Algeria. No need for a subsidiary or entity setup. From contracts and onboarding to taxes, payroll, and admin tasks, partnering with us – an Algeria Payroll outsourcing firm will help you focus on growth for greater levels of success.

Employment Contract Termination

In accordance with the laws of Algeria, employment contracts can be terminated by either party upon giving notice, usually at least a month, depending on the terms of the contract. The employer may also terminate an employee’s contract without notice if there is just cause, such as gross misconduct or breach of contract. Conversely, an employee may terminate their contract by resigning in writing, which must be acknowledged by the employer. It is essential to follow the proper procedures for terminating an employment contract to avoid any potential legal disputes or penalties.

Algeria Country Overview

The People’s Democratic Republic of Algeria lies in North Africa. It is predominantly an Arabic-speaking country. Two critical cities in Algeria are Algiers, the capital and the economic hub, and Oran. These urban centres act as transit points to ecotourism destinations and beach resorts. With a population exceeding 47.2 million people, Algeria boasts a significant demographic presence.

In recent years, key industries experiencing growth include renewable energy and agriculture. Algeria boasts a market-based, diversified economy comprising textile, construction, mining and services. Considerations such as the low labour cost and abundant natural resources make Algeria attractive for businesses seeking expansion opportunities.

Although Algeria possesses a highly skilled workforce, hiring and establishing a team can be time-consuming and challenging. However, partnering with an Employer of Record (EOR) or Professional Employer Organisation (PEO) in Algeria facilitates swift market entry. It manages all legal complexities associated with operations in the country.

Payroll Processing in Algeria

Local labour laws in Algeria govern payroll processing, with each employee’s salary potentially calculated differently. Due to compliance concerns, processing payroll at scale can become complex, cumbersome, and risky. Here are the phases of payroll processes global businesses should understand-:

• Pre-payroll Phase: Your organisation’s unique approach to payroll compliance shapes its policies and processes, including payroll preparation. Global firms must prioritise essential business elements in the pre-payroll phase, such as accurate business profile documentation and tailored work location policies, which is crucial. Customise leave and work policies to align with local standards in Algeria to ensure compliance and transparency while collaborating closely with compliance teams or partners to help adhere to statutory requirements throughout the payroll management process for your remote team. In this phase also, standardising compensation packages to conform with local payment norms, such as payment cycles, which enhance compliance and meet employee expectations, is necessary.
• Payroll Calculation Phase: Streamlining input collection and validation processes ensures accurate wage calculations in this phase of payroll processing. This phase involves the actual calculation of wages, with a primary focus on this task. Utilising software automation and digital document submission tools makes payroll calculations efficient and reduces the risk of human error in this process.
• Post-payroll Phase: The post-payroll phase in Algeria refers to the period after payroll processing, where employers review and settle any outstanding issues related to employee compensation, benefits, and taxes. This phase typically includes: salary payment, compliance reporting, benefit administration, audit and reconciliation. The post-payroll phase is crucial in Algeria as it ensures that employers comply with regulatory requirements, maintain a good employer-employee relationship, and reduce the risk of penalties or fines associated with non-compliance.

Payroll Components in Algeria

What Does Algeria Payroll Outsourcing Involve? Here are the key elements you need to navigate Algeria’s payroll compliance successfully:

• Salary/Wages
• Overtime benefits
• Social security contribution
• Paid leaves
• Paid holidays
• Payroll taxes
• Other laws

Navigating Algeria Payroll Compliance

Algeria’s employment regulation primarily revolves around Labour Law No. 90-11 of 1990 along with pertinent sections of other laws and acts. The Labour Law outlines critical aspects of payroll processing and compliance with crucial employment practices-:

• Salary/ Minimum Wage: A national minimum wage has not yet been officially established. However, the tax-exempt income threshold of 600 Birr is informally regarded as the minimum wage rate.
• Working hours: The standard workweek consists of 40 hours. With mutual agreement between the employer and employees, staff may work up to an additional two hours per day, 20 hours per month, or 100 hours annually as overtime.
• Social Security Contribution: The Employer contributes 26%, while the Employee pays social security contributions of 9% National Health Insurance Scheme.
• Health Insurance Scheme: In Algeria, employers are not mandated to provide health insurance to their employees. However, the Algerian National Social Security Fund (CNAS) administers two public insurance programmes:
  • Compulsory Health Insurance (CHI): Available to employees of public, non-profit, and commercial organisations.
  • Voluntary Health Insurance (VHI): Primarily designed to support workers in local communities who may lack other forms of coverage.
• Pension Contributions: Pension contributions are governed by Algerian Social Security Fund for employees in the public sector and National Retirement Fund for employees in the private sector.
• Payroll Taxes:

• Paid Leaves
  • Annual Leave: Employees are entitled to 30 days (approximately 4.5 weeks) of paid annual leave, which can be accrued over a 12-month period. However, employees working in the southern provinces receive an extended entitlement of 40 days (about 1.5 months) of paid annual leave.
  • Sick Leave: Employees are entitled to 15 days of paid sick leave, starting with half pay on the first day and increasing to full pay from the 16th day of illness or earlier if hospitalised. Sick pay and medical expense reimbursements are provided by the National Fund of Social Security, which is funded through mandatory contributions from both employers and employees.
  • Maternity Leave: Pregnant employees in Algeria are entitled to up to 14 weeks (approximately 3 months) of maternity leave, with maternity pay equal to 100% of their average regular salary. They must stop working no later than one week before delivery. To qualify for benefits within the first six months of employment, an employee must have worked at least nine days or 60 hours in the past three months, or 36 days (about 1 month and 5.5 days) or 240 hours in the past 12 months.
  • Paternity Leave: Fathers are entitled to three days of paid paternity (emergency) leave upon the birth of a child.
  • Special Leave: In Algeria, employees may be granted compassionate/ special leaves on some family events. Such leave shall be paid within the limits and deadlines specified. Public holidays are not fixed days and they can be changed according to the government decision.
• Paid Public Holidays: In Algeria, the paid holidays are as follows:
  • January 1: New Years Day
  • January 12: Agricultural New Years Day
  • May 1: Workers’ Day
  • Muharram 1st: Hijri New Years Day
  • Julu 5: Independence Day
  • May/June: Eid Al-Fitr (Shawwal 1-3)
  • Muharram 10: Achoura
  • June/July: Eid Al-Adha (Dhu-al-Hidja 10-13)
  • Prophet Mohammed’s birthday (Rabbi-al-Awwal 12th)
  • November 1: Revolution Day

Payroll Outsourcing in Algeria

Algeria payroll outsourcing also encompasses termination and probationary periods law. Employees are not generally eligible for severance pay, except the termination is unjustified, or the employer voluntarily decides to make severance payment.

Collaborate with an Africa employer of record and payroll solutions provider such as Workforce Africa to strategically outsource your payroll operations while ensuring compliance with local labour regulations. Additionally, leverage our flexible service offerings to expand your international teams as needed.