Summary

Expanding into Egypt offers businesses access to a dynamic market and a skilled workforce. However, understanding and adhering to the HR compliance in Egypt requirements is crucial for successful operations.

This guide provides an in-depth overview of HR in Egypt, covering employment contracts, working hours, compensation, benefits, termination procedures, and recent legislative updates.

Types of Employment Contracts

Egyptian labour law recognizes two primary types of employment contracts: 

1. Fixed-Term Contracts: These specify a definite duration for the employment relationship, typically up to five years. They are renewable upon mutual agreement. 

2. Indefinite-Term Contracts: These do not have a predetermined end date and continue until either party decides to terminate, following the legal procedures outlined in the labour law. 

Probation Period

The probation period in Egypt is limited to a maximum of three months. During this time, either party can terminate the employment relationship without prior notice, provided that the reason for termination is valid and not arbitrary. 

Working Hours and Overtime Regulations 

Egyptian labour law stipulates a standard workweek of 48 hours, typically spread over six days, with a maximum of eight hours per day. However, it is common practice in Egyptian companies to follow a 40-hour workweek. 

Overtime Compensation 

Employees who work beyond the standard hours are entitled to overtime pay: 

• Daytime Overtime: Compensated at 135% of the regular hourly wage. 

• Nighttime Overtime: Compensated at 170% of the regular hourly wage. 

• Work on Rest Days or Public Holidays: Employees working on national holidays receive 300% of their standard daily salary. 

Rest Periods 

Employees are entitled to a minimum one-hour break after five consecutive hours of work. Additionally, they must receive at least one full day of rest after six continuous workdays. 

Minimum Wage and Compensation

As of March 2025, the Egyptian government has set the minimum monthly wage for private sector workers at 7,000 Egyptian pounds. This adjustment reflects ongoing efforts to standardize compensation across sectors and address economic conditions. 

Factors Influencing Wage Determination

Wage determination in Egypt is influenced by various factors, including: 

• Economic Conditions: Inflation rates, economic growth, and productivity levels. 

• Cost of Living: Higher wages are often observed in urban centers with elevated living costs. 

• Industry Standards: Wage levels may vary across different sectors based on demand and profitability. 

Employee Benefits and Leave Entitlements

Employees in Egypt are entitled to various benefits and leave provisions, including: 

• Annual Leave: Employees who have worked for at least one year are entitled to 21 days of paid annual leave. This increases to 30 days after ten years of service or upon reaching the age of 50. 

• Sick Leave: Employees are entitled to up to 180 days of sick leave per year. Compensation is structured as follows: 

• First 90 days: 75% of the salary. 

• Subsequent 90 days: 85% of the salary. 

A certified medical report is required to validate the need for sick leave.

• Maternity Leave: Female employees are entitled to 90 days of maternity leave, provided they have been with the employer for a minimum period as specified by law. During this leave, they receive full compensation. The draft labour law proposes increasing maternity leave to four months, with at least 45 days post-childbirth. 

• Paternity Leave: The draft labour law introduces a one-day paternity leave upon the birth of a child. 

Social Insurance and Taxation

Employers in Egypt are obligated to contribute to the national social insurance system on behalf of their employees. This system covers pensions, disability, and other social security benefits. Both employees and employers are required to make contributions to the social security system of 11% and 18.75%, respectively. 

Tax remittance adherence is key to HR compliance in Egypt, requiring ongoing vigilance and audits. 

Termination Procedures and Employee Rights 

Terminating an employment relationship in Egypt requires adherence to specific legal procedures to ensure fairness and compliance: 

• Notice Periods: The required notice period depends on the employee’s length of service. For employees with less than ten years of service, a two-month notice is mandatory. This extends to three months for those exceeding ten years of service. 

• Severance Pay: Employees dismissed without just cause may be entitled to severance pay, the amount of which is determined by their tenure and the circumstances of termination. 

• Dispute Resolution: Employees have the right to challenge unfair dismissal through labour offices or the judiciary. Employers should maintain comprehensive records to substantiate the reasons for termination. 

Leveraging Employer of Record (EOR) Services

Navigating HR compliance in Egypt can be complex, especially for foreign enterprises unfamiliar with local laws and bureaucratic systems. Partnering with an Employer of Record (EOR) can significantly simplify these challenges. An EOR serves as the legal employer on behalf of the company, handling everything from employment contracts and payroll to social insurance contributions and regulatory filings. This allows international businesses to expand into Egypt without establishing a local legal entity, while remaining fully compliant with HR compliance in Egypt laws. 

Suggested Post: Employer of Record Services in Egypt 

Common HR Compliance in Egypt Pitfalls

Despite best efforts, many organisations still encounter compliance challenges in Egypt. Here are some frequent pitfalls to avoid: 

• Improper Contract Documentation: Failure to draft contracts in Arabic or include mandatory clauses can result in regulatory fines or employee disputes. 

• Non-compliance with Working Hours and Leave Policies: Not aligning with statutory limits on working hours, or denying employees their entitled leave, can quickly escalate into legal issues. 

• Incorrect Social Insurance Contributions: Miscalculations in contribution rates or delays in payment to the National Organisation for Social Insurance (NOSI) may result in penalties. 

• Dismissals Without Cause: Terminating employees without adhering to proper procedures can lead to litigation or arbitration cases that damage company reputation. 

Understanding these pitfalls—and proactively managing them—is critical to achieving robust HR compliance in Egypt. 

Suggested Post: Payroll Services in Egypt 

By implementing these steps, businesses can build a sustainable foundation for growth in Egypt while ensuring full HR compliance in Egypt.

Conclusion

In today’s interconnected world, Egypt presents a valuable opportunity for businesses looking to expand into North Africa and the Middle East. However, that opportunity comes with the responsibility of ensuring full HR compliance in Egypt.  

Whether you’re a multinational entering the market or a regional firm scaling operations, prioritising HR compliance in Egypt is essential not just to avoid legal risk—but to cultivate a stable, motivated workforce that contributes to long-term success. 

Employers should consider tools like EOR services and HR tech, while also staying educated on legal updates. This approach will not only keep businesses compliant but also position them as attractive employers in an increasingly competitive labour market.

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