Hire employees in Egypt
What a foreign company needs to know before employing people in Egypt under the new Labour Law No. 14 of 2025: whether you need a local entity, what an employee costs once social insurance is capped, how salary tax withholding works, why notice is now a flat three months, and how the foreign worker quota limits mixed teams. Written for CHROs, CFOs, General Counsel and founders.
Quick answers
The questions leadership teams ask first.
Do I need a local entity in Egypt to hire?
No. There are three routes:
- Employer of Record. Dryft Global employs the person through a compliant Egyptian employer registered with the National Organization for Social Insurance (NOSI) and the Egyptian Tax Authority (ETA), issues the Arabic contract the new labour law requires, and runs monthly payroll. You direct the work.
- Direct local entity. You incorporate through GAFI, then register for tax, social insurance and a bank account: budget two to three months before the first payroll.
- Independent contractor. Lawful only for a genuinely independent business. A full-time worker under your direction is an employee whatever the contract says.
When should I use an EOR instead of registering locally?
Use an EOR for your first hires and for offshore engineering, support or back-office teams of up to about 50 people. You start in days, avoid GAFI, NOSI and ETA set-up, and let a local employer handle the new labour law's formalities. Your own entity earns its keep for a large delivery centre, for ITIDA incentives, or when you will sell into the Egyptian market.
What does an employee actually cost beyond salary?
Less than most people expect on senior salaries. Employer social insurance is 18.75%, but only on an insurable wage capped at EGP 16,700 a month in 2026. On a EGP 60,000 salary that is about 5% on top. Below the cap, plan for about 19%. Private medical cover and a customary one to two month bonus bring the all-in figure to roughly 8% to 27% for professional roles.
How difficult is termination in Egypt?
Procedural and expensive without a clear reason. Notice is now three months for either party on indefinite contracts. Ending a contract without a legitimate reason costs at least two months' wage per year of service on top. Resignations must be certified by the labour office, which ends the old practice of undated resignation letters. Specialised labour courts started in October 2025.
Can Dryft Global legally employ my team in Egypt?
Yes. Dryft Global acts as the legal employer in Egypt. We issue four-copy Arabic contracts, register employees with NOSI within two weeks, withhold salary tax and file Form 4 quarterly, remit social insurance monthly, apply the mandatory 3% annual raise, and manage leave, notice and terminations under Labour Law No. 14 of 2025.
Hiring routes compared
Speed, local registration, tax administration and liability differ by route.
| Factor | Direct local entity | Dryft Global EOR | Independent contractor |
|---|---|---|---|
| Time to operational state | 2 to 3 months | Days to 2 weeks | Days |
| Local entity required | Yes, GAFI registration | No | No |
| Social insurance and salary tax | Your NOSI and ETA files | Handled by Dryft Global | Contractor self-reports |
| Statutory liability | Direct corporate exposure | Assumed by Dryft's local employer | High if reclassified |
| Best fit | Large delivery centre | Teams of 1 to about 50 | Discrete project work |
What an employee costs in Egypt
Egypt has one large employer contribution, social insurance, and it stops at a low monthly cap. That makes the statutory percentage fall sharply on professional salaries. The model below is a Cairo software engineer on EGP 60,000 a month in 2026.
| Component | Employer share | Notes |
|---|---|---|
| Social insurance | 18.75% | On insurable wage EGP 2,700 to 16,700 a month; employee pays 11% |
| Effective on EGP 60,000 | ~5.2% | EGP 3,131 a month, the 2026 maximum |
| Universal health insurance | 0% in Cairo | 4% only where the scheme is live, not yet in Cairo |
| Training Fund | EGP 10 to 30 | Per employee, employers with 30+ staff |
| Statutory subtotal | ~5% to 19% | About 5% above the cap, 19% below it |
| Private medical insurance | ~3% to 6% | EGP 20,000 to 40,000 a year, expected for tech roles |
| Customary bonus | 0% to 17% | One to two months is common, not statutory |
| Total employer on-cost | ~8% to 27% | Above base salary on the model salary |
For an employee on EGP 60,000 a month, budget roughly EGP 777,000 to 918,000 a year all-in before the EOR fee, about USD 13,900 to 16,400 at EGP 56 to the dollar. Salaries must be paid in EGP, so many employers set a USD reference and review quarterly. Ask us for a cost model with current rates applied.
Payroll and tax
Salaries are paid monthly in Egyptian pounds, and bank transfer is valid without a signed receipt under the new law. Salary tax is withheld every month and remitted within 15 days; the Form 4 payroll return is filed quarterly through the ETA portal. Social insurance goes to NOSI monthly, and new employees must be registered within two weeks of starting. Employers also file a statement of employees and wages within 30 days of starting operations and update it every January.
Progressive salary tax
Rates run from 0% on the first EGP 40,000 of taxable income to 27.5% above EGP 1.2 million, with a personal exemption of EGP 20,000 a year. High earners lose the lower bands: above EGP 600,000 the 0% band falls away. Employee social insurance is deducted before tax. On EGP 60,000 a month, net pay is about EGP 45,800.
Statutory minimum wage
The private sector minimum is EGP 7,000 a month gross, in force since 1 March 2025, with a part-time minimum of EGP 28 net an hour. The EGP 8,000 figure reported in 2026 is the public sector rate. Every employee is also owed an annual raise of at least 3% of insurable wage, with a EGP 250 floor, and the National Wages Council must now review the minimum at least once a year.
Leave and mandatory benefits
- Annual leave. 15 working days in year one, 21 days from year two, and 30 days after 10 years' service or from age 50. Employees with disabilities get 45 days, and remote or hazardous locations add 7. Balances must be settled at least every three years and on exit.
- Public holidays. About 14 to 15 days a year, including Coptic Christmas, Sham El-Nessim, Eid al-Fitr, Arafat Day and Eid al-Adha. Holiday work is paid double or compensated with a day off.
- Sick leave. Paid through the social insurance system as a percentage of insurable wage. Many employers top up to full salary for professional staff.
- Maternity. Four months fully paid, up to three times, with no minimum service. No overtime during pregnancy or for six months after birth.
- Paternity. One paid day on the day of birth, up to three times. New under the 2025 law.
- No statutory 13th month. Annual bonuses of one to two months and Ramadan bonuses are customary, not mandated.
- Working time. 8 hours a day and 48 a week, Sunday to Thursday in most offices. Overtime pays at least 35% more by day and 70% more at night, and rest day work is double pay plus a substitute day off.
- Supplementary benefits. Private medical insurance, transport and meal allowances, and power and internet backup for remote staff.
Termination and notice periods
Probation runs to three months and can be used only once with the same employer. After that, an indefinite contract can be ended only for a legitimate reason, with three months' written notice either way.
| Situation | Requirement |
|---|---|
| Notice, indefinite contract | 3 months, regardless of tenure |
| No legitimate reason | At least 2 months' wage per year of service |
| Fixed-term ended early by employer | 1 month per year of service |
| Economic termination (approved) | 1 month per year for 5 years, then 1.5 months |
- Resignations need certification. A resignation must be certified by the labour office before it is submitted, and the employee can withdraw it within 10 days of acceptance.
- Fixed-term contracts stay fixed-term. They do not convert to indefinite on renewal, but after five years the employee may leave on three months' notice without compensation.
- Pay in lieu is allowed. You can waive notice by paying the full remaining wages.
- Protected grounds. Termination for union activity, employee representation or complaints is prohibited, as is termination during maternity leave.
- New labour courts. Specialised courts started on 1 October 2025 and aim to decide dismissal cases within three months.
Can I use independent contractors?
Only where the person genuinely runs their own business: their own clients, schedule and tools, invoicing for output rather than a fixed monthly fee. Egyptian law treats anyone working under your management and supervision for a wage as an employee, whatever the label. Misclassification brings back social insurance at nearly 30% combined, fines of EGP 20,000 to 100,000 for unregistered employees, salary tax arrears, and claims for leave, overtime and termination compensation of at least two months per year. Supplying workers to others also needs a Ministry licence under Decree 272 of 2025. For anyone who works like an employee, an EOR is the compliant route.
The legal framework in brief
Egypt is a civil law system with one national labour code. Labour Law No. 14 of 2025 replaced the 2003 code on 1 September 2025, and dozens of ministerial decrees now fill in the detail. The instruments you will hear most:
- Labour Law No. 14 of 2025. Contracts, wages, hours, leave, termination, labour courts, remote and flexible work, and foreign work permits.
- Social Insurance Law No. 148 of 2019. Employer 18.75% and employee 11% contributions, insurable wage limits rising 15% a year, and coverage of foreign employees since 2021.
- Income Tax Law No. 91 of 2005 as amended by Law No. 7 of 2024. Salary tax bands, withholding and Form 4.
- Universal Health Insurance Law No. 2 of 2018. 4% employer and 1% employee, only in governorates where the scheme is live, plus a 0.25% revenue levy on all companies.
- Data protection. Personal Data Protection Law No. 151 of 2020, with executive regulations issued November 2025 and enforcement from about November 2026: licences, a data protection officer, 72-hour breach notices and permits for cross-border transfers.
- Immigration and right to work. Foreign workers are capped at 10% of the Egyptian workforce, each foreign expert needs two Egyptian assistants, and permits are renewed yearly under Decree 279 of 2025.
- Authorities. Ministry of Labour, NOSI, the Egyptian Tax Authority, GAFI and the Personal Data Protection Center.
Where the talent is
About 109.5 million people, a labour force of 35 million and more than 800,000 university graduates a year. Unemployment fell to 5.8% in mid-2026. Egypt's offshore services industry employs about 195,000 people across nearly 300 delivery centres and exported USD 5.2 billion in the 2025/26 fiscal year, with English, French, German and other language desks. Arabic is the official language and English is widely used in business. Time is UTC+2, with summer time from late April to late October, giving a working overlap with Europe and the Gulf. The constraint is currency: the pound has floated since March 2024, so salary reviews are frequent.
| Region | Talent and industry concentration |
|---|---|
| Greater Cairo and New Cairo | Software engineering, fintech, shared services, multinational regional offices |
| Smart Village (Giza) | Technology park: telecoms, IT outsourcing, global delivery centres |
| New Administrative Capital | Knowledge City, government and new corporate campuses |
| Alexandria | Customer experience and multilingual support centres, logistics |
Egypt Implementation Kit
This page tells you the rules. The kit tells you what to do, in what order, and what goes wrong when you skip a step.
- Step-by-step checklist, from route selection to first payroll
- Four-copy Arabic contract checklist under Labour Law No. 14 of 2025
- NOSI and ETA registration sequence with the monthly and quarterly calendar
- Salary tax worksheet with the 2026 bands and insurable wage cap
- Annual 3% raise and leave balance settlement tracker
- Notice, resignation certification and termination compensation pack
- Every official Egyptian authority with direct links
This guide is general information, not legal, tax or immigration advice. Insurable wage limits rise each January, the private sector minimum wage is now reviewed annually, and ministerial decrees under the 2025 labour law continue to be issued. Confirm current figures with a qualified adviser or with Dryft. Last reviewed November 2026.
Ready to hire in Egypt?
Tell us who you want to hire and where they sit. You will get a cost model and a compliant route within a day, from a person who has done this before.