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Mercans CountryIntel ® Algeria Payroll And HR Insights

Mercans offers complete payroll, PEO and HR services in Algeria

Algeria is the largest country in Africa, the Arab world and the Mediterranean Basin and the tenth largest country in the world. After transitioning to a market economy in the early 1990s, the development of domestic industry was brought to the forefront in the government’s agenda. Over the last few years, new industrial strategies and a reform of the investment code have been undertaken in an effort to boost domestic industrial production. The action plan is based on three axes: natural resource development, densification of the industrial fabric and promotion of new industries (including ICT and automotive).

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Doing Business in Algeria

Algeria currently ranks 157 of 190 countries on the World Bank’s Ease of Doing Business index. The facilitation and promotion of investment in Algeria is supported by a number of investment bodies including ANDI (National Investment Development Agency), CNI (National Investment Council), FNI (National Investment Fund) and more. However, there are multiple challenges international companies face, in considering business in Algeria including language barriers, customs delays, protectionist trade policies and complicated start-up processes).

Entity Registration and Incorporation Requirements

Setting up a new business or expanding an existing one in Algeria is straightforward. Choose how your company operates from a range of entity types which suit your individual circumstance.

Banking

Banking Hours: 8:30 am to 4:30 pm

Working Week

The standard working week is from Monday to Friday from 8:00 am to 5:00 pm

Labor law

The principal piece of legislation is Law No. 90-11 (Algerian Labour Law). Generally, Algerian Labour Law sets out the minimum employment entitlements and standards. These can be exceeded to the employee’s benefit, by agreement between the parties but it cannot be excluded or reduced to the employee’s disadvantage.

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Main Industries

Petroleum, natural gas, light industries, mining, electrical, petrochemical, food processing

GDP Growth

6.40%

Dates & Numbers

dd/mm/yyyyy

Official State Name

People's Democratic Republic of Algeria

Population

43.85 million

Capital

Algiers

Major Languages

Arabic and Tamazight

Currency

Algerian Dinar (دج)

Internet Domain

.dz

International Dialing Code

+213

Algeria
Algiers, DZ
5:57 am, July 7, 2022
25°C
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Payroll

Employees may only be required to work overtime by their employer in exceptional circumstances. For companies that operate global payroll across multiple countries, it is worth noting that in Algeria, women are not permitted to work between 9:00 pm and 5:00 am unless specific exceptions are granted by the Labour Inspectorate where the nature of the activities require it. Further, the law does not provide for reduced hours during Ramadan.

It is acceptable to provide employees with online payslips

Payslip

Payroll reports must be kept for 40 years

Reports

Employees receive paid annual leave of 30 days

Annual Leave

During the first 15 days the employee receives compensation

Sick Leave

14 weeks of paid maternity leave and 3 days of paternity leave

Maternity

6 months

Employee Termination

-

Employee Deduction

20000 DZD per month

Minimum Wage

Any work exceeding the standard 8 hours is compensated as 50% to employees

Overtime

Employees receive severance pay only if they have worked for at least two years

Final Pay

Tax and Social Security

Individuals could be subject to tax on their worldwide income (if considered as Algerian tax residents) and on their income sourced in Algeria (if not considered as Algerian tax residents). Regardless of their nationality, employees benefit from social welfare which includes social insurance covering sick leave, maternity benefits, invalidity and death insurance, pension, insurance in the event of an accident, family allowances and unemployment insurance. The employer is obligated to contribute 26% of the employee gross salary (employer contribution) and 9% of the gross salary (employee contribution).

Tax

Corporate entities are taxed on activities performed in Algeria through two regimes: standard tax regime (applicable for all tax resident companies) and the withholding tax (WTH) regime. Foreign companies with permanent business premises in Algeria are subject, as are Algerian companies, to the common law system. This includes IBS (corporate income tax), IRG (income tax), TAP (turnover tax),  VAT (value added tax) and property tax). The tax system applicable to foreign companies that do not have permanent business establishments in Algeria varies according to the nature of the business.

26%

Corporate Income Tax

35%

Personal Income Tax

19%

Sales Tax

19%

VAT

Social Security

There are four national funds, that is, CNAS (Caisse Nationale d’Assurances Sociales des Travailleurs Salaries) which is the National social insurance fund for salaried employees, CNR (Caisse Nationales de Retraites) which is the National Pension Fund, NACC (Caisse Nationale de l’Assurance Chomage) which is the National Unemployment Insurance Fund and CASNOS (Caisse Nationale de Securite Sociale des Non-salaries which is the National Social Security Fund for Non Employees.

35%

Social Security Rate

26%

Social Security Rate for Employers

9%

Social Security Rate for Employees

Employment Law

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Employment Agreement

An employee may be employed on probation for up to six months although highly qualified individuals may be subject to probationary periods up to 12 months.

Working condition

Protection applies to both trade union and worker representatives. Where an employee is required to work additional hours, they are entitled to overtime pay. If required to work on their weekly day off, they must be granted another day off (in lieu) and 150% off their wage for the overtime period.

Leaves

Algerian Labour Law provides a minimum entitlement of 30 calendar days paid annual leave. However, employees working the South wilayas (provinces) are granted an additional ten calendar days’ paid annual leave. As for sickness, sick pay and reimbursement of medical expenses are funded by the National Fund of Social Security, based on the mandatory social contributions.

Employment termination

Termination of the work relationship is regulated by Algerian law and the main reasons for termination include the end of the short-term contract, resignation, dismissal, total incapacity to work, employer ceasing legal activities, retirement or death. Fixed term contracts terminate on expiry. Unlimited term contracts may only be terminated for cause or redundancy. Where termination is done for reasons other than the above or where it takes place without the correct procedures being followed, it is deemed abusive. As such, compensation of no less than six months salary (where reinstatement is not possible) and uncapped damages may be determined by the court.

6 months

Minimum notice period for terminating an employee

9

Total number of public holidays

40

Working hours per week

3 days

Total number of days for Compassionate & Bereavement Leave

Immigration

Travel to Algeria requires a visa which may be granted for three months,six months, a year or two years. It includes periods of stay up to 90 days while the cumulative presence can go up to 180 days per year. A work visa is issued based on a contract of employment and a provisional authorisation of work prior to the work permit issued. A temporary work visa may also be issued to a foreign national who is a party in an assistance or service contract concluded by himself or his employer.

Residency permits

A work visa is issued on presentation of an employment contract and a provisional work authorization prior to the work permit. A work permit, valid for two years, shall be issued by the competent employment department

Work Permit validity

12 months

Required Documents

An original passport valid for at least six months after entry into Algeria and with at least one blank passport page for the visa

A completed and signed visa application form

A passport-sized photo taken within the last three months

An invitation letter issued by an Algerian host, which could be the applicant or travel agency

Copy of the host’s identification, passport or consular card

Proof of employment status (such as the company’s documents or a letter from the applicant)

Proof of adequate financial means (such as a bank statement or payslip)

Plane tickets or itinerary

Proof of payment of the visa fee

Compliant, reliable, error-free and touchless payroll in Algeria

Build the best team and hire top talent compliantly in Algeria. Get in touch with Algeria payroll outsourcing & PEO specialists for a free consultation!

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This document was prepared for informational purposes only. As local laws & regulations keeps on changing. Please consult your tax & legal advisors as well.
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