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Global Payroll Team
Written by Global Payroll Team
Last updated May 1, 2026
Expert Reviewed
Payroll in Egypt
EOR in Egypt
PEO in Egypt

Egypt map

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Mercans offers complete payroll, PEO and HR services in Egypt

With a large economy, strategic location and extensive reform agenda, Egypt remains one of the most important countries in the Middle East and Africa for investment and expansion. Its infrastructure projects, consumer market, industrial base and skilled workforce continue to attract international businesses across sectors including manufacturing, logistics, ICT, tourism, healthcare, education and agribusiness.

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Doing Business in Egypt

To attract investment, Egypt continues to offer several investment regimes, including free zones and investment zones, together with incentives and guarantees for qualifying projects. Foreign investors may benefit from residence facilitation linked to projects, while foreign workers may obtain residence and work authorization based on business needs and the applicable approval process. Leading sectors include agriculture, construction, transport and logistics, communications and IT, education, healthcare and tourism.

Entity Registration and Incorporation Requirements

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

Banking

Banking Hours: 8:30am to 2:00 pm from Sunday to Thursday

Working Week

The standard working week is generally 40 hours, usually from Sunday to Thursday.

Labor Law

Employment relationships in Egypt are mainly governed by Labor Law No. 12 of 2003 and related legislation, together with social insurance and immigration rules. Egyptian labor law is generally regarded as employee-protective and regulates working time, leave, wages, termination and workplace rights.

Main Industries

Textiles, food processing, tourism, chemicals, construction, logistics, communications and information technology

GDP Growth

2.4%

Dates & Numbers

dd/mm/yyyy

Official State Name

The Arab Republic of Egypt

Population

108.75 million

Capital

Cairo

Major Languages

Arabic

Currency

Egyptian pound

Internet Domain

.eg

International Dialing Code

+20

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Egypt
Cairo, EG
7:01 pm, May 13, 2026
33°C
clear sky
14 %
Wind Gust: 0 mph
Clouds: 0%
Sunrise: 6:03 am
Sunset: 7:39 pm

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Payroll in Egypt

Mercans is a leading payroll provider in Egypt, offering reliable and efficient payroll services to companies in need of expert guidance and support. Through the combined experience, expertise, and smart technology of our Egypt payroll team and our outsourced payroll software, we offer industry-leading outsourced payroll services to our clients. As a leader in the field of payroll outsourcing, Mercans is one of the biggest payroll companies in Egypt, and one of the most successful, globally.

As for payroll in Egypt, we can streamline complex and time-consuming payroll processes such as payroll reporting, social insurance administration, salary tax withholding and end-to-end payroll operations for you. With the help of our payroll experts, you can get real-time answers to any questions you might have on payroll-related matters when you are working with us as your dedicated payroll provider.

With our tailored services, you’ll have more time to pursue your core business activities.

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Payroll

Generally, payment may be calculated as a fixed amount or based on time worked or measurable output. Commissions, bonuses and gratuities may also form part of wages. Where salary is based on output or commission, the total paid per month must still comply with applicable minimum wage standards.

It is acceptable to provide employees with online payslips

Payslip

Five years

Reports

Employees are entitled to 21 days of paid annual leave for a single year

Annual Leave

Employees are generally entitled to paid sick leave under the Labor Law and Social Insurance rules, and the payment level may vary depending on the duration and the applicable statutory basis

Sick Leave

120 days of paid maternity leave are available and there is no general statutory paternity leave entitlement

Maternity & Paternity Leave

Two months’ notice is required for employees who have worked less than 10 years

Employee Termination

A 13th month salary is not mandated by law

13th month salary

8,000 EGP per month

Minimum Wage

If an employee works overtime on ordinary working days, they are generally entitled to at least 135% of normal wages, with higher rates applying in other cases such as weekly rest days

Overtime

No general statutory severance pay provision applies in the same way as in some other jurisdictions, but compensation may arise depending on the termination scenario

Severance Pay

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Employer of Record (EOR) in Egypt

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Mercans’ Employer of Record services in Egypt provide companies with a reliable and compliant solution to manage their workforce without setting up a legal entity or subsidiary. With Mercans’ EOR in Egypt, you can simplify the onboarding of your remote team, manage their payroll and benefits in a compliant manner.

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With the help of our international network, we simplify the global expansion process for you. Mercans is also regarded as a highly trustworthy, efficient, and top EOR provider in Egypt.

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Our talented staff is available at every level of experience, so you can find the right person for your role with Mercans. Mercans’ local network and global infrastructure allow it to perform activities such as hiring, managing contracts and payrolls, onboarding, and employee record management, so you can focus on your organization’s core business goals.

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PEO in Egypt

Mercans’ Professional Employer Organization services in Egypt provide companies with a flexible and cost-effective solution to establish a local presence and manage their workforce without the need for legal entities or subsidiaries.

With Mercans PEO in Egypt, you can simplify your HR and payroll operations with our game-changing EOR and PEO services. Providing employee benefits, payroll administration, and compliance with Egyptian labor laws, Mercans ensures a seamless HR experience as a PEO provider in Egypt. By working with Mercans, companies can focus on their core business activities while leaving the HR and payroll responsibilities to the experts.

Partnering with our PEO in Egypt presents the fastest and most cost-effective way to enter the Egyptian market.

Contact us to discover how our PEO Egypt solutions can support your business expansion with ease and compliance!

Benefits of Hiring an employee through a Egypt PEO

Egypt offers a gateway to both Middle Eastern and African markets, supported by a growing economy, a young workforce, and increasing foreign investment. Partnering with a PEO in Egypt allows you to tap into these opportunities without the burden of setting up a local entity. Here’s how:

Strategic Entry to MENA and Africa

Egypt’s geographic and economic position makes it a launchpad for regional operations. A PEO Egypt partner helps you establish a presence quickly, giving you a first-mover advantage in a competitive market.

Local Employment Law Navigation

Egyptian labor laws can be intricate, especially around probation periods, social insurance, and end-of-service settlements. A PEO ensures full compliance while adapting employment contracts to local legal frameworks.

Streamlined Workforce Onboarding

With a large pool of skilled, cost-effective talent, Egypt is an attractive location for businesses across industries. A PEO in Egypt enables fast, compliant hiring without delays in processing employment paperwork or tax registrations.

Optimized Payroll and Tax Administration

From payroll calculations and tax withholdings to social insurance contributions, a PEO simplifies payroll processes and ensures accurate, on-time payments while staying aligned with Egyptian labor law updates.

Mitigated Legal and Operational Risk

Employment-related disputes and compliance issues can be time-consuming and expensive. A local PEO takes on the legal burden, reducing your exposure and ensuring smooth employee management.

Support for Localization Goals

If your expansion strategy includes developing local teams or adapting to Egyptian business culture, a PEO helps align your HR approach with local expectations, strengthening brand perception and employee engagement.

Scalable Growth

Whether piloting operations or scaling a full team, PEO Egypt services offer the flexibility to grow without committing to long-term infrastructure or in-house HR teams.

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Tax and Social Security

Individual income tax is imposed on income of resident individuals and, in certain cases, on income earned outside Egypt where the center of professional activities is in Egypt. Non-residents are generally taxed on Egypt-source income. Social insurance applies to covered employees, subject to annual minimum and maximum insurable wage limits.

Tax

Egypt applies a 22.5% corporate income tax rate to most companies. Personal income tax is progressive and can reach 25%. The standard VAT rate is 14%.

22.5%

Corporate Income Tax

25%

Personal Income Tax

14%

Sales Tax

14%

VAT

Social Security

Social insurance contributions are subject to minimum and maximum insurable wage thresholds that continue to increase annually under the current framework. For covered employees, employer and employee contribution rates apply to the social insurance salary within the statutory limits.

29.75%

Social Security Rate

18.75%

Social Security Rate for Employers

11%

Social Security Rate for Employees

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Employment Law

The primary government agencies and entities responsible for enforcing employment laws and regulations include the Ministry of Labour and the Social Insurance Organization.

Employment Agreement

Employment contracts are required to be in writing, in Arabic and in multiple originals for the employer, employee and social insurance office. Contracts can be drawn up for definite and indefinite timeframes or for the fulfillment of specific work.

Working condition

Most private sector employees work five days a week, usually Sunday to Thursday. Working time is generally limited to 8 hours a day or 48 hours a week, subject to sector-specific rules and overtime requirements.

Leaves

All private sector employees are entitled to a minimum of 21 days of annual paid leave. Employees engaged in hazardous activities are entitled to additional leave. There are also other leave categories for sickness, maternity, pilgrimage, study and national holidays.

Employment termination

Where the term of the employment contract is not defined, either party may end the employment relationship by providing written notice. Notice periods cannot generally be reduced but can be increased if both parties agree. Disputes may be referred to the competent authorities and dispute resolution mechanisms under Egyptian law.

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2 months

Minimum notice period for terminating an employee

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14 days

Total number of public holidays

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40

Working hours per week

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Varies

Total number of days for Compassionate & Bereavement Leave

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Immigration

Every foreigner who stays in Egypt must generally have a valid residence permit and appropriate immigration status. A foreign national may work in Egypt if they obtain the required work permit and related residence authorization.

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Residency permits

There are different residence categories in Egypt depending on the legal basis for stay. For employment, the foreign national typically needs a work permit, after which the immigration status is aligned accordingly. Work permits are generally issued for one year and renewed annually, typically up to three years.

Work Permit validity

One year

Work Permit validity Required Documents

Completed application from the Ministry of Labour or the competent authority

Valid passport

Passport-size photos

Copies of the company’s incorporation documents

Copies of the employee’s academic degrees and certificates

Copy of the company’s commercial register

Professional license, if applicable

Memorandum justifying the company’s reason for hiring a foreigner

Approval from the related authority where required

Proof of a company representative acting on the employee’s behalf for the application

Medical test results where required

Proof of payment of the applicable government fees

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

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

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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    FAQs

    What is an Employer of Record (EOR) in Egypt and how does it support foreign companies?

    An Employer of Record in Egypt becomes the legal employer of your staff in the country, handling employment contracts, payroll, social insurance, tax filings and labor law compliance on your behalf. This allows your company to hire local talent without having to establish a full legal entity in Egypt.

    Why should businesses use an EOR instead of setting up a legal entity in Egypt?

    Using an EOR saves the business from the time, complexity and cost involved in forming a local company and setting up HR infrastructure. You gain quicker entry to the Egyptian market, avoid entity-setup overhead, and leverage local compliance expertise.

    How does payroll outsourcing in Egypt ensure compliance with tax and labor regulations?

    Payroll outsourcing in Egypt means the provider calculates salaries, withholds income tax, contributes to social insurance, issues payslips and manages statutory filings in line with Egyptian laws and regulations. This reduces risk of incorrect filings, penalties or legal exposure.

    Can an Employer of Record in Egypt hire employees and manage work permits for international companies?

    Yes. An EOR in Egypt can hire employees on behalf of a foreign company and assist with work permits or residence authorisations for non-Egyptian nationals. The EOR handles HR and payroll operations so the foreign company can focus on its core activities.

    What are the key benefits of using EOR and payroll services in Egypt for global expansion?

    Key benefits include fast workforce onboarding without entity formation, full local compliance, reduced administrative burden, access to local HR and payroll expertise, and the capacity to scale up or down in Egypt while focusing on your business growth.

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