Employer of Record (EOR) in Egypt

An EOR in Egypt allows businesses to enter the market quickly and help maintain compliance with local laws, all while reducing the overhead costs of establishing a local entity. Atlas HXM offers a seamless EOR service that handles all aspects of employment including work permit sponsorship, from payroll processing to compliant administration.

Partner with Atlas HXM for a cost-effective, compliant solution to hire and manage your workforce in Egypt.

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Quick Overview of EOR in Egypt

Entering Egypt does not have to involve months of filings or a large upfront budget. An Employer of Record (EOR) allows you to hire locally without setting up a legal entity, while staying aligned with Egyptian labour requirements. The EOR becomes the employer on paper and manages payroll, taxes, benefits, and mandatory social insurance contributions, leaving you free to concentrate on operations instead of administration.

Creating a subsidiary in Egypt can run between USD 10,000 and USD 50,000 before you even account for legal counsel, HR staff, accountants, and ongoing filings and the process itself is paperwork-heavy. Choosing an EOR eliminates those setup and maintenance costs and gives you immediate entry without opening a physical office. This approach suits startups, SMEs, and market-testing teams that must move quickly and remain compliant with complex local rules.

Disclaimer: The contents of this article is not legal advice and should be used for reference only. If in doubt, please seek independent legal advice from a lawyer in the relevant jurisdiction.

What You'll Learn

  • Looking to hire in Egypt without the inconvenience and administrative burden of setting up a local entity? An EOR helps you onboard employees while maintaining compliance with payroll and local labor laws.

  • With a Direct EOR, you gain control, faster onboarding, and stronger compliance. It is ideal for businesses aiming to scale quickly.

  • On the other hand, an Indirect EOR may be more cost-effective but comes with slower processes and added complexity.

  • EOR service fees typically range from USD 500 to USD 1,200 per employee per month.

  • Atlas HXM offers a robust Direct EOR solution, providing smooth market entry, compliance, and seamless employee management: all in one platform.

How an EOR Works

At Atlas HXM, we provide EOR services that ensure your business remains compliant with Egypt's labor laws while you focus on growing your operations, free from administrative and legal burdens.

Candidate Selection

Atlas HXM does not recruit candidates, but will check the employment setup for compliance around new hires like validating right-to-work, reviewing contract terms against Egyptian rules, and configuring payroll and statutory obligations correctly. EOR providers in Egypt, including Atlas HXM, can sponsor work permits and visas. We assist with work permit applications through the Ministry of Manpower and Training Office for foreign nationals who need authorization to work in Egypt.

Employment Contracts

Atlas HXM drafts and administers employment contracts in compliance with the Egyptian Labor Code. Clearly outlines Key Employment Terms in Arabic as required by law, such as:

  • Job title and responsibilities

  • Salary, benefits, and working hours

  • Leave entitlements and notice periods

Payroll & Benefits Management

Payroll is processed in Egyptian pounds (EGP), including:

  • Accurate tax withholdings and social insurance contributions

  • Statutory benefits such as medical insurance

The EOR also helps maintain compliance with mandatory benefits, so employees are protected under Egypt's laws.

Work Permit Compliance

In Egypt, Atlas HXM can apply for and sponsor work permits for foreign nationals. We manage the entire process through the Ministry of Manpower and Training Office, ensuring compliance with the 10% foreign worker limitation and proper registration with the Directorate of Manpower and Immigration.

Ongoing HR Support

Provides HR support, including: Leave management and performance tracking and employee relations and regulatory updates throughout the employee's tenure. This allows businesses to focus on core operations, while Atlas HXM handles ongoing compliance.

Costs & Pricing

EOR services in Egypt are typically billed as a platform/service fee in the range of USD 500–1,200 per employee per month. This fee covers administration such as compliant contracts, payroll processing, statutory filings, and HR administration for workers. This service fee is separate from the employee's salary, benefits, taxes, and pass-related costs, which vary by role and jurisdiction. By using an EOR, companies avoid the cost and overhead of setting up an Egyptian entity, which can require USD 10,000–50,000 upfront before any operational spend.

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What to Choose: EOR vs PEO

EOR

Employer of Record

An EOR becomes the legal employer for your talent in a country where you do not have an entity. The EOR carries employer liability and handles compliant contracts, payroll, statutory benefits, tax filings, and labour-law adherence. You still direct the employee's work. This model suits companies expanding into Egypt without wanting to form a local entity or take on compliance risk.

PEO

Professional Employer Organization

A PEO provides outsourced HR services like payroll, benefits, HR admin, but only when you already have a local entity. You remain the legal employer, and the PEO shares administrative tasks without taking on employer liability. Suitable when you are already established in the country and are only looking to offload HR administration.

What’s Best for You?

  • Choose an EOR when you want to hire in Egypt without setting up an entity and want a partner who absorbs employer risk.

  • Choose a PEO when you already operate locally and just want HR support.

Work Life in Egypt

Egypt's employment framework is designed to balance operational needs with employee protections. Here's what you need to know:

Employment Types:

  • Permanent: Ongoing employment with full statutory benefits.

  • Fixed-Term: Hired for a specific project or defined duration.

  • Temporary: Short-term assignments; entitled to statutory benefits like leave and overtime.

Probation Periods: The probation period cannot exceed 3 months and must be outlined in the employment contract. These periods allow employers to assess employee suitability before offering permanent employment. Notice periods during probation range from 1 day to 1 week, and the EOR ensures that all terms are compliant with the Labor Code.

Working Hours & Overtime: In Egypt, the standard workweek is 48 hours, with a maximum of 8 hours per day. Employees must receive a break after working 6 consecutive hours. Overtime is paid at 135% of the basic hourly rate for daytime work, 170% for nighttime work, and 200% for work on holidays or rest days.

Leave Entitlements

Leave Type

Eligibility / Duration

Payment / Notes

Annual Leave

21 days (1st year), increases to 30 days after 10 years or age 50+

Paid by employer; accrual based on service length

Maternity Leave

90 days

Paid leave for female employees with 10+ months service

Paternity Leave

Not provided

Egyptian law does not mandate paternity leave

Sick Leave

After 3 months of service

Up to 180 days per year; 75% pay first 90 days, 85% next 90 days

Public Holidays

All statutory holidays

Paid; handled by Atlas HXM

Vacation Leave

As per company policy / statutory minimum

Paid; unused leave typically paid out upon termination

Payroll & Benefits: Wages must meet the minimum wage of EGP 7,000 per month for private sector employees (effective March 1, 2025). Atlas HXM manages payroll in EGP, social insurance contributions (9% employee, 12% employer), statutory benefits, bonuses, and private health insurance. Supplemental benefits can include transportation allowances, meal subsidies, and professional development options.

Atlas HXM can help you manage these aspects and can help ensure that employees are supported and compliant with Egypt's labor laws while businesses can focus on operations without administrative burdens.

More Reading

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Understanding Egypt's 2024 payroll changes: Essential updates on minimum wage and payment frequency

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What to Choose: Indirect vs Direct EOR

Direct EOR

The EOR owns the legal entities in the target country, coordinating all employment-related tasks directly. It offers faster onboarding, better compliance, and more control.

Best for: Businesses looking to scale quickly, expand long-term, or enter Egypt with compliance.

Indirect EOR

The EOR provider acts as an intermediary between the business and a third-party local entity. While it can be cheaper, it may result in delays and compliance complexity.

Best for: Small teams or short-term hires with less urgent compliance needs.

What’s Best for You?

  • For Small Teams or Contractors: Indirect EOR could work, especially for temporary hires or testing a market.

  • For Scaling and Compliance: Direct EOR is the best choice. With Atlas HXM, you'll have control, faster entry, and streamlined compliance.

Taxes & Compliance

Egypt operates on a calendar-year tax system, running from January 1 to December 31. Employers must submit monthly social insurance contributions by the 15th of the following month, annual tax clearance forms for departing employees, and provide required tax documentation. Annual income tax returns are due by March 31 of the following year.

Category

Details

Employer Payroll Tax

Social insurance contributions: 12% of monthly salary

  • No upper contribution limit

  • Income tax withholding responsibilities

Employee Payroll Tax

Progressive income tax 10%–27.5% on annual income above EGP 20,000

  • Employee social insurance contributions: 9% of monthly salary

Pension System

Mandatory social insurance scheme under Law No. 148 of 2019

  • Combined contributions: 21% (9% employee, 12% employer)

  • Retirement age: 60 with minimum 120 months contributions

  • Pension calculation: 2.22% of average annual earnings per year of contributions

VAT & EOR Costs: Egypt applies a 14% Value Added Tax. EOR services are generally subject to VAT, either included in quoted fees or added separately. Businesses may claim VAT credits if registered and meeting requirements.

Atlas HXM handles tax compliance, including progressive income tax calculations, social insurance contributions, year-end filings, and expatriate tax management, ensuring businesses remain compliant with local laws while minimizing administrative burden.

Termination

Employees must give written notice for termination, with statutory notice periods of 2 months for employees with less than 10 years of service and 3 months for those with 10+ years of service. Severance pay is required for economic terminations (1 month's salary for first 5 years, 1.5 months for each additional year) and retirement at age 60. The EOR helps ensure proper handling of terminations, including notice periods, final wages, and required documentation.

5 Things to Look for in an EOR Provider in Egypt

  1. Deep familiarity with labour legislation, mandatory social insurance, and requirements issued by the Ministry of Manpower.

  2. Modern payroll platforms with integrated reporting and HR system connectivity.

  3. Proven background in your sector, including managing work permits and related documentation.

  4. Documented history of compliance and established relationships with regulators, legal partners, and authorities.

  5. Ability to support expansion across multiple countries, backed by recognised security and compliance certifications (ISO 27001/27017/27018 and GDPR).

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Atlas HXM provides direct EOR services, managing payroll, compliance and benefits efficiently. Our unified platform automates HR, payroll, and compliance tasks, while offering premium employee support, global benefits, and access to 9,000+ learning courses. Recognized by Everest Group PEAK Matrix 2025 and NelsonHall NEAT Assessment 2025, Atlas HXM combines compliance, technology, and global expertise.

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FAQs

Can an EOR in Egypt manage work permit applications for foreign employees?

Yes. Atlas HXM can sponsor and manage work permit applications through the Ministry of Manpower and Training Office, ensuring compliance with Egyptian regulations and the 10% foreign worker limitation.

What is the minimum wage in Egypt for 2025?

The minimum wage for private sector employees is EGP 7,000 per month (effective March 1, 2025). Public sector minimum wage is EGP 4,000 per month.

What is the typical probation period?

Maximum 3 months and must be in the employment contract.

How much notice is required for termination?

Notice depends on length of service: 2 months (<10 years) to 3 months (10+ years), unless terminated for grave mistakes.

What are the social insurance contribution rates?

Combined 21% of monthly salary: 9% employee contribution, 12% employer contribution.

Can employees work overtime without limits in Egypt?

Overtime is regulated with specific payment requirements at 135% (day), 170% (night), or 200% (holidays) of basic rate. Total working time including overtime cannot exceed 10 hours per day.

         

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