Egypt Payroll Services

At Bradford Jacobs, we navigate the administration of the Egyptian payroll system for you. We do the work, so you do not have to.

Egyptian Payroll

It is essential for companies planning to run Payroll Services in Egypt to have a clear plan and make the right moves from day one. Egypt is one of the most important civilisations of the ancient world. In today’s global economy, its strategic position on the eastern Mediterranean coast puts it at the hub of the region’s trading blocs.

Hieroglyphs - Photo of a mysterious inscription in the stone from ancient Egypt
Hieroglyphs - Photo of a mysterious inscription in the stone from ancient Egypt

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The Arab Republic of Egypt is at the heart of the Middle East and North Africa (MENA) region, with ports on the Mediterranean and the Red Sea. Egypt also controls the Suez Canal – a vital trade route linking the Med to the Red Sea.

Egypt is a significant economic force in the region with a membership in the Greater Arab Free Trade Area, the African Free Trade Zone and the Common Market for Eastern and Southern Africa. Globally, Egypt has a free trade agreement with the European Union (EU) and is a member of the United Nations, the International Monetary Fund, the World Bank and the World Trade Organisation. These factors position Egypt as a prime target for International Expansion by foreign companies, and it can also provide a stepping stone to the broader potential of the region.

Bradford Jacobs’ Professional Employer Organisation (PEO) and Employer of Record (EOR) platforms and networks provide complete answers to every question your company will encounter before you move into the economy, especially when it comes to operating payroll.

  • Remote payroll – This option allows businesses to operate under a single payroll system, by adding employees in Egypt to your parent company’s payroll. However, these employees must operate under different regulations, which is likely to cause problems.
  • Internal payroll – You may operate payroll for your subsidiary, especially if you are committed to growing your company’s presence in Egypt. However, this does require hiring dedicated HR staff who understand Egyptian employment and compliance laws.
  • Egypts’ payroll processing company – If you are considering outsourcing, then working with a Egyptian payroll company will help in processing your payroll – but not when it comes to compliance.
  • Egypts’ payroll outsourcing – However, there is another option available that solves both concerns – by working with Bradford Jacobs. We can handle payroll and compliance for all your employees in Egypt. We take the administrative stress off your shoulders so you can focus on what you do best.

The Arab Republic of Egypt’s strategic location at the heart of the Middle East and North Africa (MENA) region gives it a high ranking on the list of potential markets for foreign expansion. Additionally, Egypt controls the Suez Canal, which joins the Mediterranean to the Red Sea and is a vital link between Europe and the west to Arabia, India, the Far East and further into Africa.

The opportunities come with challenges – and payroll services in Egypt are among the most demanding. Whether your company is planning to move staff abroad or hire employees in the new territory, you cannot risk making mistakes operating in Egypt’s bureaucratic payroll and income tax regime – it could cost you time and money. Additionally, no more than 10% of the staff can be foreigners, and their salaries cannot generally exceed 20% of the total payroll, with exceptions applying to some Free Trade Zones.

Foreign companies intending to run the payroll for their staff in Egypt must set up a subsidiary, which involves complex registration procedures both at the corporate level and for individual employers and employees. The popular choice is to open a limited liability company for the protection it offers the parent company and its founders, shareholders and partners. Companies must have approval from the General Authority for Investment and Free Zones (GAFI) and, if involved in capital market activity, the Financial Regulatory Authority (FRA). They must comply with the Companies Law and the Investment Law.

This represents a significant commitment. Operating payroll in Egypt is complex and demands a complete understanding of company, tax and employment legislation. In addition to the state level of bureaucracy, Egypt has 27 governorates where legislation can vary.

However, there is an alternative and more straightforward option. Bradford Jacobs’ will navigate around these potential pitfalls effectively and efficiently. We recruit the staff in-country and then implement our comprehensive knowledge of tax and payroll regulations. As part of our service, Bradford Jacobs files returns and remits associated payments for tax and social security contributions directly from our payroll system to the relevant authorities. Your new staff members can be up-and-running in days rather than weeks or months to establish a legal entity in the country.

Outsourcing payroll in Egypt will streamline your operations by dealing with the following:

  • Creating an employment contract in Arabic with three copies, one for the employer, the employee and the local office of the National Authority for Social Insurance. Contracts can be indefinite or fixed-term.
  • Registering employees with the relevant local authority with confirmation of contract, ID/passport, educational qualifications, Form (1) for social insurance, birth certificate and, if required, work permit.
  • Registering employees with the relevant Tax Authority office of the Ministry of Finance to obtain their Tax Identification Number.
  • Remitting employees’ tax and social insurance contributions by the 15th of the following month.
  • Submitting all employees’ reconciliations for gross income and tax paid by January 1 of the following financial year, which is the calendar year.
  • Maintaining employees’ employment records and payroll accounts and keeping them for a minimum of five years.

Foreign companies must establish a legal entity in Egypt to operate payroll for their staff. They must first decide on the business structure best suits their expansion plans. The limited liability company (LLC) is the typical choice due to the protection it offers the parent company and its founders, shareholders and partners. The entity must comply with the Companies Law, with approval from the General Authority for Investment and Free Zones (GAFI) and, if involved in the capital market, the Financial Regulatory Authority (FRA).

Procedures for a limited liability company include:

  • Obtain approval for a unique company name from the Commercial Registry.
  • Obtain a certificate of establishment from GAFI after approval.
  • Bank certificate proving at least 10% of any issued share capital has been deposited.
  • Copies of Power of Attorney for all partners/founders etc., in the LLC, a minimum of two.
  • All Powers of Attorney and Articles of Incorporation must be notarised.
  • An LLC must have an Egyptian manager.
  • Copies of national IDs for Egyptians or passports of foreigners involved in the incorporation.
  • Verification from the Register of Accountants that the auditor is certified to audit company accounts and complete details of the company’s legal advisor, who must be qualified for the Court of Appeal level.
  • Approval from the relevant authority if special licenses are required.
  • Obtaining the company’s Tax Identification Number (TIN), also known as the Employer ID Number (EIN), from the Egyptian Tax Authority of the Ministry of Finance.
  • Register with the National Authority for Social Insurance.

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