Employer of Record Guide in Algeria
Navigating the hiring landscape in Algeria can be complex, but with the right insights, you can streamline your process. Discover how to compliantly hire top talent and manage your workforce effectively in this growing North African market.
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Key stats and facts
Algeria's tech sector is rapidly expanding, with strong demand for software developers and cybersecurity specialists across major hubs like Algiers and Oran. Understanding the local market dynamics and regulatory landscape is essential for successful talent acquisition in this emerging economy.
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Your EOR guide in Algeria
From payroll cycles to employment classifications, Algeria has specific requirements that impact how you structure compensation and benefits. This comprehensive guide breaks down the essential compliance details you need to hire and pay employees correctly.
Minimum Wage
The national minimum wage in Algeria is 18,000 DZD per month (approximately $135 USD), effective as of recent government adjustments. This applies to all sectors and regions across the country.
Note: Writers should verify the current minimum wage rate and effective date, as Algerian wage policies are subject to periodic government review.
Payroll Cycle
- Monthly: Standard practice across Algeria (12 pay periods per year)
- Payment Date: Typically by the 30th of each month
- Currency: All payments must be made in Algerian Dinars (DZD)
Individual Income Tax
Algeria operates a progressive income tax system with the following brackets:
| Annual Income (DZD) | Tax Rate |
|---|---|
| Up to 120,000 | 0% |
| 120,001 to 360,000 | 20% |
| 360,001 to 1,440,000 | 30% |
| Over 1,440,000 | 35% |
Note: Writers should verify current tax brackets and rates with Algerian tax authorities.
Tax Residency Criteria
Individuals who spend more than 183 days in Algeria during a calendar year are considered tax residents and must pay Algerian income tax on their worldwide income. Non-residents are taxed only on Algerian-source income.
Employer Payroll Contributions
Employers in Algeria must contribute to various social security schemes:
| Contribution Type | Employer Rate | Employee Rate |
|---|---|---|
| Social Security | 25% | 9% |
| Unemployment Insurance | 1.5% | 1.5% |
| Retirement Fund | 10% | 7% |
| Total Employer Cost | ~36.5% | 17.5% |
Note: Rates may vary by industry and company size. Writers should verify current contribution rates.
Working Hours
The standard work week in Algeria is 40 hours per week, typically distributed as 8 hours per day over 5 days (Sunday through Thursday, as Friday and Saturday are the weekend).
During Ramadan, working hours are reduced to 6 hours per day for Muslim employees.
Overtime Pay
- Overtime is paid at 1.25× the regular hourly rate for hours worked beyond 40 per week
- Maximum Overtime: 20% of normal working hours (8 hours per week)
- Weekend Work: Paid at 1.5× the regular rate
- Holiday Work: Paid at 2× the regular rate
Employment Classifications
- Full-time: Employees working 40 hours per week
- Part-time: Employees working fewer than 40 hours per week (less common)
- Fixed-term contracts: Maximum duration of 2 years, renewable once
Annual Leave
- Standard Entitlement: 30 calendar days per year after 12 months of service
- Accrual: 2.5 days per month of service
- Payout Rules: Unused leave must be paid out upon termination
- Timing: Leave must be taken within 18 months of earning it
Sick Leave
- Duration: Up to 3 years for the same illness
- Payment:
- First 15 days: 100% of salary
- Days 16-180: 50% of salary
- Beyond 180 days: Social security benefits apply
- Medical Certificate: Required for absences longer than 3 days
Maternity Leave
- Duration: 14 weeks total (6 weeks before birth, 8 weeks after)
- Payment: 100% of salary, funded by social security
- Job Protection: Position must be held open during leave
- Nursing Breaks: 1 hour per day for nursing mothers for up to 12 months
Paternity Leave
- Duration: 3 days
- Payment: 100% of salary
- Timing: Must be taken within 15 days of birth
Religious Leave
- Hajj Pilgrimage: Up to 30 days unpaid leave for Muslim employees
- Religious Holidays: Paid time off for major Islamic holidays
Summary
| Leave Type | Duration | Paid? | Funding |
|---|---|---|---|
| Annual Leave | 30 days/year | Yes | Employer |
| Sick Leave | Up to 3 years | Partially | Employer/Social Security |
| Maternity Leave | 14 weeks | Yes | Social Security |
| Paternity Leave | 3 days | Yes | Employer |
| Religious Leave | Varies | Partially | Employer |
Termination Types
Termination With Cause:
- Requires serious misconduct or repeated violations
- No notice or severance required
- Must follow disciplinary procedures outlined in labour code
Termination Without Cause:
- Requires economic justification or restructuring
- Must provide notice and severance
- Requires approval from labour authorities for collective dismissals
Notice Period Requirements
| Length of Employment | Notice Period |
|---|---|
| Less than 1 year | 1 month |
| 1-5 years | 2 months |
| 5-10 years | 3 months |
| Over 10 years | 3 months |
Severance Pay
Severance is calculated based on length of service:
- 1-10 years: 1 month's salary per year of service
- Over 10 years: 1.5 months' salary per year of service
- Minimum: 3 months' salary regardless of tenure
Probationary Periods
- Duration: Up to 6 months for most positions
- Extension: Can be extended to 12 months for managerial roles
- Termination: Either party can terminate with 8 days' notice during probation
Final Pay Requirements
Final payments must be made within 48 hours of termination and include:
- Outstanding salary
- Unused annual leave
- Severance pay (if applicable)
- Any other contractual benefits
National Holidays
| Holiday | Date |
|---|---|
| New Year's Day | January 1 |
| Amazigh New Year | January 12 |
| Labour Day | May 1 |
| Independence Day | July 5 |
| Revolution Day | November 1 |
Islamic Holidays (Dates Vary)
| Holiday | Duration |
|---|---|
| Eid al-Fitr | 3 days |
| Eid al-Adha | 3 days |
| Islamic New Year | 1 day |
| Prophet's Birthday | 1 day |
| Ashura | 1 day |
Note: Islamic holidays follow the lunar calendar and dates change annually.
Holiday Pay Rules
- Employees must work the day before and after a holiday to qualify for holiday pay
- If a holiday falls on a weekend, a substitute day off is provided
- Working on a holiday requires 2× normal pay plus a substitute day off
Required Documents
For the Employee:
- Employment contract in Arabic (French translation acceptable)
- Work permit (for foreign nationals)
- Medical certificate
- Criminal background check
- Educational certificates (authenticated)
For Payroll Setup:
- Social security registration
- Tax identification number
- Bank account details (Algerian bank required)
Work Authorization
Foreign Nationals Must Obtain:
- Work permit from Ministry of Labour
- Residence permit from local authorities
- Professional licence (if applicable)
- Processing Time: 2-3 months typically
Employment Contracts
Must Include:
- Job description and responsibilities
- Salary and benefits
- Working hours and location
- Probationary period terms
- Termination clauses
- Language: Must be in Arabic, with French translation permitted
Onboarding Timeline
| Step | Timeline |
|---|---|
| Work permit application | 30-60 days |
| Contract preparation | 5-7 days |
| Social security registration | 10-15 days |
| Medical examination | 3-5 days |
| Final documentation | 5-10 days |
Worker Classification
Algeria has strict regulations distinguishing employees from contractors:
Employees:
- Work under employer supervision
- Use company equipment and facilities
- Receive regular salary and benefits
- Protected by labour law
Contractors:
- Work independently with minimal supervision
- Use own tools and equipment
- Invoice for services
- Not covered by employment protections
Note: Misclassification can result in significant penalties and back payments.
Language Requirements
- Official Languages: Arabic (primary), Tamazight (Berber)
- Business Language: French widely used in business
- Employment Contracts: Must be in Arabic
- Workplace Communication: Arabic or French typically acceptable
Cultural Considerations
Work Schedule:
- Weekend: Friday and Saturday
- Ramadan: Reduced working hours (6 hours/day)
- Prayer Times: Accommodation required for Muslim employees
Business Practices:
- Formal hierarchy respected
- Personal relationships important in business
- Islamic principles influence workplace policies
Remote Work
Remote work regulations are limited in Algeria:
- Legal Framework: Minimal specific legislation
- Practical Challenges: Internet infrastructure limitations
- Tax Implications: Complex for cross-border arrangements
- Recommendation: Consult local legal counsel for remote work arrangements
Note: Writers should verify current remote work regulations as this area is evolving.
Union Relations
- Union Membership: Constitutionally protected right
- Collective Bargaining: Common in larger companies
- Strike Rights: Protected but with procedural requirements
- Employer Obligations: Must negotiate in good faith with recognised unions
Built-in benefits packages for Algeria
When the world is your competition, it pays to incentivize new hires and existing alike. Borderless AI benefits packages typically inlucde:
Medical Insurance
Dental Insurance
Retirement Contribution
Life Insurance
Vision Insurance
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