Employer of Record in Algeria
There are some benefits to setting up a business in Algeria, including the low overhead cost. Further, Algeria is ranked within the world’s top 10 producers of both oil and natural gas. There’s an expectation of new investment due to the inadequacy of the existing infrastructure. The Algerians are tech-savvy and interested in technology. Medical equipment and disposal are getting attention from consumers and the citizens depend upon imported goods.
If you wish to tap into the Algerian market to expand your business, you might need assistance. Algeria’s numerous employment and labor laws require careful interpretation. As an EOR solution service and a Professional Employer Organization (PEO), Skuad can partner with your business to help it grow and expand operations in Algeria in compliance with local regulations. Our integrated, self-serve global human resource (HR) platform can take over functions such as recruitment, hiring, onboarding, payroll, and termination of employees. This saves your time, labor, and resources, allowing you to focus on the business side of operations. Talk to Skuad experts to learn more about our Algeria EOR services to begin your expansion plans.
Algeria at a Glance
Estimated population: 44 million people (2020)
Current: Algerian dinar (DZD)
Capital: Algiers
Official languages: Arabic and Berber
Gross Domestic Product (GDP): USD 144.29 billion (2020)
Main industries: Oil and gas
Employment in Algeria
According to Statista, as of 2020, the majority of the labor force in Algeria is working in the service sector. In 2010, the services sector employed around 60% of the employees in the country; this number has increased by almost 2% in the last decade. The oil and gas industry does not require an extensive labor force. Hence, although the oil and gas industry contributes the most to the country’s GDP, employment in this field has been growing in recent years.
The key entitlements under the employment laws in Algeria are given below:
Employee Health Benefits in Algeria
Health insurance benefits are provided by Algeria as it has a public healthcare system that is funded through social security and state contributions. Companies may offer supplementary private healthcare insurance.
Sick Leave
Employees are entitled to sick leave usually paid for from the day of illness. Sick leaves are provided where employees receive a portion of their salary during the first 15 days of absence due to illness. This increases after 16 days of sickness, or if the employee is admitted to the hospital.
Public Holidays
There are nine public holidays in Algeria, as follows.
- New Year’s Day (January 1)
- Yennayer (January 12)
- May Day (May 1)
- Eid al-Fitr (May 12)
- Independence Day (July 5)
- Eid al-Adha (July 19)
- Muharram (August 8-9)
- Day of Ashura (August 18-19)
- The Prophet’s Birthday (October 18-19)
- Anniversary of the Revolution (November 1)
Vacation/Paid Leave
Employees are entitled to a maximum yearly paid leave of 30 days accumulated over 12 months on a two and half days’ basis. Rejection of annual leaves is not acceptable in Algeria.
Employment Contracts
In Algeria, employment contracts can be both oral or written, but it is best to draft a strong, written contract that spells out the terms of the employee’s compensation, benefits, and termination requirements. An offer letter and employment contract should always state the salary and compensation amounts. Fixed-term contracts are allowed in some instances, including the temporary replacement of a worker.
Working Hours
As per the labor laws in Algeria, the normal working time for employees is 40 hours per week, and employees must be given one whole day (paid) to rest every week. No employee can be forced to work overtime for more than eight hours a week.
In May 2020, the government increased the basic pay rate to DZD 18,000, almost equal to USD 170. Employees must be allowed a fully paid annual leave of up to 30 days.
Maternity and Paternity Leave
Companies in Algeria provide maternity and paternity leaves. Female employees receive 14 weeks of fully paid maternity to benefit their health and recovery and 100% of medical benefits and hospitalization costs for up to eight days. Male employees can take up to three days of paid emergency leave for the birth of a child.
Algeria’s employment laws have undergone many reforms over the years. Given the complexity of these laws and the rigidness with which they are enforced, it is prudent to partner with an EOR firm to maneuver through them.
Skuad’s EOR service in Algeria has the expertise to help you overcome potential obstacles as you try to expand your business. Get in touch with us to learn more.
Contractors vs. Full-time Employees
Workers in Algeria are usually misclassified as independent contractors. The biggest reason for firms to make their full-time employees look like independent contractors is the cost-saving aspect. It includes employee benefits, payments such as employment taxes, social security, and pension payments. These usually make an official employee a more expensive worker by up to 40%.
A contractor that is an employee can draw unwanted attention to a company’s activity. On top of that, a law breach can trigger an investigation into the company’s operations.
Therefore, the hidden benefit of hiring and paying foreign employees versus independent contractors in Algeria is that official foreign employment eliminates 95% of legal, financial, and business risks. To expand to Algeria, consider partnering with Skuad and availing of our tailor-made hiring solutions. Also, by using an EOR service, you can find more flexibility and take up more projects of different durations. You can start a bare-bones operation with just one or a couple of employees and easily add to your workforce as you move along.
Talk to Skuad experts today to learn more!
Hiring in Algeria
Like any organization, the recruitment process in any company in Algeria includes the following steps.
- Career opportunity and application, which includes submitting a curriculum vitae (CV) and cover letter online
- Initial telephone interview
- First-round interviews
- Assessments
- Second-round interview, if needed, which constitutes the last step before finalizing any employee for working in the organization
Some of the job portals which you can refer to hire employees in Algeria are Upwork, Bayt.com, Aquaculture Talent, and ReKrute.com.
You can also advertise job opportunities in Algeria through magazines and newspapers. For example, you can advertise in newspapers such as Le Soir d’Algerie, El Maudjahid Newspaper, and El Massa.
You can also advertise job opportunities in Algeria through magazines and newspapers. For example, you can advertise in newspapers such as Le Soir d’Algerie, El Maudjahid Newspaper, and El Massa.
Skuad’s EOR solutions service in Algeria can search for, vet, and recruit the best talent.
Probation & Termination
Probation Period in Algeria
An employer has the right to place a new employee on probation for a period that must not exceed six months, or for senior positions, 12 months.
Termination of Service in Algeria
A contract of employment can be terminated by one or both parties, by mutual consent, or when the agreed-upon period of employment expires. Termination of employment can occur at the end of a fixed-term contract based on an action by the employer or the employee.
Employers must provide notice of dismissal absence and serious misconduct by the employee. The notice period is six months (or up to 12 months for skilled employees), plus five days for each year of service up to a maximum of 30 days. Employees should get compensation in cash if they are dismissed, for several reasons.
- They have worked for the company for at least two years.
- If they are terminated for reasons other than misconduct
To expand your business in Algeria while adhering to the probation and termination legislations, contact a Skuad expert and avail of our EOR solutions. We can draw up contracts, supervise onboarding and probation, and manage the termination of employees, as per your organization’s needs.
EOR Solution
An EOR is a third-party organization that hires and pays an employee on behalf of another company and takes responsibility for all formal employment tasks. Using an EOR solution allows companies to legally and efficiently engage with overseas workers.
Skuad’s Algeria EOR solution arranges all visas and works permits for your employees, provides a registered entity for running a locally compliant payroll inside the country, meets all host country labor laws about local contracts and worker protection policies, and advises you regarding the required notice periods, termination rules, and severance pay. Hence, it acts as the host country interface between the employee and government authorities.
To expedite your expansion endeavors in Algeria within the ambit of the local laws and find bespoke solutions for all your HR needs, make use of Skuad’s EOR expertise by booking a demo today.
Types of Visas in Algeria
Algeria offers tourist, business, work, visitor, diplomatic/work, family visit, study, cultural, medical, and press visas. However, the four main types are as follows.
- Tourist Visa: It allows the bearer to enter a foreign country for tourism and leisure purposes and only stay for a predetermined time. The visa does not entitle the holder to work or engage in any business activities in the host country.
- Business Visa: It is issued to foreign nationals traveling to Algeria for a business trip. Businesspeople, company representatives, or employees of foreign companies may apply for a business visa.
- Study Visa: Any foreign national intending to enter Algeria for education purposes should obtain an Algerian visa (if applicable) to facilitate their entry into the country.
- Work Visa: Algeria’s work visa gives foreign nationals the ability to work in the country in the long term. If the employees work only in a certain company for no more than 90 days, they can apply for a temporary work visa instead.
Algeria Work Visa Requirements
Every Algeria work visa has different requirements; the common documentation required by every candidate include,
- An original passport valid for at least six months after entering the country
- A blank passport page for the visa
- A complete and signed visa application
- A passport-size photo taken within the previous three months
- An invitation letter issued by an Algerian host
- A copy of the host’s ID, passport, or consular card
- Proof of employment status (the company’s document or letter)
- Proof of adequate financial means (bank slip or payslip)
- Plane tickets
- Proof of payment of visa fee
- Work permit and
- Copy of work contract
Application Process
The candidate can submit the documents in person at an Algerian consulate or embassy, mail them, or work with an authorized visa application agency.
If they are applying in person, the candidate must take an appointment with the consulate or embassy in their country of residence. Such an organization will guide in completing the application form, gathering the necessary documents, and submitting everything in person at the time of appointment. The process may include them questioning the candidate about the purpose of their trip, their job, or their monthly salary. After that, they will have to pay the visa fees and wait for the application to be processed.
Skuad’s EOR solutions include taking care of your employees’ work visas. To avail yourself of our services, get in touch with us.
Types of Algerian Work Visas
The types of Algerian work visas or professional visas are as follows.
The documents required to apply for an Algeria work visa are,
- Work authorization issued by an Algerian office of employment
- Copy of your employment contract
- Letter from your employer
- Date of starting your job
- Work designation/position
- Purpose of travel
Your employer must also state that they will cover your living expenses and the cost of your repatriation.
The documents for an Algeria official/diplomatic visa are,
- Letter of invitation from the Algerian authorities
- Any other proof that you are traveling for diplomatic/official purposes (for instance, a letter from the government department in which you work)
An Algeria business visa requires a letter from your employer stating,
- Your position in the company
- The reason why you are traveling
- Confirmation that they will cover your expenses on the trip
In addition, a letter of invitation from the Algerian company that you will be visiting or doing business with is required.
The documents required to apply for a temporary work visa in Algeria are,
- Work authorization issued by an Algerian office of employment
- Copy of your employment contract
- Letter from your employer stating your job title, position, and the purpose of travel. Your employer must also state that they will cover your living expenses and the cost of your repatriation
Work Permits
Once you enter Algeria, you must apply for a work and residence permit that will authorize you to work for your employer. Some of the requirements to obtain a work permit include the following.
- A valid travel document
- A completed application form
- Your two passport size photos
- Temporary work authorization
- An educational certificate
- A resume/CV
- A passport that is valid for at least six months after you arrive in Algeria
- A residence permit application form
- A medical certificate
- An employer letter
Algeria Work Permit for Foreigners
Algeria’s work permit for foreigners is the same for applicants from every country. The application process, the documentation required for an Algerian work visa, and the process to issue the work visa is also identical for every foreign candidate.
It is impossible to get a work permit in Algeria without a job offer. Skuad’s Algeria EOR solutions can handle the process of securing work permits for your employees to ensure your expansion goes without a hitch. Talk to Skuad experts to find out more.
Payroll & Taxes in Algeria
Payroll in Algeria
There are three different Algeria payroll options that companies usually choose from.
- Payroll in Algeria
There are three different Algeria payroll options that companies usually choose from.
- Internal
It helps the company to handle all aspects of paying their employees, but for choosing this option, the company must have a large budget and staff to comply with Algeria’s laws.
- Remote
A remote payroll runs out of the parent company of the company to which you have applied, and it keeps all the employees under one payroll. However, in this case, the subsidiary employees will have different tax laws than the parent company’s workers.
- Algeria payroll processing company
If your company does not wish to choose from between the first two options, it needs to outsource. If you partner with an Algerian payroll company, you will still be held responsible for any non-compliance issues.
Taxation Rule for Payrolls
Algeria uses a progressive tax rate. It means that employees owe a greater tax as their income increases. An employer needs to register for income tax with their local tax office within two months of forming the company. Corporate tax rates vary by industry.
Payroll Requirements
- Payslip
According to Algerian labor legislation in force, the employer shall issue a payslip to each of their employees at the time of their salary payments. This document includes the name or corporate name and address of the employer, the number under which the employer pays its contributions to the social security fund, the name of the employee, the period and number of work hours or days corresponding with the paid remuneration, the payment date, the gross and net salaries, and the withheld amounts.
- Banking requirements related to payroll
Most employers use the bank transfer process to disburse salaries. However, payment to non-resident accounts or foreign accounts might be subject to special authorization from the Bank of Algeria or any other financial institute.
Taxes in Algeria
Residents of Algeria are taxed on global income while non-residents are only taxed on income received in Algeria. Taxes such as corporate, consumption, and individual taxes, and double taxation treaties are applicable in Algeria.
Some of the taxes an employee working in Algeria should be aware of are as follows:
Income Tax
It is progressive and categorical. It does not cover income below DZD 120,000. The income tax rates as per the income are 0% up to DZD 10,000; 20% from DZD 10,0001 to 30,000; 30% from DZD 30,001 to 120,000, and 35% over DZD 120,000.
Corporate Tax
Corporate tax is levied on economic activities carried out in Algeria regardless of residency. Corporate tax rates are as follows: 19% for manufacturing activities; 23% for building activities, public works, and hydraulics as well as tourist and thermal activities, excluding travel agencies; 26% for all other activities.
Business Activity Tax
Business activity tax relies on the turnover of taxpayers engaged in a profit-making activity that is not covered by the income tax. The rate of tax is set at 2%.
Real Estate Tax
The real estate tax is differentiated by built and unbuilt property. The rate of tax varies according to location.
Personal Property Tax
It covers all persons having any personal or real property in Algeria. It amounts to about 35%.
Interior Consumption Tax
Taxpayers of this tax are all the consumers in Algeria. Capital gains are taxed at 15% for residents and 20% for non-residents.
Value Added Tax (VAT)
It is an indirect tax. In it, tax is collected from someone who does not bear the entire cost of tax. A special reduced rate of 7% applies to products, commodities, wares, merchandise, and operation. Under the VAT, 17% is applied for operations related to services and goods not subjected to another rate.
Navigating the rules for payroll and taxation can be time-consuming and labor-intensive. Skuad has the expertise needed to manage these HR functions for your company and significantly reduce the resources required to handle them. Get in touch with Skuad experts to find out how we can craft bespoke solutions for your expansion needs in Algeria.
Incorporation: How to Set Up a Subsidiary in Algeria
Company registration in Algeria might not be easy. Hence, you should familiarize yourself with the types of companies that can register in Algeria, whether local or foreign.
Skuad’s EOR services can guide you through your incorporation process from start to finish. To get more details regarding registration, contact Skuad experts today.
Professional Employer Organization (PEO)
A professional employer organization (PEO) provides comprehensive HR solutions for small- and mid-size businesses. Some of the main services that PEOs provide are payroll, benefits, HR, tax administration, and regulatory compliance assistance. There are various advantages of PEOs such as co-employment, employee benefits, operational cost, and accessibility to HR services.
Through co-employment, a PEO becomes the employer of record for tax purposes by filing payroll taxes under its tax identification numbers. As a legal employer, a PEO is responsible for withholding property taxes, paying unemployment insurance taxes, and providing workers’ compensation coverage.
Skuad provides EOR solutions and also acts as a PEO. To learn more about how to boost your expansion efforts, book a demo with Skuad.
Conclusion: What Gives Skuad’s Algeria Solutions an Edge?
It is known that local laws and regulations undergo constant changes and amendments. Algeria is no different in that regard. It is crucial to stay updated regarding the laws and research and verify data to ensure information accuracy, especially if you’re looking to expand your business in Algeria.
Partnering with Skuad will help you to remain focused on expanding your business and making it grow, while all the other cumbersome activities will be managed by our bespoke EOR solutions. Connect with us for further information.
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