Capital: Algiers
Currency: Algerian Dinar (DA)
Population: (2022 est.) 45,502,000
Official languages: Arabic; Amazigh
Algeria, officially the People’s Democratic Republic of Algeria, a regional power in the North African region, Algeria has the highest human development index among the non-island African countries. The country’s economy is supported by rich natural gas and oil reserves. It is regarded as one of the largest economies on the continent.
The public holidays in Algeria are as follows;
Date & Holiday
- 1 Jan New Year’s Day
- 12 Jan Amazigh New Year
- 21 Apr Eid al-Fitr
- 22 Apr Eid al-Fitr Holiday
- 1 May Labour Day
- 28 Jun Eid al-Adha
- 29 Jun Eid al-Adha Holiday
- 5 Jul Independence Day
- 19 Jul Islamic New Year
- 28 Jul Ashura
- 27 Sep Prophet Muhammad’s Birthday
- 1 Nov Revolution Day
An employee may be employed on probation for up to six months, although highly qualified individuals may be subject to a probationary period for up to 12 months.
The Algerian Labor Law provides employees a minimum entitlement to 30 calendar days’ paid annual leave.
A female employee is entitled to 14 weeks’ fully paid maternity leave, provided that the employee has worked:
- at least either 15 calendar days or 100 hours during the three months preceding the date of the first medical acknowledgment of pregnancy
- 60 calendar days or 400 hours during the 12 months preceding the first medical acknowledgment of pregnancy,
This maternity leave includes a compulsory period of not less than 6 weeks of leave before the expected date of birth and following delivery.
Male employees can take three days of paid paternity leave as long as they submit a written notice and reason.
Regarding redundancy allowances, the employer must pay to any employee who is subject to a downsizing and who benefits from the unemployment insurance regime, an amount of compensation equal to three (3) months’ salary. (Cf. Art. 22 of the Decree 94-09.). As per Article 23 of the Decree 94-09, this allowance is calculated based on the average gross monthly wage received during the twelve (12) months preceding the termination of the employment relationship. In addition, Article 21 of the same Decree provides that employees to be terminated in the framework of a reduction in the workforce and who are compensated by means of a job, or admission to retirement or early retirement are not entitled to any compensation other than that due to them for paid leave. In specific cases of serious fault, the dismissal allowance can be null.
Accurately estimate your costs when employing in Algeria in 2023. Includes base salary, dependents, benefits, taxes, social contributions, and payroll costs. Monthly or yearly calculation period.
Average Salary in Algeria: The average salary in Algeria is 36,415.30 DZD a month ($259.33).
Algeria Minimum Wage: The minimum Algerian salary is 20,000 DZD (about $142.43)
13th Month Salary in Algeria: There is no statutory requirement to pay the 13th or 14th month salary. In fact, structural measures aimed at tightening the link between pay and performance suggests that it is not customary practice to pay the 13th month.
Most people traveling to Algeria will need to obtain a visa before they arrive. However, individuals from Libya, Malaysia, Mali, Morocco, Seychelles, Tunisia, and a few other countries are exempt from requiring a visa if they’re entering Algeria for tourism or business for up to 90 days. People with diplomatic and service passports from certain countries are also exempt from getting a visa.
Most of your employees will need an Algeria work visa, which gives foreign nationals the ability to work in Algeria long-term. If your employees will work only for you for no more than 90 days, they can apply for a temporary work visa instead.
Every Algeria work visa has different requirements, but some of the common documentation applicants will need includes:
- An original passport valid for at least six months after entering Algeria
- At least one blank passport page for the visa
- A completed and signed visa application form
- A passport-sized photo taken within the last three months
- An invitation letter issued by an Algerian host, which could be you or a travel agency
- A copy of the host’s ID, passport, or consular card
- Proof of employment status, such as your company’s documents or a letter from you
- Proof of adequate financial means, such as a bank statement or payslip
- Plane tickets or itinerary
- Proof of payment of the visa fee
Applying for a working visa in Algeria also means individuals need a work permit and a copy of their work contract. As the employer, you should provide a letter detailing the employee’s job title, position, and purpose for traveling to the country. The letter should also state that you will cover the employee’s living expenses and cost of repatriation.
The application process for a work visa in Algeria depends on how a person applies. For example, your employees can submit the documents in person at an Algerian consulate or embassy, mail them, use a proxy with a notarized letter of authorization, or work with an authorized visa application agency.
If they’re applying in person, the applicant must make an appointment with the embassy or consulate in their country of residence. Then, they’ll complete the application form, gather the necessary documents, and submit everything in person at the appointment. This process may include questions about the purpose of the trip or an individual’s job or salary. Afterward, pay the visa fee and wait for the application to be processed.
Once your new employees enter Algeria, they should apply for a work and residence permit, which will authorize them to work for your company in Algeria. Some of the requirements to obtain a work permit include:
- A valid travel document
- A completed application form
- Two passport photos
- Temporary work authorization (APT)
- An educational certificate
- A resume/CV
- A passport that’s valid for at least six months
- A residence permit application form
- A medical certificate
- An employer letter
Entitlement and termination terms differ by country, and you may find it challenging to terminate an employment relationship in Algeria. Adding termination and entitlement terms to your employment contracts before settling on an Algeria payroll option will help you stay compliant. An employment contract can get terminated by one party, both parties, or at the end of the duration of employment as agreed on in the contract.
Keep in mind that employees are entitled to compensation in cash if they’re terminated for any reason other than misconduct after working for your company for at least two years.
Employees should also receive 30 days of paid annual leave that they accumulate over 12 months. In addition, you’re required to provide sick leave that you pay for from the first day of the illness unless otherwise required by law.
According to Algerian Labor Law, a typical work week runs from Sunday to Thursday and the maximum prescribed working hours for an employee is 40 hours per week. This is based on a five-day week, and eight hours per day excluding a one-hour break. Friday is the mandatory day of rest each week.
Overtime hours must not exceed 20% of the maximum working hours (i.e. eight hours per week) and an employee must not be required to work more than a total of 12 hours per day. If an employee is required to work additional hours, they are entitled to overtime pay, for a minimum of 150% of the normal hourly wage. If circumstances require the employee to work on their weekly day off, they must be granted another day off (in lieu) and 150% off their wage for the overtime period.
There are different termination rules for the two employment contract types in Algeria: Fixed term contracts terminate on expiry and Unlimited term employment contracts may only be terminated for cause or redundancy.
For an employee’s employment contract to be terminated for cause, there has to be serious misconduct. Dismissal is only permitted once a disciplinary procedure has been carried out. Failure to carry out a disciplinary procedure will result in the dismissal being deemed to be ‘abusive’ and this will have consequences for the employer, who will be required to pay termination compensation.
Article 73-5 of the Law 90-11 provides that dismissing workers who have not committed serious misconduct entitles them to a leave period, the minimum duration of which is fixed in collective agreements or conventions. Article 73-6 of the same law provides that, during the leave period, the dismissed worker is entitled to two hours per day, cumulative and paid, to allow him/her to look for other jobs in Algeria. The employer organization can fulfill the obligation to give the leave period by paying the dismissed worker a sum equal to the total remuneration he would have received during the same time.
The Personal Income Tax Rate in Algeria stands at 35%
The Social Security Rate in Algeria stands at 35%. It is the employer’s obligation to contribute 26% of the employee gross salary (employer contribution) and 9% of gross salary (employee contribution). The social security contributions cover retirement, illness, unemployment, and work accidents.
Deductible Expenses
- Alimony Payments
- Mortgage Interest Expenses
- Taxes Paid
Non-Deductible Expenses
- Charitable Contributions
- Childcare Expenses
- Education Expenses
- Healthcare Expenses
- Life Insurance Premiums
Algeria uses a progressive tax rate, employees owe more as their income increases. As an employer, you’re required to register for income tax with your local tax office within two months of forming your company. Corporate tax rates vary by industry. For example, manufacturing companies owe 19% of profits, while public works businesses owe 23%.
As explained in the Taxes on corporate income section, the WHT levied on services is 30%, which covers CIT, TPA, and VAT (i.e., three taxes in one). The calculation base is the gross amount of the services invoiced. In principle, it could be reduced or removed by a DTT.
The WHT levied on dividends (15% for both residents and non-residents) and the 10% WHT levied on interest can be reduced in the presence of a DTT. In accordance with Article 46 of FL 2022, distributed profits between Algerian resident entities that have been previously subject to CIT undergo a 5% WHT.
The WHT levied on royalties is 30%. In the presence of a DTT, the WHT cannot exceed 5%, 10%, or 12%, depending on different cases.