End of service in Egypt 2026: notice, resignation, termination and the final settlement

Under Labour Law 14/2025 an indefinite contract can be ended by either side with three months' written notice, a resignation must be in writing and approved by the labour office, and an employer who dismisses without a lawful reason owes compensation of at least two months' pay for every year of service. End-of-service gratuity in the Gulf sense does not exist for insured employees in Egypt; their retirement is funded through social insurance, and the law's gratuity applies only to service that insurance does not cover. The final settlement must pay out the remaining salary, unused leave and any amounts due, net of lawful deductions.

Notice periods

Contract	Who ends it	Notice
Indefinite	Employer or employee	3 months in writing (article 156), regardless of length of service; it runs from the day the other party receives the notice
Fixed-term	Either side before the end date	Not provided for; ending early without a lawful reason is a breach, and the party at fault owes compensation
Fixed-term renewed or extended beyond 5 years	Employee	May end it with 3 months' notice after the fifth year (article 154)
Probation (max 3 months)	Either side	The contract may be ended during probation without the full notice; set the terms in the contract

The notice period is worked and paid in full. Either side can pay in lieu of notice, and the employee is entitled to one paid day a week during the notice to look for work. During the notice the employee stays insured and the usual deductions apply.

Resignation

The new law tightened resignations to stop the practice of undated, pre-signed resignation letters:

• A resignation must be written, signed by the employee and approved by the competent labour office (article 167). A resignation that is not filed with the office is not final.
• The employer must respond within ten days of the filing, or the resignation is deemed accepted.
• The employee may withdraw the resignation within ten days of being told it was accepted, again in writing and through the labour office; the contract then continues as if nothing happened.
• Unexcused absence of more than ten consecutive days, or more than twenty days in a year, can be treated as resignation, but only after a registered warning letter.

Egyptian sources differ on whether a resigning employee on an indefinite contract must also give the three months' notice of article 156. The careful reading is that article 156 applies to both parties, so the contract should state the notice the employee must give and the consequences of not giving it.

Termination by the employer

With a lawful reason. The employer can end an indefinite contract with notice for a legitimate and sufficient reason connected with the employee's performance or conduct, or for economic reasons following the procedure in the law (the committee for closures and downsizing). The reason must be real and documented; a vague "restructuring" without the procedure is treated as unlawful.

For serious misconduct. The law lists the serious faults (impersonation, forged papers, a fault causing serious loss, repeated safety breaches, unexcused absence, disclosure of secrets, assault, drunkenness, and the like). Dismissal for a serious fault is not automatic: it requires an investigation, a written statement of the facts to the employee, and the employer must refer the matter to the specialised labour court, which decides whether the dismissal is justified. The employee can be suspended on full pay while the court decides.

Without a lawful reason (arbitrary dismissal). Article 165 gives the employee compensation of not less than two months' pay for each year of service, on top of notice pay (or pay in lieu) and the other end-of-service entitlements. The court can award more. For a fixed-term contract ended early, the law is silent on a fixed formula; courts generally award the wages for the rest of the term or a sum fixed by the judge, and lawyers argue for applying article 165 by analogy. An employee who ends the contract because of a serious fault by the employer (unpaid wages, assault, breach of essential obligations) is treated as unlawfully dismissed and receives the same compensation.

End-of-service gratuity

Egypt has no general end-of-service gratuity for private-sector employees. Retirement, disability and death are covered by the social-insurance pension under Law 148/2019, funded by the 11% employee and 18.75% employer contributions. That is why registering every employee with social insurance from day one matters: an uninsured employee has a claim against the employer for the whole pension he or she would have had.

The Labour Law's gratuity (article 172) fills the gap for service that social insurance does not cover, chiefly work after the retirement age of 60 when no further pension rights accrue, and for any other period the employee had no insurance rights. The amount is half a month's wage for each of the first five years and one month's wage for each year after that, calculated on the last wage, with fractions of a year paid pro rata. If the employee dies, the gratuity goes to the heirs.

The final settlement checklist

Item	How to calculate	Notes
Salary to the last working day	Monthly wage ÷ 30 × days worked	Include fixed allowances and any earned commission or overtime
Notice pay	3 months' wage if not worked	Pay in lieu is wage: insurance and tax apply
Unused annual leave	Wage ÷ 30 × remaining days	See the leave guide; taxable in the month paid
Compensation for unlawful dismissal	≥ 2 months' wage × years of service (article 165)	Usually agreed in a settlement or awarded by the court
Gratuity (article 172)	Half a month per year (years 1–5), one month per year after	Only for service not covered by social insurance
Bonuses and profit share	Pro rata as the policy or contract provides	Check the contract's leaver clauses
Deductions	Loans and advances, deductions ordered by a court, the employee's share of social insurance and tax on the final pay	Deductions for loans are capped by the law's wage-protection rules; do not withhold pay as pressure to sign

Pay the settlement promptly: the law requires wages due at the end of the relationship to be paid without delay (practitioners work to seven days, and in all cases before the employee's insurance file is closed), and the employer must return the employee's papers and give a certificate of service on request.

Try it in the calculator

Social-insurance paperwork on exit

• Exit notification to the insurance office. The employer notifies the National Organisation for Social Insurance that the employee has left, on the end-of-service form (still widely called Form 6, استمارة 6) through the insurance office or the electronic portal, giving the leaving date and reason. Do this in the month of leaving: contributions are due for every month the file stays open, and the employee cannot be registered by a new employer until it is closed.
• Blank Form 6 is unlawful. Having employees sign the exit form (or a resignation) at hiring was already void and is now expressly sanctioned; the resignation must go through the labour office.
• Labour office. Keep the approved resignation or the dismissal file (investigation record, notice, court referral) for the labour office inspection; the registered-letter proof matters in disputes.
• Certificate of service and papers. Give the employee a certificate stating the dates, job and last wage, and return any documents held.
• Tax. The final-month tax is calculated on the usual monthly basis; include the leaver in the quarterly declaration and the annual reconciliation (Form 4 and the annual settlement return).

Common mistakes

• Treating a signed resignation as final. Without the labour office approval it can be withdrawn, and a pre-signed one is void.
• Dismissing for misconduct without the investigation and court step. The dismissal becomes unlawful and the compensation under article 165 applies.
• Paying "gratuity" to insured staff by habit. Nothing in the law requires it for insured service; if you choose to pay a leaver bonus, call it that in the policy.
• Leaving the insurance file open. Contributions keep accruing and the new employer cannot register the employee.
• Netting the settlement against disputed claims. Deductions must be lawful and within the caps; hold back only amounts the employee acknowledges or a court has ordered.
• Forgetting the notice-period job-search day. One paid day a week during notice.

FAQ

Can the employee leave before the notice ends?

Yes, if the employer agrees or the employee pays in lieu of the unworked part. The employer cannot withhold the certificate of service or the insurance exit form as a sanction.

Is probation termination unlawful dismissal?

A contract may provide a probation period of up to three months, and ending it during probation for an unsatisfactory trial is a lawful reason. Document the assessment; an abrupt end on the last day of probation without any record is often challenged.

What is "wage" for the compensation?

The last full wage, including fixed allowances and the regular variable pay. The new article 165 no longer uses the phrase "comprehensive wage", but practitioners expect the courts to keep using the full wage.

Does the employer owe compensation on an expired fixed-term contract?

No. A fixed-term contract ends by its term with no compensation, provided the end date is in the contract. Watch the renewal rules: repeated renewals can turn it into an indefinite contract.

How does SalaryEG help with a final settlement?

Enter the leaving date, the unused leave days and any pay in lieu as additions; SalaryEG applies the 2026 insurance limits and tax brackets to the final month and produces the payslip and the figures for the insurance exit form.

Sources

• Labour Law 14/2025, Official Gazette issue 18 bis, 3 May 2025, articles 154–172 (termination, resignation, compensation and gratuity) (Arabic text via Eastlaws).
• ILO EPLex, "Egypt — termination of employment", 2025 (link).
• Clyde & Co, "New Labour Law issued in Egypt", May 2025 (link).
• Legalmondo, "Egypt — Termination of employment contracts under the new Labour Law", July 2025 (link).
• Amereller, "Egypt: New Labor Law No. 14 of 2025" (link).
• Shehata & Partners, "New Labour Law No. 14 of 2025" (link).
• Youm7, "قانون العمل الجديد ينصف العامل فى مكافأة نهاية الخدمة" (text of the gratuity article) (link).
• Mondaq, "Registering and de-registering of employees in social insurance" (link).