Hiring your first employee in Algeria: contract, CNAS, contributions and income tax

Before hiring: what CNAS will ask for

Only a business that is already registered can declare itself as an employer. To open your file, the CNAS branch asks in particular for a copy of the trade register extract (or the craft card or licence), the tax registration card (NIF), the NIS statistical number, the declaration of existence, the articles of association for a company, proof of premises and the business's bank details. If your setup is not finished, finish it first: hiring before you officially exist means employing someone you cannot declare.

to declare your employer activity after the first hire

10 days

to register each employee after hiring

10 days

overall CNAS contribution rate

34.5%

monthly taxable salary below which no income tax is due

30,000 DA

Step 1: choosing the right contract

In Algeria, the contract of indefinite duration (CDI) is the rule. Law No. 90-11 of 21 April 1990 on employment relations restricts fixed-term contracts (CDD) to specific situations, and a CDD signed outside them is treated as a CDI. For a first employee in a lasting job (reception, sales, accounting, production), it is therefore almost always a CDI.

Step 2: declaring yourself as an employer and registering the employee

CNAS (the National Social Insurance Fund for Salaried Workers) expects two filings. The first registers your business as an employer: the activity declaration, on form IM-03, lodged with the CNAS branch of your wilaya (province) within 10 days of your first hire. The second registers each employee: the registration request, due within 10 days of their hiring. Both can be prepared on the CNAS e-declaration portal.

Step 3: working out pay and contributions

CNAS contributions amount to 34.5% of the contribution salary: 25% paid by the employer, 9% withheld from pay and 0.5% for the social welfare fund. You withhold the employee's share from their pay and pay the whole amount to CNAS. The calculation below uses a salary of 40,000 DA as an example.

In this example, the gross salary after the CNAS deduction is 36,400 DA. Income tax on this salary is 2,272 DA, so the net pay is 34,128 DA. For the business, payroll costs the gross salary plus the 10,200 DA of contributions that are not withheld from pay.

Income tax on the salary

The employee's income tax (IRG, impôt sur le revenu global) is withheld at source by the employer, on the taxable salary (after the social security deduction), using the progressive scale of the Direct Taxes Code. Since the 2020 Supplementary Finance Law, taxable salaries of up to 30,000 DA a month are exempt from IRG. A first employee paid close to the SNMG (minimum wage) therefore often pays no IRG, but payroll still has to be calculated and declared correctly.

Step 4: filing and paying on each deadline

Where will your employee work?

Domiciliation gives your company a registered office address, not a workstation. As soon as someone works for you every day, they need a real place, and that is the address the contract will give as the place of work. In Dely Brahim, Neuron Cowork rents private offices: 15,000 DA a month unfurnished, 20,000 DA a month furnished, with internet, electricity, cleaning, coffee machine and printer included.

Common mistakes

• Having someone work "on trial" without registering them with CNAS.
• Signing a fixed-term contract for a permanent job: it will be treated as a CDI.
• Forgetting the G n°50 ter under the IFU, because it did not apply to you before hiring.
• Calculating income tax on the gross salary without first deducting the CNAS contribution.
• Paying a full-time employee below the SNMG.
• Letting the end of January pass without filing the DAS for the past year.