Payroll Trends in Egypt’s Manufacturing Sector: 2025 Snapshot

Payroll Pressure in Egyptian Manufacturing 

Payroll trends in Egypt’s manufacturing sector show one thing clearly: payroll is one of the biggest running costs in a factory. Raw materials and energy prices move with the market, but salaries are the expense that has to be planned and delivered every month without delay.

According to CAPMAS, the latest available data (2024) shows 3.946 million people working in manufacturing, up 5.4% from 2023. The 2025 figures aren’t published yet, but the headcount is clearly growing. More workers mean larger payrolls and more pressure on finance teams.

Average pay gives a sense of the scale. Factory workers earn about EGP 110,000 a year (around EGP 53 an hour). On the ground, most production staff are in the EGP 3,000–5,000 per month range. Supervisors and managers are higher, between EGP 15,000–30,000 per month.

Payroll also extends beyond the official numbers. Many factories rely on temporary or seasonal staff who are paid informally, often in cash. That leaves companies running two systems side by side: one for registered staff, another for informal workers. Both must be managed at the same time.

For finance leads and owners, payroll is not just about the money going out. It’s about keeping shifts covered and production stable. When salaries are delayed or inconsistent, absenteeism and turnover rise, and lines slow down.

Structural Causes Behind Payroll Strain

The way Egypt’s manufacturing sector is structured makes payroll difficult to manage.

• • Fragmented base: Egypt has about 3.7 million establishments, nearly all privately run. Around 14% are in manufacturing. Many are small workshops with no formal HR or payroll systems.

• • High informality: Over half of all businesses (≈53%) operate informally. In manufacturing, this often means a significant portion of the workforce is paid outside formal payroll (cash envelopes, wallets, or direct transfers). Even large factories often maintain informal tracks for temps and seasonal hires.

• • Mixed workforce: Plants typically combine permanent skilled staff with a revolving group of temps and contractors. Onboarding and offboarding happen constantly, which multiplies payroll work.

• • Overtime culture: Overtime is common, especially in export sectors. It pushes monthly wage bills up in ways that are difficult to forecast.

• • Compliance pressure: Under the new labor law that came into force in September 2025, companies that fail to comply with the EGP 7,000 minimum wage will face fines ranging from EGP 2,000 to 20,000 per affected worker. This raises the stakes for payroll accuracy and timing.

• • Turnover: Market averages suggest 20–30% annual churn in formal manufacturing firms, and 40–50% or more in sectors with heavy reliance on informal or seasonal workers.

All of this leaves payroll as a moving target: formal and informal tracks running side by side, unpredictable wage bills from overtime and churn, and stricter compliance rules that increase the cost of mistakes.

Payroll Costs and Models in Egypt’s Manufacturing Sector

Payroll’s weight in total costs depends on the type of manufacturing.

• • Labor-intensive industries — garments, food processing, small workshops. Payroll can reach 40–50% of operating expenses, since wages are the main input and turnover is high.

• • Capital-intensive industries — plywood, ceramics, cement, glass. Payroll usually sits closer to 10–30%, because machinery, energy, and raw materials dominate.

A feasibility study by the General Authority for Investment (GAFI, June 2021) on plywood manufacturing in Sharqia shows the split clearly:

• • Annual payroll: about EGP 1.5 million for 30 staff.

• • Total costs: about EGP 12.6 million.

• • Share: ~12% of total. If you strip out one-off items like machinery and licenses and focus only on recurring operating costs (raw materials, wages, land fees, marketing), payroll rises to about 32%.

The figures are dated, but the proportions illustrate the contrast between capital-heavy and labor-heavy plants.

For CFOs, the takeaway is simple: payroll may not always be the largest cost line, but it is the most controllable lever. Raw material prices, energy tariffs, and land fees are set externally. Payroll timing and structure are management’s responsibility.

The cost impact shows up in three areas:

• • Overtime: wage bills spike quickly.

Standard formula: base wage × 1.5 × overtime hours.

• • Turnover: market averages suggest 20–30% annual churn in formal firms, and 40–50% or more in sectors relying on informal or seasonal workers. Each departure costs roughly 20–30% of annual salary to replace, when you factor in recruitment, training, and lost output.

• • Payroll delays: a 2024 RISE Egypt and Mastercard study found workers in garment factories spent about 15 minutes each payday collecting wages. In a 1,500-person plant, that equals 375 production hours lost every month.

Scenarios by factory size

• • Small workshop (50–100 staff): payroll-heavy, liquidity fragile, still reliant on cash.

• • Mid-size factory (≈500 staff): multiple sites, regular overtime, rising risk of disputes over pay accuracy and timing.

• • Large manufacturer (5,000+ staff): payroll smaller as a share of spend, but central to meeting export SLAs and staying competitive under currency pressure.

Proof from Market Data and Worker Voices in Egypt’s Manufacturing

Market data and case studies show the direct impact payroll methods have on cost and stability.

• • Digitization outcomes: A 2024 RISE Egypt and Mastercard study covering 9 garment factories (24,000 workers across 5 governorates) found:
    

    • • 53% reduction in payroll admin costs.
    • • 375 production hours saved per month in a factory of 1,500 workers by eliminating payday queues.
    • • 34 percentage point increase in workers preferring to be paid into accounts.
    • • 19 percentage point increase in workers using mobile money for payments, remittances, and bills.

• • Employer perspective: Managers reported payroll became easier and less stressful once digitized. One CEO explained: “Cash payroll was time-taking to count and distribute. We lost production time every payday. After digitization, the process is easier, less stressful, and more reliable.”

• • Worker perspective: Employees reported spending less when paid into accounts and being able to save more. One worker said: “When I received cash, I spent more. Now I withdraw what I need, I save more, and I can manage for the month.” Another added: “At first, workers were worried about using cards. After training, they are now asking to be paid into accounts.”

This last point matters. Pushback is common when changing how people are paid, but experience shows it doesn’t last. Once workers discover the benefits — easier withdrawals, better money management, less risk of cash loss — acceptance grows, and many begin to prefer digital wages over cash.

The lesson is clear: payroll isn’t just a back-office task. The method of payment affects production hours, admin overhead, workforce morale, and even financial behavior.

Payroll System Requirements for Egypt’s Manufacturing Sector in 2025

For payroll to stop draining time and stability, factories need systems that meet clear criteria:

How dopay Solves Payroll Challenges in Egypt’s Manufacturing Sector

dopay is designed around the realities of payroll in Egypt, especially in manufacturing, where high headcount, informality, and turnover make payroll a constant pressure point. Here’s where dopay stands from the criteria we mentioned above:

For CFOs, this means predictable payroll operations. For owners, it means a workforce that gets paid reliably, stays longer, and costs less to manage.

What to Do Next

To make a long story short, payroll is one of the biggest controllable costs in Egypt’s manufacturing sector. It drives admin overhead, production time, worker retention, and compliance risk. The data shows that how salaries are managed directly affects factory performance.

If you want to benchmark your payroll against industry trends and see where savings can be made, book a walkthrough call with dopay to see how payroll can be digitized across your sites, with instant payments and built-in worker support.