Payroll in Algeria: a restricted activity

Algerian labour law is French in inspiration, which makes its categories legible to a French HR department, but the monetary and administrative environment imposes constraints not found in the European Union. The Algerian dinar (DZD) is not convertible: payroll is run locally in dinars, and currency movements fall under a strict exchange control regime that must be anticipated when the budget is first built.

French and Arabic coexist in business practice, but official documents and dealings with the administration are in Arabic, and the Arabic version prevails.

France and Algeria are bound by a long-standing bilateral social security convention which organises posting and the recognition of insurance periods, among other matters; how it applies in a given case should be verified rather than assumed. Finally, keeping accounts for third parties is reserved to registered professionals, which appreciably narrows the field of admissible providers. Payroll documents and payslips are produced locally and archived in Algeria.

The employer makes itself known to the tax administration, which allocates a tax identification number, and to the Caisse nationale des assurances sociales des travailleurs salariés (CNAS, the national social insurance fund for employees), with which it declares its existence and enrols its staff. Managers and partners working in the company fall under a separate fund, the Caisse nationale de sécurité sociale des non-salariés (CASNOS): the two affiliations coexist.

Whether the planned activity requires a local presence must have been settled first. Algeria closely regulates how foreign companies may operate, and employing locally without a structure is hard to secure: incorporating an entity or working through an established local partner is the usual route.

Writing is required for fixed-term relationships, indefinite duration remaining the principle. Internal rules are filed with the labour inspectorate above a certain headcount, and recruiting a foreign national requires a work permit granted after the employment situation has been examined.

Income tax on wages and salaries is withheld at source each month, at the same time as contributions are paid to CNAS. An annual salary return then summarises the year. Payslips are compulsory and the employer maintains the statutory payroll registers.

Termination procedures are regulated, with collective redundancy governed by a regime of its own.

The two-fund structure is the first point to absorb: CNAS for employees and CASNOS for the self-employed, with two separate up-to-date certificates. A file containing only the first is incomplete, including when assessing a partner's own compliance.

Exchange control is the second real constraint. The dinar does not transfer freely, expatriate remuneration requires an explicit legal split between the local portion and any portion paid abroad, and every clause providing for payment in foreign currency should be examined before signature.

Online verification of CNAS certificates deserves to be routine. The electronic filing portal allows a certificate to be authenticated from its number, a safeguard that is rare in the region and that it would be a pity not to use. It costs nothing and removes any doubt about a forwarded copy.