Running payroll in Algeria means adapting to a Sunday-to-Thursday working week, calculating deductions through a three-step gross-to-net sequence, and applying a new minimum wage of DZD 24,000 that took effect on January 1, 2026. This guide covers every number an employer needs: the payroll calendar, social security rates, the IRG income tax brackets, and a worked example showing exactly how a DZD 50,000 salary converts to take-home pay. If you’re evaluating whether to hire directly or through an Employer of Record (EOR), start here.
Payroll calendar
Algeria runs a monthly payroll cycle. Employers pay salaries on the last calendar day of the month, so your team always knows when to expect payment.
Working days and hours
The Algerian working week runs Sunday through Thursday. Friday and Saturday are the weekend. Standard hours are 40 per week and 8 per day.
Pay currency
All payroll in Algeria is processed in Algerian Dinars (DZD). You can’t substitute a foreign currency for domestic payroll obligations.
Minimum wage 2026
Algeria raised its national minimum wage to DZD 24,000 gross per month under Decree 26-01, effective January 1, 2026. That’s the first major increase since the previous floor was set at DZD 20,000 in 2020.
Hourly equivalent
The minimum hourly rate works out to DZD 138.46, based on the standard 173.33 working hours per month. Any employer paying hourly workers must ensure this floor is met across all working hours in the month.
What “gross” means here
The DZD 24,000 figure is gross salary before any deductions. The employee’s take-home pay will be lower once CNAS social security (9%) and IRG income tax are withheld. See the gross-to-net section below for a full breakdown.
Gross-to-net calculation
Algeria’s gross-to-net calculation follows three sequential steps: deduct CNAS contributions from gross salary to find the net taxable base, apply the 40% professional allowance to that base to find taxable income, then apply the IRG progressive brackets to taxable income to find the tax due. Every employer running payroll in Algeria needs to run this sequence for each employee each month.
Step 1: deduct cnas (9%) from gross salary
The employee’s CNAS contribution is 9% of gross salary. You withhold this before calculating any tax. The result is the net taxable base.
Step 2: apply the 40% professional allowance
Algeria grants employees a 40% professional allowance on the net taxable base. The minimum allowance is DZD 1,000/month and the maximum is DZD 1,500/month. Subtract this allowance from the net taxable base to arrive at taxable income.
Step 3: apply the irg brackets
Apply Algeria’s progressive IRG brackets to taxable income (see the IRG bracket table below). The monthly IRG amount you calculate is what you withhold from the employee and remit to the Direction Générale des Impôts (DGI).
Worked example: dzd 50,000 gross salary
Here’s how the three steps work for an employee earning DZD 50,000 gross per month.
Step 1: CNAS deduction
| Gross salary | DZD 50,000 |
| CNAS (9% of DZD 50,000) | DZD 4,500 |
| Net taxable base | DZD 45,500 |
Step 2: Professional allowance
The 40% allowance on DZD 45,500 would be DZD 18,200, but the allowance is capped at DZD 1,500/month.
| Net taxable base | DZD 45,500 |
| 40% professional allowance (capped) | DZD 1,500 |
| Taxable income | DZD 44,000 |
Step 3: IRG calculation
Taxable income of DZD 44,000 falls entirely within the DZD 30,001–120,000 bracket.
| First DZD 30,000 | 0% = DZD 0 |
| DZD 30,001–44,000 (DZD 14,000) | 23% = DZD 3,220 |
| Monthly IRG due | DZD 3,220 |
Summary
| Gross salary | DZD 50,000 |
| Less CNAS (9%) | DZD 4,500 |
| Less IRG | DZD 3,220 |
| Net take-home pay | DZD 42,280 |
Employer social security contributions
Beyond the employee deductions you withhold, you as the employer owe a separate social security contribution on top of each employee’s gross salary. The total employer rate is 25.50% of gross. This cost isn’t deducted from the employee’s pay — it’s an additional employer liability you need to budget for when calculating the true cost of employment in Algeria.
Employer contribution breakdown
| Contribution | Rate |
|---|---|
| Social insurance | 11.50% |
| Retirement pension | 11.00% |
| Workplace accidents | 1.25% |
| Unemployment insurance | 1.00% |
| Early-retirement fund | 0.25% |
| Social housing fund (FNPOS) | 0.50% |
| Total employer rate | 25.50% |
For an employee on DZD 50,000 gross, your employer social security bill is DZD 12,750 per month, making the total monthly employment cost DZD 62,750 before any other benefits.
Employee cnas contributions
Algeria’s employee social security system is administered by the Caisse Nationale des Assurances Sociales (CNAS). The employee total is 9% of gross salary, withheld by the employer and remitted on the employee’s behalf. This deduction matters beyond social protection: it directly reduces the base on which IRG income tax is calculated, which is why the gross-to-net sequence starts with CNAS before it touches tax.
Employee cnas breakdown
| Contribution | Rate |
|---|---|
| Social insurance | 1.50% |
| Retirement pension | 6.75% |
| Unemployment insurance | 0.50% |
| Early-retirement fund | 0.25% |
| Total employee CNAS | 9.00% |
Irg income tax brackets
Algeria uses a progressive income tax system called the Impôt sur le Revenu Global (IRG). You calculate the tax on each employee’s monthly taxable income (gross minus CNAS, minus the 40% professional allowance) and withhold the result each pay period. The brackets below are monthly figures. Employers remit the collected IRG to the Direction Générale des Impôts (DGI).
Monthly irg brackets 2026
| Monthly taxable income (DZD) | Rate |
|---|---|
| 0 – 30,000 | 0% |
| 30,001 – 120,000 | 23% |
| 120,001 – 360,000 | 27% |
| 360,001 – 1,920,000 | 30% |
| 1,920,001 – 3,840,000 | 33% |
| Over 3,840,000 | 35% |
The dzd 30,000 exemption threshold
Employees whose taxable income (after CNAS and the professional allowance) doesn’t exceed DZD 30,000/month pay no IRG at all. For lower-wage workers, this zero-rate band substantially reduces the effective tax burden. Employers still need to run the full three-step calculation to confirm where each employee’s taxable income lands.
Mandatory bonuses and additional payments
Algeria doesn’t require a 13th-month salary, an annual bonus, or any other statutory supplemental payment beyond regular monthly wages. Your payroll obligation is monthly base salary, plus any agreed contractual additions. Some employers offer discretionary performance bonuses, but these carry no legal mandate under Algerian labor law.
Frequently asked questions
When is payday in algeria?
Salaries are due on the last calendar day of each month. There’s no grace period built into the law, so employers need their payroll process completed before month-end to hit this date.
What is the minimum wage in algeria in 2026?
The national minimum wage is DZD 24,000 gross per month, or DZD 138.46 per hour, effective January 1, 2026 under Decree 26-01. This is a mandatory floor — no employee can be paid less regardless of industry or contract type.
What’s the difference between employer and employee social security in algeria?
Employees contribute 9% of gross salary to CNAS (withheld by the employer). Employers contribute a separate 25.50% of gross salary on top of that. These are independent obligations: the employee’s 9% comes out of their gross pay, while the employer’s 25.50% is an additional cost on top of the salary you pay.
How does the 40% professional allowance work?
Algeria allows a deduction equal to 40% of net taxable base (gross minus CNAS) before IRG is applied. The allowance is capped at DZD 1,500/month and floored at DZD 1,000/month. For most mid-to-senior salaries the cap applies, so the practical effect is a flat DZD 1,500 reduction in taxable income each month.
Can I hire foreign nationals or expats in algeria?
Algeria doesn’t currently support expat hiring through EOR arrangements. If your workforce plan includes foreign nationals, you’ll need to account for this constraint early in your Algeria market-entry strategy.
Run algeria payroll with confidence
Algeria’s payroll rules are precise: a fixed pay date, a three-step gross-to-net sequence, two layers of social security, and a new minimum wage floor all have to work together correctly every month. Getting any step wrong creates liability with both the DGI and CNAS. RemotePass handles employer payroll compliance in Algeria so you don’t carry that risk alone.
