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EGYPT
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Egypt Payroll and Employer of Record: Employment Contracts
Egypt provides a variety of visas, including the following:
- Work visa: When a foreign individual obtains a work permit, their visa, which may have been a temporary/tourist visa, is changed into a work visa.
Egypt has a variety of visas available, including the following: Temporary/tourist visa: This is a renewable single-entry 30-day tourist visa that can be obtained upon arrival at Egyptian airports. It is also the visa that people get in order to work.
- Ordinary visa: An ordinary visa is good for three to five years and entitles an employee’s spouse to a residence permit for the duration of their work permit.
- Special visa: This visa is for expats who were born in Egypt before May 26, 1952, or who have lived in Egypt for more than 20 years since that date.
- Special visa: The special visa is intended for expats who were born in Egypt before May 26, 1952, or who have lived in Egypt for more than 20 years after that date.
- It is good for ten years and is renewable.
A work permit will also be required for foreign nationals. The first step is to secure a temporary or tourist visa and then convert it to a work visa. If the employee applies to the Ministry of Manpower and Immigration, this procedure may result in a work permit. The individual will also be required to provide proof of potential work as well as a clean bill of health.
PAID TIME OFF
Annual Vacation
- Employees in Egypt are entitled to 21 days of paid annual leave every year provided they have been engaged for at least six months.
- Employees who have worked for the company for 10 years in a row or who are above the age of 50 are entitled to 30 days of paid yearly leave.
Sick
- Employees are entitled to up to six months of paid sick leave and must present a certified medical certificate proving their illness.
- The employee is entitled to 75 percent of the usual wage rate for the first 90 days of sick leave. Following that, this is increased to 85 percent of the regular rate of pay for 90 days.
Maternity
- Female workers who have worked for ten months in a row are entitled to 90 days of paid maternity leave and 45 days after the birth of a child.
- Employees are entitled to two periods of maternity leave during the course of their employment.
- When she returns to work, she is entitled to two thirty-minute nursing breaks or a combined one-hour breastfeeding break per day for up to two years following her birth date.
Paternity
- There are no legal provisions for paternity leave.
Family
- Employers with more than 50 workers are required to give women 24 months of unpaid leave for each child.
- Female employees who work for a firm with at least 50 employees are eligible for up to two years of unpaid leave to care for their child. An employee may take this form of leave twice over the course of his or her employment.
National Holidays
- Egypt has a total of 16 public holidays which are paid.
Other Paid Time Off
Depending on the conditions of the Collective Agreement/Employment Contract, an employee may be granted extra leave kinds, with the permission of both the employer and the employee, for the following:
- Employees are entitled to up to six days of unpaid leave per year and are not obliged to provide a justification for their absence.
- Employees are permitted to take a maximum of two days of leave each year.
- Casual leave is counted as yearly leave.
STATUTORY EMPLOYEE BENEFITS
Unemployment
- Unemployment payments are offered to employees who have contributed for at least 6 months, including the three months immediately preceding unemployment, and who did not leave work willingly, owing to misbehaviour, or due to denial of a reasonable job offer. Unemployed people must be available to work and registered with the manpower bureau. Benefits are equivalent to 60% of the covered employee’s final monthly income for up to 16 weeks, or up to 28 weeks if the insured employee has contributed for at least 24 months.
Workers Compensation
For private-sector employees, 3% of monthly covered payroll is covered; for public-sector employees, 2% is covered; and for civil servants, 1% is covered.
- The lower limit of the public servant monthly wage scale is used to compute contributions as the minimum monthly earnings.
- The monthly wage scale for government servants has a lower limit of 781.25 pounds (July 2019). Every July, this amount will climb by 25%.
- The maximum monthly earnings for contribution purposes is 5,710 pounds (July 2019).
Conditions for Eligibility
A job injury or occupational sickness must be evaluated. There is no time limit for qualifying.
Social Security
Employee social security in Egypt includes:
- Investing in pension funds
- Disability and life insurance
- Accident insurance for the workplace
- Insurance for sickness and injuries
- Unemployment benefits
- Pensioners and the elderly get social care.
Payments to social security are divided into two categories: fixed contributions for incomes below a particular level and variable contributions for earnings over that barrier.
Retirement
The system for the Old Age Pension (OAP)
- Egypt’s new OAP includes both contributory and non-contributory plans. All inhabitants aged 65 and up who have paid payments are eligible for the contributory system. Reforms in 2013 reduced contribution rates to 30.5 percent, with the business paying 19.5% and the employee paying 11%. Contributions that are quite substantial are rewarded with very high monthly pension payments of 75-88 percent of the claimant’s final net wage before retirement, disability, or death, computed depending on length of contributions. The non-contributory system is open to all Egyptians aged 65 and over who live in Egypt and do not get any other government income or pension.
- Those who qualify for the non-contributory plan get monthly payments equivalent to 18% of their national earnings after taxes.
Health
- Medical Aid is a private option and is based on an employee voluntary basis to sign up or for the employer to offer it.
PRIVATE EMPLOYEE BENEFITS
Workers Compensation
- Private work accident insurance is available in Egypt.
Retirement
- Private retirement/pension funds are available as options in Egypt.
Health
- Private healthcare is available in Egypt and offers high standards of care and medical services.
Insurance
- There is private life insurance available in Egypt.
PERSONAL INCOME TAX
Tax Year
- Tax year runs from January 1st to December 31st.
Tax Tables
| Slide | Slide % | From | To | Slide Range | Tax Applied |
| 1 | 0.0% | – | 30,000 | 30,000 | – |
| 2 | 10.0% | 30,000 | 45,000 | 15,000 | 1,500 |
| 3 | 15.0% | 45,000 | 60,000 | 15,000 | 2,250 |
| 4 | 20.0% | 60,000 | 200,000 | 140,000 | 28,000 |
| 5 | 22.5% | 200,000 | 400,000 | 200,000 | 45,000 |
| 6 | 25.0% | 400,000 | 1,200,000 | 800,000 | 200,000 |
| 7 | 27.5% | Above 1,200,000 |
Taxation Method
- The taxation approach is a progressive income tax.
Double Taxation
- Egypt has multiple double taxation agreements.
Residence Requirements
In any of the following circumstances, a natural person is considered an Egyptian resident:
- If the person has a permanent address in Egypt.
- If the individual spends more than 183 days in Egypt, either continuously or intermittently, throughout a 12-month period, taking into account any double taxation treaties (DTTs) between Egypt and other countries that may impact the determination of this period.
- If the individual is an Egyptian who fulfils the duties of his or her employment in another country yet receives money from the Egyptian treasury.
Payroll Calendars
- Payroll is done monthly in Egypt, and payments must be made by the 5th of the following month.
Rebates & Tax Credits
- Individual tax credit regulations do not exist in Egyptian tax legislation.
Health Insurance
- The Egyptian healthcare system is diverse, with a wide range of healthcare providers from both the public and commercial sectors. The government provides basic universal health care, but private services are also accessible for individuals who can afford them.
Unemployment
- Unemployment payments are offered to employees who have contributed for at least 6 months, including the three months immediately preceding unemployment, and who did not leave work willingly, owing to misbehaviour, or due to denial of a reasonable job offer. Unemployed people must be available to work and registered with the manpower bureau. Benefits are equivalent to 60% of the covered employee’s final monthly income for up to 16 weeks, or up to 28 weeks if the insured employee has contributed for at least 24 months.
Social Security
Employee social security in Egypt includes:
- Investing in pension funds
- Disability and life insurance
- Accident insurance for the workplace
- Insurance for sickness and injuries
- Unemployment benefits
- Pensioners and the elderly get social care.
Payments to social security are divided into two categories: fixed contributions for incomes below a particular level and variable contributions for earnings over that barrier.
PAYROLL ELEMENTS
Income
- Salary, earnings, bonuses, overtime pay, taxable benefits, allowances, and certain lump sum perks are examples of remuneration (revenue from employment). Profits or losses made by a company or trade. Income or profits derived from an individual’s status as a trust beneficiary.
Bonuses
- Any bonus granted to the worker in addition to his wage, and all that is compensated to him due to his truthfulness or reliability, once these bonuses are recommended to the individual or collective Labour contracts or in the work articles of association, as well as that which has become conventionally payable once meeting the qualities of generality, continuity, and constancy.
Allowances
Effective 1st July 2023, the personal exemption amount per year has increased to EGP 15 000.
In Egypt, there are no family allowances.
Benefits in Kind
Meals for employees, communal transportation for employees or its cost, medical care, equipment and uniforms for work purposes, and accommodation given by the company for employees are all examples of collective benefits-in-kind, according to the new tax legislation. The following requirements must be completed in order to be excluded from in-kind benefits.
- Meals should be served in the workplace.
- Regardless of whether the business owns or rents the vehicle, communal transportation should be available to all employees or a specific group of employees.
- The employer owns or rents the dwelling, which is necessary for the job.
Investment Income
- The difference between the purchase cost and the fair value/selling price of a share is defined as capital gains under the new law. The capital gain will be determined as the difference between the acquisition price or the closing price on 30 June 2014 (whichever is higher) and the selling price for listed shares purchased before 1 July 2014 and sold after that date.
- Individuals who are residents are subject to capital gains tax (CGT).
- Capital gains realized by resident shareholders through the sale of listed shares on the EGX should be subject to CGT at a rate of 10%; however, this tax should be postponed until the end of 2021, and then implemented on January 1, 2022.
- This tax-free period does not apply to T-bonds.
- Capital gains on the sale of unlisted shares/securities, on the other hand, should be taxed according to the individual income tax levels.
- Foreign shares/securities (invested outside of the United States): Capital gains from shares held in a foreign country would be taxed according to the individual income tax levels (if Egypt is the center of commercial industrial or professional activity of such individuals).
- Non-residents are subject to the same capital gains tax treatment as residents.
- Non-resident shareholders’ capital gains from the sale of listed shares on the EGX should not be subject to CGT (including T-bonds).
- With the exception of profits realized from T-bills, which are not taxable, capital gains realized from the sale of unlisted shares/securities should be subject to personal income tax (PIT) at progressive rates up to a rate of 25%.
- Capital gains from foreign stock investments should not be taxed in Egypt.
- CGT imposed on listed shares on the EGX (for resident and non-resident owners) is part of the announced amendments to the legislation as part of COVID-19 measures, as indicated in the Significant developments section of the Corporate tax summary.
- Individuals who live in the United States are subject to the dividend income tax.
- Dividends given to resident shareholders by Egyptian firms not listed on the EGX will be subject to a 10% WHT. WHT of 5% will be applied to dividends paid to resident shareholders by Egyptian firms listed on the EGX.
- Individuals who are not residents of the United States are subject to the dividend income tax.
- Dividends given to non-resident shareholders by Egyptian firms not listed on the EGX will be subject to a 10% WHT. WHT of 5% will be applied to dividends paid to non-resident shareholders by Egyptian firms listed on the EGX.
Retirement Funding
The system for the Old Age Pension (OAP)
- Egypt’s new OAP includes both contributory and non-contributory plans. All inhabitants aged 65 and up who have paid payments are eligible for the contributory system. Reforms in 2013 reduced contribution rates to 30.5 percent, with the business paying 19.5% and the employee paying 11%. Contributions that are quite substantial are rewarded with very high monthly pension payments of 75-88 percent of the claimant’s final net wage before retirement, disability, or death, computed depending on length of contributions. The non-contributory system is open to all Egyptians aged 65 and over who live in Egypt and do not get any other government income or pension.
- Those who qualify for the non-contributory plan get monthly payments equivalent to 18% of their national earnings after taxes.
Health Insurance
- The Egyptian healthcare system is diverse, with a wide range of healthcare providers from both the public and commercial sectors. The government provides basic universal health care, but private services are also accessible for individuals who can afford them.
Risk Insurance
N / A
Taxable Income
- Individual income tax is levied on resident persons’ total net income for money generated in Egypt, as well as income obtained outside Egypt for residents whose commercial, industrial, or professional activities are centered in Egypt. In addition, non-resident people’ income generated in Egypt is subject to taxation.
Allowable Deductions
- Premiums for life and health insurance on the taxpayer, in one’s or one’s spouse’s or minor children’s names, as well as any insurance premiums for pension entitlement, are deducted if the policy is completed with an insurance business registered with the Egyptian Insurance Supervisory Authority.
- The entire deductible amount for employee contributions to private insurance funds, life and health insurance premiums, and insurance premiums for pension entitlement cannot exceed 15% of net income or EGP 10,000, whichever is less. There shall be no future deductions of the same payments and premiums from any other industrial, commercial, or non-commercial revenue, or real estate income.
PAYROLL TAXES AND EMPLOYER CONTRIBUTIONS
Payroll Taxes
- The employee contribution is 11% of the total social security wage.
- The minimum and maximum subscription wages have been set at EGP 1 700 and EGP 10 900 respectively as of 1 January 2023.
- Starting in January 2021, the minimum and maximum limits will be increased by 15% on 1 January of each year for a period of seven years.
- These two restrictions will be raised by the rate of inflation beginning of 1 January 2028, with the minimum and maximum limits being approximated to the nearest hundred pounds.
Unemployment
- Unemployment payments are offered to employees who have contributed for at least 6 months, including the three months immediately preceding unemployment, and who did not leave work willingly, owing to misbehaviour, or due to denial of a reasonable job offer. Unemployed people must be available to work and registered with the manpower bureau. Benefits are equivalent to 60% of the covered employee’s final monthly income for up to 16 weeks, or up to 28 weeks if the insured employee has contributed for at least 24 months.
Social Security
- The employee contribution is 11% of the total social security wage.
- The minimum and maximum subscription wages have been set at EGP 1 700 and EGP 10 900 respectively as of 1 January 2023.
- Starting in January 2021, the minimum and maximum limits will be increased by 15% on 1 January of each year for a period of seven years.
- These two restrictions will be raised by the rate of inflation beginning of January 2028, with the minimum and maximum limits being approximated to the nearest hundred pounds.
Workers Compensation
- For private-sector employees, 3% of monthly covered payroll is covered; for public-sector employees, 2% is covered; and for civil servants, 1% is covered.
- The lower limit of the public servant monthly wage scale is used to compute contributions as the minimum monthly earnings.
- The monthly wage scale for government servants has a lower limit of 781.25 pounds (July 2019). Every July, this amount will climb by 25%.
- The maximum monthly earnings for contribution purposes is 5,710 pounds (July 2019).
Conditions for Eligibility
- A job injury or occupational sickness must be evaluated. There is no time limit for qualifying.
ADMINISTRATION
Income
- The taxable period is the calendar year, which begins on January 1 and ends on December 31, or any 12-month period used to calculate income tax.
- Individuals are obliged by law to file an annual tax return with the IRS. An individual’s filing deadline is on or before the 31st of March after the conclusion of the fiscal year to which the return relates.
- On a monthly basis, tax on work income is withheld at source. Employers must file quarterly tax statements in the months of January, April, July, and October.
- Employers must file an annual tax reconciliation to the tax authorities on January 1st of each year, detailing the yearly salary and earnings of each employee, as well as the employer’s tax liability.
Payroll Taxes
- The employee contribution is 11% of the total social security wage.
- The minimum and maximum subscription wages have been set at EGP 1 700 and EGP 10 900 respectively as of 1 January 2023.
- Starting in January 2021, the minimum and maximum limits will be increased by 15% on 1 January of each year for a period of seven years.
- These two restrictions will be raised by the rate of inflation beginning of January 2028, with the minimum and maximum limits being approximated to the nearest hundred pounds.
Unemployment
- Unemployment payments are offered to employees who have contributed for at least 6 months, including the three months immediately preceding unemployment, and who did not leave work willingly, owing to misbehaviour, or due to denial of a reasonable job offer. Unemployed people must be available to work and registered with the manpower bureau. Benefits are equivalent to 60% of the covered employee’s final monthly income for up to 16 weeks, or up to 28 weeks if the insured employee has contributed for at least 24 months.
Social Security
Employee social security in Egypt includes:
- Investing in pension funds
- Disability and life insurance
- Accident insurance for the workplace
- Insurance for sickness and injuries
- Unemployment benefits
- Pensioners and the elderly get social care.
Payments to social security are divided into two categories: fixed contributions for incomes below a particular level and variable contributions for earnings over that barrier.
Workers Compensation
- For private-sector employees, 3% of monthly covered payroll is covered; for public-sector employees, 2% is covered; and for civil servants, 1% is covered.
- The lower limit of the public servant monthly wage scale is used to compute contributions as the minimum monthly earnings.
- The monthly wage scale for government servants has a lower limit of 781.25 pounds (July 2019). Every July, this amount will climb by 25%.
- The maximum monthly earnings for contribution purposes is 5,710 pounds (July 2019).
Conditions for Eligibility
A job injury or occupational sickness must be evaluated. There is no time limit for qualifying.
Statutory Benefits
- Unemployment: Unemployment payments are offered to employees who have contributed for at least 6 months, including the three months immediately preceding unemployment, and who did not leave work willingly, owing to misbehaviour, or due to denial of a reasonable job offer.
- Paid sick leave: Employees are entitled to up to six months of paid sick leave and must present a certified medical certificate proving their illness.
- Maternity leave: Female workers who have worked for ten months in a row are entitled to 90 days of paid maternity leave and 45 days after the birth of a child.
- Retirement: The system for the Old Age Pension (OAP). Egypt’s new OAP includes both contributory and non-contributory plans.
Employee Benefits
- In Egypt, these are some for the guaranteed employee benefits. Time off for the country’s 12 national holidays as well as yearly vacation time. After six months of employment, employees are entitled to 21 days of paid yearly leave. They are entitled to a month of paid leave after working for ten years or reaching the age of 50.
- Because Egypt has a large Muslim population, workers who have worked for your firm for five years should be eligible for a one-time, one-month compensated religious trip.
LEGISLATION
- The Labor Law
STATUTORY BODIES
- Egyptian Tax Authorities
