Egyptian Pound (EGP)
ON THIS PAGE:
Hire in Egypt
Taxes and Social Security Contribution
Get expert guidance from the Lano team to compare your options and keep growing.
Book a demo
Egypt offers international organizations a range of opportunities. Its strategic location at the junction between Africa and the Middle East gives businesses access to numerous consumer markets and the country’s modern infrastructure allows for frictionless trading. With a population of over 100 million, the country offers foreign employers a large talent pool to choose from and the wide use of European languages, above all English, is a big advantage when hiring employees in Egypt.
Employment contracts can be concluded for a definite or an indefinite term or for the duration of a specific project or task. Regardless of their duration, employment agreements require a written form. The contract language is Arabic and the employer must issue three copies of the contract, one copy for the company’s own records, one copy for the employee and one copy for the social security authority.
A probationary period can be stipulated in the employee’s employment contract. However, the duration of the trial period cannot exceed 3 months.
Get expert guidance from the Lano team to compare your options and keep growing.
Employees in Egypt typically work 8-hour days, which leads to a 48-hour workweek for employees working six days a week. However, private sector employees typically only work a five-day week. The usual working days are Sunday to Thursday. Under certain conditions, an employee’s regular daily working hours can be increased to 9 hours.
Employees are allowed to work overtime within certain legal limits. Overtime pay is stipulated by law and varies depending on the time of day and the day of the week. On normal working days, employees who are required to work overtime must be compensated with a 35% wage supplement for each additional hour worked. For overtime during night-time hours, employees must be paid at least 70% more. Employees who have to work on a public holiday are entitled to double pay.
Payroll in Egypt is generally processed once a month. Payments to employees are usually made on the 5th of the following month.
In 2022, the national minimum wage for private sector employees stands at EGP 2,400 per month. The minimum wage rate for the public sector is currently set at EGP 2,700 per month.
Employees who are unable to work due to sickness or injury are entitled to paid sick leave. Sick leave in Egypt is limited to 180 days per year during which the employee is protected from dismissal and receives sick pay from the social security authority.
During the first three months of sick leave, the amount of sick pay is equal to 75% of the employee’s social security salary – this is the salary based on which social security calculations are calculated. Thereafter, the sick pay rate increases to 85%. The employee must provide a medical certificate in order to receive sickness benefits.
There are no legal provisions for a 13th salary, but it’s mandatory to pay employees an annual increment which must equal at least 7% of the basic social insurance salary.
Employees and employers in Egypt are subject to the following tax and social security contribution rates (as of 2022):
22.5% corporate tax
14% VAT (standard rate)
up to 25% *
Individual income is subject to progressive tax rates ranging from 0% to 25%.
18.75% unified social insurance and pension contribution
11% unified social insurance and pension contribution
* Income tax on individual income is progressive. The tax brackets and rates are set as follows. The tax brackets refer to annual income.
Up to EGP 15,000: 0%
EGP 15,000 to EGP 30,000: 2.5%
EGP 30,000 to EGP 45,000: 10%
EGP 45,000 to EGP 60,000: 15%
EGP 60,000 to EGP 200,000: 20%
EGP 200,000 to EGP 400,000: 22.5%
Above EGP 400,000: 25%
Please note that the progressive rates detailed above only apply to annual taxable income lower than EGP 600,000. Higher annual taxable income is subject to a different tax progression, starting with higher base rates. For instance, if an individual’s annual taxable income is between EGP 700,000 and EGP 800,000, the first EGP 45,000 of this income are not taxed at progressive rates of 0%, 2.5% and then 10%, but are taxed entirely at a rate of 10%.
** There is a minimum and a maximum salary cap for calculating social security contributions, which are set at EGP 1,400 and EGP 9,400 per month. The government has announced to increase the minimum and maximum salary caps by 15% each year until 2028. The changes enter into effect on 1 January each year. In 2023, the minimum cap will be EGP 1,700 and the maximum cap EGP 10,900.
Employees who have completed their first year of service are entitled to 21 paid vacation days per year. During the first year of employment, the employee’s leave entitlement is calculated on a prorated basis. After 10 years of service, the employee’s annual leave entitlement increases to 30 years. Employees over 50 also get 30 days of paid leave per year.
In addition, employees receive a paid day off on occasion of the country’s national public holidays. The latter are set by the Ministry of Manpower and Immigration. The number of public holidays is limited to a maximum of 14 days within one year.
Female employees are entitled to 90 days of fully paid maternity leave if they have worked for their current employer for at least 10 continuous months. Maternity leave can start before the expected date of birth, but this is not mandatory. During the first 45 days after the delivery, however, the employee is not allowed to work.
After her return to work, the employee is allowed one hour of breastfeeding leave per day. This entitlement is valid for the first 24 months after the child’s birth. Maternity leave can only be granted twice during the employee’s service period. There are no legal provisions for paternity leave.
The Labor Law does not provide for parental leave other than maternity leave.
In addition to the leave entitlements detailed above, Egypt’s Labor Code provides for emergency leave which must be granted to employees facing an unexpected emergency situation. Emergency leave is limited to 6 days per year and 2 days at a time. Although emergency leave is mentioned separately in the Labor Code, the leave days are deducted from the employee’s annual leave entitlement.
Furthermore, the law establishes a once-in-a-lifetime right to pilgrimage leave. According to the legal provisions, employees who have completed at least 5 years of service are entitled to paid leave for a period of up to one month which can be used to make a pilgrimage.
The procedures for terminating an employee vary depending on the type of employment contract. Employers wishing to terminate an employee hired under a fixed-term contract before the contract’s expiry date can only do so if they provide the employee with compensation equal to the wages and salaries the employee still would have earned until the end of the contract.
Indefinite contracts can be terminated by each party at any given moment as long as the termination reason is in line with the legal provisions regarding employee dismissal and statutory notice periods are respected. The statutory notice period for employees whose length of service is less than 10 years is 60 days. For employees with a length of service exceeding 10 years, the notice period increases to 90 days. There is no legal entitlement to severance pay for dismissed employees.
This country guide is for informational purposes only and should not be construed as legal advice. The content of this guide contains general information, and although we update this guide regularly, it may not reflect current legal developments. Lano Software GmbH disclaims any liability for any actions you take or refrain from taking based on the content contained in this country guide.
Get professional advice and tips on hiring remote talent and scaling businesses globally. Join over 50 000 subscribers now.
One smart platform with everything you need to build and pay your global team. Do you have questions about our solutions, pricing or do you need a consultation? Fill out the form and we'll get back to you shortly.
Verified Partner since 2021
4.9/5 on Capterra
Confirmation: Lano Intro - 30 minutes
© Lano Software GmbH 2022