Egypt salary tax + social insurance in 2026: employer guide

Egyptian payroll has a rhythm you won't find in most African countries: every January the insurable salary limits for social insurance step up, and every second or third year the personal income tax brackets get rewritten. Law 7 of 2024 rewrote the bracket table — adding two new high-income bands and widening the zero-tax threshold — and the Ministry of Finance confirmed the January 2026 insurable-salary adjustment in a circular issued in December 2025.

If your payroll system was last calibrated before March 2024, the 2026 numbers coming out of it are wrong in two places at once. Here's how Egyptian payroll actually computes in 2026.

What changed under Law 7 of 2024

Three material changes for salary earners:

1. Zero-tax threshold widened. The first EGP 40,000 of annual taxable income is now zero-rated (up from EGP 30,000 under the prior regime).
2. New top bands introduced. The bracket table now runs to 27.5% for incomes above EGP 1.2 million/year. Previously the ceiling was 25%.
3. Personal exemption held at EGP 20,000/year. The standard deduction every resident employee claims against taxable income did not move.

The Egyptian Tax Authority (ETA) administers salary tax; the National Authority for Social Insurance (NASI) administers the social insurance scheme under Law 148 of 2019.

1. Salary tax — the monthly PAYE equivalent

Egypt runs salary tax on an annual basis, divided by 12 for monthly withholding. Compute annually, withhold monthly.

The 2026 bracket table (Law 7 of 2024):

Band	Annual taxable income (EGP)	Rate
1	First 40,000	0%
2	Next 15,000 (40,001 → 55,000)	10%
3	Next 15,000 (55,001 → 70,000)	15%
4	Next 130,000 (70,001 → 200,000)	20%
5	Next 200,000 (200,001 → 400,000)	22.5%
6	Next 800,000 (400,001 → 1,200,000)	25%
7	Above 1,200,000	27.5%

Applied annually, then divided by 12.

2. Start with gross pay and work out taxable income

Egyptian taxable income excludes several categories before the bracket table applies:

• Personal exemption: EGP 20,000/year for every resident employee — automatic, no claim required
• Social insurance contributions (employee side): deductible from taxable income
• Private pension / health insurance contributions (employee side, up to a cap): deductible
• End-of-service gratuity up to the statutory threshold: tax-free

For this worked example, an Egyptian employee on EGP 600,000 annual gross, broken down as:

Component	Annual (EGP)
Basic salary	360,000
Fixed allowances	180,000
Variable (bonus, commission)	60,000
Gross annual pay	600,000

3. Apply social insurance (and deduct from taxable income)

Social insurance under Law 148 of 2019 is contributed by both sides. From January 2026, the insurable salary limits are:

Limit	Monthly (EGP)	Annual (EGP)
Minimum insurable salary	2,300	27,600
Maximum insurable salary	14,500	174,000

Both limits are indexed annually each January — confirm the current figure on the NASI portal before the first January run each year.

Rates:

Side	Rate	Base
Employee	11%	Insurable salary (between min and max)
Employer	18.75%	Insurable salary (between min and max)

Every component of gross pay is insurable up to the cap — basic + allowances + regular bonus — until the maximum insurable salary bites.

For our EGP 600,000 employee, the insurable salary is capped at EGP 174,000/year:

Employee social insurance = 174,000 × 11% = EGP 19,140/year Employer social insurance = 174,000 × 18.75% = EGP 32,625/year

The employee portion reduces taxable income.

4. Compute taxable income and apply the brackets

Taxable income = Gross − Personal exemption − Employee social insurance = 600,000 − 20,000 − 19,140 = EGP 560,860

Applying the 2026 bracket table:

• Band 1: 40,000 × 0% = 0
• Band 2: 15,000 × 10% = 1,500
• Band 3: 15,000 × 15% = 2,250
• Band 4: 130,000 × 20% = 26,000
• Band 5: 200,000 × 22.5% = 45,000
• Band 6: 160,860 × 25% = 40,215

Annual salary tax = EGP 114,965 ≈ EGP 9,580/month

5. Net pay

Line	Annual (EGP)
Gross pay	600,000
Less: Employee social insurance	(19,140)
Less: Salary tax	(114,965)
Net pay	465,895

Monthly net ≈ EGP 38,825.

Employer-side social insurance of EGP 32,625/year is a separate P&L line — not on the payslip but real cash out.

6. Remittance and filings

• Salary tax: monthly by the 15th of the following month, with an annual reconciliation due by 1 April of the following year.
• Social insurance: monthly by the 15th to NASI, with quarterly and annual reconciliations.

Late filing penalties for salary tax under Law 206 of 2020 (Unified Tax Procedures) start at EGP 3,000 and scale with the delay. Social insurance late penalties follow a separate framework under Law 148 of 2019 — typically 0.5% per month of the unpaid amount, with a floor.

7. The quirks that surprise first-time Egyptian employers

Three things Gulf-trained or European-trained HR teams consistently get wrong:

1. End-of-service gratuity is not optional. Egyptian labour law entitles employees to a month of salary per year of service after five years, subject to specific triggers (termination without cause, resignation after 10 years, etc.). Budget for it as an accrual from day one — don't treat it as a discretionary bonus.
2. Fixed-term contracts convert to indefinite. If a fixed-term contract is renewed once, it becomes indefinite by operation of law. The "rolling 1-year" model used in many jurisdictions doesn't survive Egyptian labour courts.
3. The 13th-month salary is common but not statutory. Unlike some African markets, Egypt has no statutory 13th-month. But customary practice at mid-size and large employers is either a 13th-month bonus or an equivalent year-end incentive — omitting it hurts retention even if it's legally optional.

Common mistakes

1. Running the pre-March 2024 brackets. The bands were updated by Law 7 of 2024. Systems still stopping at 25% under-tax high-income employees.
2. Forgetting the EGP 20,000 personal exemption. Every resident employee gets it, automatically. Missing it over-withholds by EGP 2,000–5,500/year depending on bracket.
3. Not updating insurable salary limits every January. The min/max step up annually. Freezing them at last year's figure under- or over-remits social insurance the entire year.
4. Applying 11% / 18.75% to full gross. Rates apply only within the insurable band — between the minimum and maximum. Apply to uncapped gross and you over-remit for high earners.
5. Computing salary tax monthly, not annually. Egypt's bracket thresholds are annual. Monthly computation pushes low-income earners into the wrong band.
6. Treating social insurance as employee-only. The employer owes nearly double the employee's rate. Founders importing from payroll systems built around flat employer percentages consistently under-budget.
7. Missing the end-of-service gratuity accrual. Accruing it from year one keeps the P&L honest; ignoring it creates a surprise liability that hits in the termination year and can eat 8–10% of annual payroll costs.

Does AnooreHR handle this?

Yes — AnooreHR runs Egyptian salary tax and social insurance as a profile-driven pack: brackets, personal exemption, insurable-salary min/max, and end-of-service gratuity rules all live in JSON files. When NASI revises the January limits, a profile update replays through every active Egyptian employee — no code change, no reconciliation scramble.

Egypt is on the 2026 AnooreHR country rollout, pending local tax advisor sign-off before general availability. If you run Egyptian payroll and want to preview the flow with the current bracket table applied to your real salary structure, book a demo — we'll walk through one payslip line by line.

Related: How AnooreHR handles payroll · HR and People management features · See pricing