Your guide to payroll in Egypt

The Egyptian payroll system is at a crucial intersection of social insurance regulations, tax law, and labor legislation. Not maintaining payroll compliance in Egypt can lead to penalties. The payroll in the country is primarily governed by the Labor Law No. 14 of 2025. 

Employers should understand salary structures, mandatory deductions for social security and related items, tax slabs, and what the Egyptian Tax Authority expects from them. 

This guide cuts through the complexity of Egypt payroll processing and gives a practical and clear breakdown of how to pay employees in Egypt – right from gross salary to the final payout. Learn how Payoneer Workforce Management, a trusted EOR service, helps with payroll management in Egypt. 

Egypt payroll: Wages and other payments

Employers in Egypt have to account for a wide range of additional payments along with the monthly base salary. 

These include the likes of bonuses, overtime, allowances, and end-of-service gratuities. There are specific rules under the Egyptian Labor Law No. 14 of 2025, governing these payments. 

Payroll cycle in Egypt

Similar to Nigeria, the payroll cycle in Egypt is monthly. Employees usually get paid on the last working day of the month. 

Minimum wage

The minimum wage in Egypt is 7, 000 Egyptian Pound (gross per month). The payout currency in the country is the Egyptian Pound (EGP). 

Overtime pay

When an employee works above the normal working hours in Egypt, it is considered overtime hours. 

• Employees can work a maximum of two hours of overtime per day.
• Employers are advised to adhere to a maximum of 10 hours of total working hours, including overtime hours, for each employee. 

When it comes to overtime pay or compensation, it is usually more than the original compensation that the employee gets. Here are the details of the overtime pay. 

Sick pay

Employees in Egypt are entitled to 180 days of payable sick leave through social security. 

• For the first 90 days, employees will get 75% of their salary.
• For the remaining 90 days, employees will get 85% of their salary. 

Maternity pay

A female worker in Egypt is entitled to 4 months of maternity leave. This includes the pre- and post-delivery period. The post-delivery leave should not be less than 45 days. 

Paternity pay

Paternity leave in Egypt is only for 1 day, which is paid. 

Severance pay

Employees in Egypt are entitled to severance pay. The pay varies depending on the kind of employment contract. 

• For termination of an indefinite employment contract: In such a termination case, the employer has to pay severance for 2 months for each year the employee was employed. 
• For termination of a definite employment contract: The employer has to compensate the employee for the remaining tenure of the employment contract. 

Payroll in Egypt: Contributions and deductions

Effective payroll management in Egypt requires calculating mandatory deductions and contributions with precision. Both employers and employees have to contribute to the public health insurance and the social security system in Egypt. It is important to understand what is deducted and who bears the costs to ensure accurate Egypt payroll processing. 

You can also use a cost calculator to calculate the deductions and contributions accurately. 

Income tax

The individual income tax in Egypt ranges from 0% to 25%. 

Social security contributions in Egypt

Social security contributions in Egypt are mandatory for both employees and employers. The social security system provides a host of benefits, including health care, pensions, disability benefits, and other social assistance programs. 

Other employee benefits

Though employees have to pay 0% to 25% salary tax in Egypt, they are entitled to certain benefits during their employment. Some important ones are as follows:

Public health insurance

Apart from military personnel, public health insurance is mandatory for all Egyptian citizens. 

The premium for the health insurance is paid by the employer, employee, and family members. The amount of the premium for the insurance varies depending on the income of the employee or their family. 

Earned or annual leave

Employees in Egypt are entitled to earned/annual leave per year. The number of days of leave depends on the employee’s employment duration. Here are the details:

Annual bonus

There is no legal mandate or requirement for an annual bonus in Egypt. However, in the majority of organizations, the 13th-month payment is a custom. 

Holiday or vacation bonus

Holiday bonuses, such as seasonal cash bonuses or Eid gifts, are not mandated by any law in Egypt. However, both public and private sector organizations practice the concept as a part of employee goodwill. 

Egypt payroll compliance best practices

All employers must ensure payroll compliance in Egypt. Non-compliance not only creates legal risks and complications for the employer, but it also damages the organization’s reputation. 

To maintain compliance with Egyptian payroll regulations, employers must focus on legal updates, timely filings, and accurate record-keeping. For smooth payroll processing in Egypt, employers must follow these compliance best practices:

• Employers must register their business and all employees with the Egyptian Tax Authority and the National Organization for Social Insurance (NOSI) before processing the first payroll. 
• Employers must withhold and remit employee income tax in Egypt on time. Late payments attract penalties under Egyptian tax law. Employer taxes in Egypt should also be calculated immaculately. 
• It is important to remain updated with annual changes to social insurance contribution ceilings. 
• There should be detailed payroll records for every employee, including salary breakdowns, deductions, and payment history. 
• You cannot overlook the importance of the payslip requirements in Egypt. The payslips should be compliant, clearly reflecting gross pay, deductions, and net salary. 
• The employment contracts must align with the compensation structure declared to the authorities. 
• Conduct periodic internal payroll audits for errors before they become significant compliance issues. 

Your options for payroll services in Egypt

You can choose from the various payroll options to optimize employment costs in Egypt. Here are some options that help you manage employees and run payroll in Egypt. 

1. Setting up a local entity in the country: If you intend to establish a legal business presence in Egypt, you can set up a local entity in the country. These options help you manage payroll effectively in Egypt. However, it’s time-consuming and expensive.
2. Hiring independent contractors: To accomplish a particular task or project in Egypt, you can easily hire independent contractors. Refrain from making misclassification mistakes as these might lead to legal issues. 
3. An EOR partner: One of the best options for seamless Egypt payroll is seeking assistance from an EOR service such as Payoneer Workforce Management. These services assist with key employment aspects, including payroll compliance in Egypt. 

Payoneer Workforce Management not only helps pay employees in Egypt and maintains Egypt payroll, but also offers support with taxation, leave entitlements, employee onboarding and termination, and more. 

Book a demo today!

Frequently asked questions (FAQs)