A. Update
Egypt’s Ministry of Finance has released the Income Tax Law No. 7 of 2024 (‘the Law’) amending the already existing Law No. 91 of 2005 pertaining to income tax. The significant tax-centric provisions of the Law impacting payroll are as follows:
1) Revised Income Tax Rates
The new regulation has increased the lower tax brackets for the tax year 2024 as under:
| Annual Net Taxable Income (EGP) -Effective November 01,2023 | ||||||
|---|---|---|---|---|---|---|
| Tax rate (%) | Not exceeding 600,000 | Between 600,000 and 700,000 | Between 700,000 and 800,000 | Between 800,000 and 900,000 | Between 900,000 and 1,200,000 | Exceeding 1,200,000 |
| 0% | up to 40,000 | - | - | - | - | - |
| 10% | >40,000 to 55,000 | up to 55,000 | - | - | - | - |
| 15% | >55,000 to 70,000 | >55,000 to 70,000 | up to 70,000 | - | - | - |
| 20% | >70,000 to 200,000 | >70,000 to 200,000 | >70,000 to 200,000 | up to 200,000 | - | - |
| 22.5% | >200,000 to 400,000 | >200,000 to 400,000 | >200,000 to 400,000 | >200,000 to 400,000 | up to 400,000 | - |
| 25% | exceeding 400,000 | exceeding 400,000 | exceeding 400,000 | exceeding 400,000 | exceeding 400,000 | up to 1,200,000 |
| 27.5% | Exceeding 1,200,000 | |||||
Existing tax rates are as under:
| Annual Net Taxable Income (EGP) -Effective November 01,2023 | ||||||
|---|---|---|---|---|---|---|
| Tax rate (%) | Not exceeding 600,000 | Between 600,000 and 700,000 | Between 700,000 and 800,000 | Between 800,000 and 900,000 | Between 900,000 and 1,200,000 | Exceeding 1,200,000 |
| 0% | up to 30,000 | - | - | - | - | - |
| 10% | >30,000 to 45,000 | up to 45,000 | - | - | - | - |
| 15% | >45,000 to 60,000 | >45,000 to 60,000 | up to 60,000 | - | - | - |
| 20% | >60,000 to 200,000 | >60,000 to 200,000 | >60,000 to 200,000 | up to 200,000 | - | - |
| 22.5% | >200,000 to 400,000 | >200,000 to 400,000 | >200,000 to 400,000 | >200,000 to 400,000 | up to 400,000 | - |
| 25% | exceeding 400,000 | exceeding 400,000 | exceeding 400,000 | exceeding 400,000 | exceeding 400,000 | up to 1,200,000 |
| 27.5% | Exceeding 1,200,000 | |||||
2) Increase in Personal Exemption
The annual personal exemption for the individual and disabled individual taxpayer has increased as under:
| Taxpayer category | Year 2024 (in EGP) | Year 2023 (in EGP) |
|---|---|---|
| Other than disabled | 20,000 EGP | 15,000 EGP |
| Disabled | 30,000 EGP | 22,500 EGP |
B. Statutory Compliance Release Date: February 21, 2024
C. Effective Date: March 01, 2024
New Tax Law.pdf
A. Update
Egypt’s Ministry of Finance has gazetted Law No. 386 of 2023 to mandatorily register certain entities/companies under the latest electronic system (e-tax). This system is brought in by the Egyptian Tax Authority (ETA) to facilitate online monthly reporting with automatic wage and salary Tax calculation. The implementation of the digitalized tax system for the tax year 2024 is carried out in phases as under:
| Phases | Companies covered | Effective From |
|---|---|---|
| Phase 4 (sub phase 1) | 500 (as decided by Authorities*) | October 15, 2023 |
| Phase 4 (sub phase 2) | 1000 (as decided by Authorities*) | December 15, 2023 |
| Phase 4 (sub phase 3) | Funded companies at the 1st large taxpayer centre * | February 15, 2024 |
| Phase 5 | Funded companies at the 2nd large taxpayer centre* | April 15, 2024 |
| Phase 6 | Funded companies at the rest of the tax centres and joint-stock and investment companies tax authorities in Cairo, Alexandria, and South Valley * | July 15, 2024 |
| Phase 7 | Funded companies at the tax authorities belonging to the fourth Cairo region and all integrated tax offices* | October 15, 2024 |
| Phase 8 | Funded companies at the rest of the Egyptian Tax Authority’s offices* | December 15, 2024 |
Note:
*Please refer to the companies’ list provided in Law No. 386 of 2023 given under Source below.
B. Statutory Compliance Release Date: September 03, 2023
C. Effective Date: September 03, 2023
A. Update
1) Increase in Social security contribution capping limit:
The Social Insurance and Pension Law no. 148 of 2019 mandates around 15% increase in minimum and maximum salary capping at the beginning of January every year. Accordingly, the minimum and maximum social security capping for the year 2024 will be as under:
| Social Security Cap | Year 2024(in EGP) | Year 2023 (in EGP) |
|---|---|---|
| Minimum cap | 2,000 | 1,700 |
| Maximum cap | 12,600 | 10,900 |
2) Increase in Emergency Fund limit:
The Egyptian labor law article no. 34 of 2003 mandates around 7% increase in minimum and maximum capping at the beginning of January every year. Accordingly, the minimum and maximum Emergency fund or the year 2024 will be as under:
| Emergency Fund Cap | Year 2024(in EGP) | Year 2023 (in EGP) |
|---|---|---|
| Minimum cap | 380 | 350 |
| Maximum cap | 2,370 | 2,210 |
B. Statutory Compliance Release Date: December 17, 2023
C. Effective Date: January 01, 2024
A. Update
Egypt’s Ministry of Finance has officially gazetted Law No. 175 of 2023 amending some provisions of the Income Tax Law promulgated by Law No. 91 of 2005 (‘the Law’) amending the individual Income tax rates provided in Article 8 of the Law as under:
| Annual Net Taxable Income (EGP) -Effective November 01,2023 | ||||||
|---|---|---|---|---|---|---|
| Tax rate (%) | Not exceeding 600,000 | Between 600,000 and 700,000 | Between 700,000 and 800,000 | Between 800,000 and 900,000 | Between 900,000 and 1,200,000 | Exceeding 1,200,000 |
| 0% | up to 30,000 | - | - | - | - | - |
| 10% | >30,000 to 45,000 | up to 45,000 | - | - | - | - |
| 15% | >45,000 to 60,000 | >45,000 to 60,000 | up to 60,000 | - | - | - |
| 20% | >60,000 to 200,000 | >60,000 to 200,000 | >60,000 to 200,000 | up to 200,000 | - | - |
| 22.5% | >200,000 to 400,000 | >200,000 to 400,000 | >200,000 to 400,000 | >200,000 to 400,000 | up to 400,000 | - |
| 25% | exceeding 400,000 | exceeding 400,000 | exceeding 400,000 | exceeding 400,000 | exceeding 400,000 | up to 1,200,000 |
| 27.5% | Exceeding 1,200,000 | |||||
| Annual Net Taxable Income (EGP) (Effective from July 01, 2023 to October 31, 2023) | ||||||
|---|---|---|---|---|---|---|
| Tax rate (%) | Not exceeding 600,000 | Between 600,000 and 700,000 | Between 700,000 and 800,000 | Between 800,000 and 900,000 | Between 900,000 and 1,200,000 | Exceeding 1,200,000 |
| 0% | up to 21,000 | - | - | - | - | - |
| 2.5% | >21,000 to 30,000 | up to 30,000 | - | - | - | - |
| 10% | >30,000 to 45,000 | >30,000 to 45,000 | up to 45,000 | - | - | - |
| 15% | >45,000 to 60,000 | >45,000 to 60,000 | >45,000 to 60,000 | up to 60,000 | - | - |
| 20% | >60,000 to 200,000 | >60,000 to 200,000 | >60,000 to 200,000 | >60,000 to 200,000 | up to 200,000 | - |
| 22.5% | >200,000 to 400,000 | >200,000 to 400,000 | >200,000 to 400,000 | >200,000 to 400,000 | >200,000 to 400,000 | - |
| 25% | exceeding 400,000 | exceeding 400,000 | exceeding 400,000 | exceeding 400,000 | exceeding 400,000 | up to 1,200,000 |
| 27.5% | Exceeding 1,200,000 | |||||
B. Statutory Compliance Release Date: November 02, 2023
C. Effective Date: November 01, 2023
A. Update
Egypt’s Ministry of Finance has published the Income Tax Law No. 30 of 2023 (‘the Law’). The salient tax-centric provisions of the Law impacting payroll are as follows:
1) Revision on Individual Income Tax Rates:
The Revised income tax rates are as follows:
| Annual Net Taxable Income (EGP) | ||||||
|---|---|---|---|---|---|---|
| Tax rate (%) | Not exceeding 600,000 | Between 600,000 and 700,000 | Between 700,000 and 800,000 | Between 800,000 and 900,000 | Between 900,000 and 1,200,000 | Exceeding 1,200,000 |
| 0% | up to 21,000 | - | - | - | - | - |
| 2.5% | 21,000 to 30,000 | up to 30,000 | - | - | - | - |
| 10% | 30,000 to 45,000 | 30,000 to 45,000 | up to 45,000 | - | - | - |
| 15% | 45,000 to 60,000 | 45,000 to 60,000 | 45,000 to 60,000 | up to 60,000 | - | - |
| 20% | 60,000 to 200,000 | 60,000 to 200,000 | 60,000 to 200,000 | 60,000 to 200,000 | up to 200,000 | - |
| 22.5% | 200,000 to 400,000 | 200,000 to 400,000 | 200,000 to 400,000 | 200,000 to 400,000 | 200,000 to 400,000 | |
| 25% | exceeding 400,000 | exceeding 400,000 | exceeding 400,000 | exceeding 400,000 | exceeding 400,000 | up to 1,200,000 |
| 27.5% | Exceeding 1,200,000 | |||||
2) Revision in Personal Exemption:
The annual personal exemption for the individual taxpayer has been increased from EGP 9,000 to EGP 15,000 and annual personal exemption for the disabled individual taxpayer has been increased from EGP 13,500 to EGP 22,500.
B. Statutory Compliance Release Date: June 15, 2023
C. Effective Date: July 1, 2023
A. Update
As per Social Insurance and Pension Law no. 148 of 2019 (‘the Law’), till December 2022, the employee’s contribution was 11% and employer’s contribution is 18.75% of the salary, as prescribed.
The Law further mandates for a 15% increase on minimum and maximum salary caps on which social security contribution is applicable, at the beginning of January every year, for a period of seven years, starting from January 01, 2021.
Accordingly, the minimum and maximum caps of total salary amount subject to social security for the year starting from January 01, 2023, are as under:
- Minimum cap: EGP 1,700
- Maximum cap: EGP 10,900
B. Statutory Compliance Release Date: August 23, 2019
C. Effective Date: January 1, 2023
A. Update
The Egyptian Prime Minister issued Decree no. 2437 of 2021 approving the executive regulations governing Social Insurance and Pension Law no. 148 of 2019 which states foreign nationals are liable to social security and the regime mandatorily applies to all local and foreign nationals. The Contribution rates and salary caps applicable to local employees are applicable to foreign nationals also. Employers need to register the foreign nationals with the social insurance authority to start contributing the social insurance.
B. Statutory Compliance Release Date: September 28, 2021
C. Effective Date: September 29, 2021
Executive Regultion.pdf
A. Update
On March 3, 2021, President Abdel Fattah Al-Sisi of Egypt, promulgated Law No. 4 of 2021 (the 2021 Law) amending some provisions of Law No. 16 of 2018, thereby establishing a fund honoring the martyrs, victims, missing, the injured of war and security operations and terror attacks and their families.
Article no. 8 of the 2021 Law states that a monthly contribution of 0.05% shall be deducted from the salaries of:
- The workers of public entities
- Public sectors authorities and companies
- Public business sector companies and the units of special nature and special funds affiliated to these entities
- The workers employed by the private entities
Further, the 0.05% of monthly deduction will not be applicable on per diem workers. Each entity shall disburse the salaries after withholding the above stated percentage and the government then shall collect and deliver it to the fund’s account.
B. Statutory Compliance Release Date: March 03, 2021
C. Effective Date: March 04, 2021
A. Update
As per Social Insurance and Pension Law no. 148 of 2019 (the Law),presently, the employee’s contribution percentage is 11% of the total social insurance salary and employer’s contribution is 10.75% of total social insurance salary. The Law further mandates for an 15% increase on minimum and maximum salary caps on which social security contribution is made, at the beginning of January of each year, for a period of seven years, starting from January 01, 2021. These two limits are to be increased by the rate of inflation as of January 01, 2028.
The minimum and maximum caps of total salary amount subject to social security for the years starting January 01, 2020 are as under:
- Minimum cap: EGP 1000
- Maximum cap: EGP 7000
For the year 2021, an increase in the minimum and maximum caps of the total salary amount subject to social security are as follows:
- Minimum cap: EGP 1200
- Maximum cap: EGP 8100
B. Statutory Compliance Release Date: August 23, 2019
C. Effective Date: January 01, 2021
A. Update
To offset some of the negative effects of the COVID-19 pandemic on the economy, the President has approved a new legislation (Law no. 170 of 2020) referred as Solidarity contribution. This regulation requires employees and pensioners to pay to the tax authorities 1% and 0.5% of their net income, respectively.
This law will be applied for a temporary period of 12 months effective from August 2020. Employees and pensioners whose monthly net income is less than EGP 2,000 will be exempt from this contribution.
The executive regulations have not been released yet.
B. Statutory Compliance Release Date: August 13, 2020
C. Effective Date: August 01, 2020
A. Update
Law 26 for 2020 introduces new progressive tax rates as provided below for taxability of employment income and accordingly amends the method for individual income tax liability effective July 01, 2020. The applicable progressive tax rates will depend on the taxpayer's level of annual income.
| Tax rate (%) 0 |
Annual Net Taxable Income (EGP) | |||||
|---|---|---|---|---|---|---|
| not exceeding 600,000 | between 600,000 and 700,000 | between 700,000 and 800,000 | between 800,000 and 900,000 | between 900,000 and 1,000,000 | exceeding 1,000,000 | |
| up to 15,000 | - | - | - | - | - | |
| 2.5 | 15,000 to 30,000 | up to 30,000 | - | - | - | - |
| 10 | 30,000 to 45,000 | 30,000 to 45,000 | up to 45,000 | - | - | - |
| 15 | 45,000 to 60,000 | 45,000 to 60,000 | 45,000 to 60,000 | up to 60,000 | - | - |
| 20 | 60,000 to 200,000 | 60,000 to 200,000 | 60,000 to 200,000 | 60,000 to 200,000 | Upto 200,000 | - |
| 22.5 | 200,000 to 400,000 | 200,000 to 400,000 | 200,000 to 400,000 | 200,000 to 400,000 | 200,000 to 400,000 | Upto 400,000 |
| 25 | exceeding 400,000 | exceeding 400,000 | exceeding 400,000 | exceeding 400,000 | exceeding 400,000 | exceeding 400,000 |
Further, the annual personal exemption is increased from EGP 7,000 to EGP 9,000.
B. Statutory Compliance Release Date: May 12, 2020
C. Effective Date: July 01, 2020
A. Update
The Egypt Government has amended the below mentioned reports under New Social Insurance and Pension Act, 2020:
- Form 1 – New hire registration form
- Form 6 – Employee deregistration form
- Form 2 – Annual form including employees’ names, salaries and dates of birth and hiring dates
B. Statutory Compliance Release Date: N.A
C. Effective Date: January 01, 2020
A. Update
Further to a brief overview update in August 2019 on the Egypt’s Social Insurance and Pension Act, the General Social Insurance Authority recently issued instructions confirming the minimum and maximum salary caps applicable to contributions payable by employers and employees under the new Social Insurance and Pension Law.
The Act, which covers almost all categories of workers like temporary and seasonal, expatriates, provides for a contribution of 29.75% of an employee’s total salary (excluding certain exempt allowances), allocated as follows:
| Insurance type | Employer share (%) | Employee share (%) |
|---|---|---|
| Pension | 12 | 9 |
| End of service bonus | 1 | 1 |
| Work injuries | 1.5 | - |
| Medical | 3.25 | 1 |
| Unemployment | 1 | - |
| Total | 18.75 | 11 |
Note: Monthly pay: Salary paid excluding amount paid for conveyance, food, clothing, housing, living benefits and likes of rewards, incentives and bonus (Article 2). Exemptions cannot exceed 25% of the total salary
Benefits to be provided are categorically stated in the schedules to the Act. This depends on the salary and period of service. Similarly, benefits on account of disability depend on the percentage of disability and illness.
The instructions confirm that the initial minimum and maximum monthly salary caps are EGP 1,000 and EGP 7,000, respectively. Both caps will increase by 15% annually for the next seven years. The rate of increase for 2028 and subsequent years will be based on the actual inflation rate.
We are seeking further information on terminology used, reporting & registrations from Deloitte under this Act and shall update accordingly.
