Social insurance runs about 26% employer and 14% employee (figures can vary by wage band and scheme). That’s on top of salary — budget roughly 26% employer-side before income tax. Caps apply; contributions are calculated on a maximum wage ceiling. Get the exact rates from the Social Insurance Authority; they change periodically and differ for different categories of workers.

Payroll and tax

Income tax is progressive. Bands (subject to current law): first EGP 15,000 at 0%, next EGP 15,000 at 2.5%, next EGP 15,000 at 10%, next EGP 15,000 at 15%, next EGP 130,000 at 20%, next EGP 200,000 at 22.5%, and above EGP 400,000 at 25%. Personal allowance and other deductions apply. Withholding and remittance are the employer’s responsibility. Social insurance is remitted separately; keep filings current — back assessments are common.

Labour Law No. 12 of 2003

The Labour Law governs contracts, hours, leave, and termination. Written contracts are required. Maximum 8 hours per day, 48 per week; overtime is limited and paid at a premium. Annual leave: 21 days after one year. Maternity leave: 90 days (partly paid from social insurance). Probation is allowed (max 3 months).

Fixed-term contracts are permitted; if you renew repeatedly or the worker continues after the term without a new contract, the relationship can convert to indefinite. Indefinite contracts can be terminated by notice (typically 2 months for monthly paid) or payment in lieu. Dismissal for cause must be for a stated reason and follow due process; otherwise you risk reinstatement or compensation. Mass layoffs have additional consultation and notification requirements.

Statutory benefits

Social insurance covers pension, disability, and certain benefits; employer and employee contributions are mandatory. Health insurance is being expanded; confirm whether your sector or payroll size triggers mandatory enrolment. End-of-service gratuity applies: for indefinite contracts, typically ½ month’s pay per year for the first 5 years and 1 month per year thereafter, subject to the law and contract. Calculate and pay on termination.

EOR considerations

An EOR in Egypt must handle social insurance registration and remittance, income tax withholding, and Labour Law–compliant contracts. Arabic contracts are standard; ensure the EOR provides them and that fixed-term vs indefinite is clearly chosen and documented. Termination and gratuity calculations are contentious; the EOR should own the process and liability. Currency and banking are in EGP; confirm who bears FX risk if you fund in another currency.

Frequently Asked Questions

What does an employer pay for social insurance in Egypt? Roughly 26% employer contribution (rates and caps vary). Employee pays about 14%. Total employer add-on is about 26% before income tax.

Fixed-term or indefinite contract? Both are valid. Repeated renewal of fixed-term or continued work after the term can turn the relationship into indefinite, with stronger termination protections. Choose deliberately and document.

Is end-of-service gratuity mandatory? Yes for indefinite contracts. Typically ½ month per year for the first 5 years and 1 month per year after, subject to the law. The EOR should calculate and pay on exit.

Can we terminate without notice? Only for cause, and you must follow due process. Otherwise notice (e.g. 2 months) or payment in lieu is required.

Who handles labour disputes when using an EOR? The EOR is the employer of record and should handle disputes and liability. Confirm they have local legal support and that the contract allocates employment risk to them.