Egyptian Payroll Tax and Social Insurance Regulations (Law 7 of 2024)
Wage deductions in the Arab Republic of Egypt operate under a progressive statutory framework governed by Income Tax Law No. 91 of 2005, significantly overhauled by Law No. 7 of 2024 (effective March 1, 2024), alongside the Social Insurance and Pensions Law No. 148 of 2019.
The 2024 legislation increased the annual personal exemption for salaried personnel to 20,000 EGP, while widening the initial non-taxable tier (0% rate) to cover the first 40,000 EGP of annual net taxable income. Consequently, an employee with a net income up to 60,000 EGP per annum incurs zero wage tax liability.
| Tier | Annual Taxable Income Band (EGP) | Statutory Rate | Legal Basis |
|---|---|---|---|
| Tier 1 | 1 to 40,000 | 0% (Exempt) | Law 7 / 2024 |
| Tier 2 | 40,001 to 55,000 | 10% | Law 7 / 2024 |
| Tier 3 | 55,001 to 70,000 | 15% | Law 7 / 2024 |
| Tier 4 | 70,001 to 200,000 | 20% | Law 7 / 2024 |
| Tier 5 | 200,001 to 400,000 | 22.5% | Law 7 / 2024 |
| Tier 6 | 400,001 to 1,200,000 | 25% | Law 7 / 2024 |
| Tier 7 | Above 1,200,000 | 27.5% | Law 7 / 2024 |
Source: Egyptian Tax Authority (ETA) Circular regarding Law 7 of 2024 amending provisions of Law 91 of 2005. Income surpassing 600,000 EGP per year is subject to tier re-alignment under Article 8 bis, which gradually phases out entry tiers for high earners.
Social Insurance Deductions Under Law No. 148 of 2019
Egyptian social insurance covers old age, disability, death, and work-related injuries. The law establishes fixed statutory contribution percentages:
- Employee share: 11% deducted monthly from the contributory insurable wage.
- Employer share: 18.75% paid by the enterprise into the pension fund.
- Total mandatory contribution: 29.75% of the insurable wage base.
Insurable Wage Caps Set by NOSI:
Step-by-Step Payroll Calculation Methodology
Every month, payroll departments in Cairo and across Egypt process worker compensation following a strict statutory sequence:
- Determine Insurable Wage Base: Take the agreed base or full contract salary, bounded between the statutory minimum and maximum limits for the active year.
- Calculate Employee Social Insurance: Multiply the insurable wage by 11%.
- Deduct Insurance to reach Net Pre-Tax Income: Subtract the insurance contribution from total gross pay.
- Annualize the Income: Multiply monthly pre-tax income by 12 to establish the projected annual taxable compensation.
- Apply Personal Allowance: Subtract the statutory 20,000 EGP personal exemption (Law 7 / 2024).
- Slice into Progressive Tiers: Apply statutory tax percentages across each bracket band sequentially.
- Reconvert to Monthly Figure: Divide total calculated annual tax by 12 to derive the monthly income tax withheld.
- Apply Martyrs Fund: Multiply gross monthly pay by 0.05% (Law 4 / 2021).
- Compute Net Take-Home Pay: Gross pay minus (Insurance + Income Tax + Martyrs Fund).
Three Practical Salary Scenarios (Verified with Official Rates)
Scenario 1: Entry-Level Officer earning 6,000 EGP Monthly
Annual gross compensation equals 72,000 EGP. The insurable wage falls below the 2025 cap (6,000 EGP < 14,500 EGP).
660.00 EGP/mo
3.00 EGP/mo
28.33 EGP/mo
5,308.67 EGP/mo
Tax math: Annual pre-tax = 64,080 EGP. Minus 20,000 personal exemption = 44,080 EGP. First 40,000 at 0% = 0 EGP. Remaining 4,080 falls into Tier 2 (10%) = 408 EGP/year, which equates to 34.00 EGP per month.
Scenario 2: Mid-Level Professional earning 15,000 EGP Monthly
Annual gross compensation equals 180,000 EGP. The gross wage exceeds the 2025 NOSI statutory cap of 14,500 EGP.
1,595.00 EGP/mo
7.50 EGP/mo
844.38 EGP/mo
12,553.12 EGP/mo
Tax math: Annual taxable earnings after insurance and 20,000 personal exemption = 120,860 EGP. Tier 1 (40k @ 0%) = 0; Tier 2 (15k @ 10%) = 1,500; Tier 3 (15k @ 15%) = 2,250; Tier 4 (remaining 50,860 @ 20%) = 10,172 EGP. Total annual tax = 13,922 EGP / 12 = 1,160.17 EGP monthly.
Scenario 3: Senior Executive earning 40,000 EGP Monthly
Annual gross compensation equals 480,000 EGP. Insurance contribution hits the statutory ceiling (14,500 EGP in 2025).
1,595.00 EGP/mo
20.00 EGP/mo
6,206.58 EGP/mo
32,178.42 EGP/mo
Tax math spans tiers up to 22.5% bracket band. Total deductions aggregate to 7,821.58 EGP monthly, retaining roughly 80.4% as net take-home salary.
Statutory Notice and Reference Links
This digital calculator performs informational estimates derived from official statutes published by the Egyptian Tax Authority and National Social Insurance Authority. Company-specific deductions, private group healthcare policies, trade union dues, and quarterly performance bonuses may modify final take-home disbursements.