How Egyptian monthly payroll is calculated in 2026
Egypt is the exception in a Gulf group. Every GCC state runs payroll without personal income tax, so a head office in Dubai or Riyadh adding an Egyptian entity meets a progressive salary tax for the first time, computed on the year rather than the month, alongside a social insurance scheme with its own capped wage base.
- Work out the social insurance salary. It is the monthly wage held between the year's floor and ceiling, which PwC gives as EGP 2,700 and EGP 16,700 for 2026 and EGP 3,200 and EGP 19,300 for 2027.
- Deduct 11% of that figure as the employee contribution, and add 18.75% as the employer contribution, under Social Insurance Law 148 of 2019.
- Annualise: annual gross less annual employee social insurance less the EGP 20,000 personal allowance available from 21 February 2024 gives annual net taxable income.
- Apply the band schedule to that figure, after checking whether the bracket exclusion ladder withdraws any of the lower bands.
- Divide the annual tax by twelve for the monthly deduction, then take social insurance and tax off the gross to reach net pay.
The insurance wage floor and ceiling
Social insurance is not charged on gross pay. It is charged on an insurance salary that cannot fall below the floor or rise above the ceiling, so a salary of EGP 40,000 a month and a salary of EGP 17,000 a month produce exactly the same contribution in 2026: 11% of EGP 16,700, which is EGP 1,837. That is why the deduction looks regressive at the top of the payroll and why the employer contribution flattens out at EGP 3,131.25 a month.
The limits are not static. PwC states that the minimum and maximum limits are increased by 15% on 1 January of each year for a period of seven years, starting from 1 January 2021, which is where the 2027 figures of EGP 3,200 and EGP 19,300 come from. A payroll system that hard codes the 2026 ceiling will under deduct from the first January run.
Egypt salary tax, the personal exemption and the bands
Salary tax is annual. Employee social insurance is deductible, and both residents and non-residents are entitled to an annual salary tax exemption of EGP 20,000, so the base is annual gross less those two amounts. The schedule PwC publishes on annual income runs as follows.
| Annual net taxable income (EGP) | Rate |
|---|---|
| 0 to 40,000 | 0% |
| 40,000 to 55,000 | 10% |
| 55,000 to 70,000 | 15% |
| 70,000 to 200,000 | 20% |
| 200,000 to 400,000 | 22.5% |
| 400,000 to 1,200,000 | 25% |
| Above 1,200,000 | 27.5% |
The bracket exclusion ladder
Egypt does not leave the lower bands in place for everyone. As total annual net taxable income rises, the bands below a threshold are withdrawn, and the income that would have sat in them is taxed from the first pound at the lowest surviving rate. Tawzef states both ends of the ladder: above EGP 600,000 annual net income the 0% bracket disappears, and once income exceeds EGP 1,200,000 the entire first 1,200,000 is taxed at 25% with the excess at 27.5%.
The two sources do not agree on where the ladder starts. PwC states that the first EGP 40,000 in the first tax bracket is subject to 0% tax, which applies only to resident individuals with annual income that does not exceed EGP 1,200,000, which would leave the 0% band in place all the way up to EGP 1,200,000 rather than withdrawing it at EGP 600,000. The calculator follows the Tawzef reading, which is the less favourable of the two and therefore does not understate the tax. On an annual net taxable income between the two thresholds the difference is several thousand pounds a year, so settle the point with an Egyptian adviser before budgeting on it.
The calculator applies the same one band per EGP 100,000 pattern in between: the 10% band is withdrawn above EGP 700,000, the 15% band above EGP 800,000 and the 20% band above EGP 900,000, so that 22.5% runs from the first pound between EGP 900,000 and EGP 1,200,000. Those three intermediate steps could not be confirmed against a public source on 5 September 2026, and the calculator says so on screen whenever it applies one. Between the two points, treat any result above EGP 600,000 of annual net taxable income as indicative and confirm it with an Egyptian adviser or the Egyptian Tax Authority.
Two consequences matter when budgeting a senior hire. Each step is a cliff rather than a taper, so one extra pound of net taxable income can add several thousand pounds of annual tax. And both sources describe the thresholds as annual net income without spelling out whether the EGP 20,000 personal exemption comes off first, so the calculator tests them against the same net taxable figure it taxes, after social insurance and after the exemption. That places a gross package a little further from a threshold than a gross figure would suggest.
Worked example: EGP 20,000 a month in 2026
Press "Load the worked example" in the calculator to see the same lines live.
| Line | Working | EGP |
|---|---|---|
| Monthly gross | As entered | 20,000.00 |
| Insurance wage | Capped at the 2026 ceiling of 16,700 | 16,700.00 |
| Employee social insurance | 11% x 16,700 | less 1,837.00 |
| Annual gross | 20,000 x 12 | 240,000.00 |
| Annual employee social insurance | 1,837 x 12 | less 22,044.00 |
| Personal exemption | Annual allowance against salary tax | less 20,000.00 |
| Annual net taxable income | 240,000 less 22,044 less 20,000 | 197,956.00 |
| Band 1 | 40,000 at 0% | 0.00 |
| Band 2 | 15,000 at 10% | 1,500.00 |
| Band 3 | 15,000 at 15% | 2,250.00 |
| Band 4 | 127,956 at 20% | 25,591.20 |
| Annual salary tax | Every band applied, income is under 600,000 | 29,341.20 |
| Monthly salary tax | 29,341.20 / 12 | less 2,445.10 |
| Monthly net pay | 20,000 less 1,837 less 2,445.10 | 15,717.90 |
| Employer social insurance | 18.75% x 16,700 | 3,131.25 |
| Total monthly employer cost | 20,000 plus 3,131.25 | 23,131.25 |
Tawzef publishes the same case and reaches a net of EGP 15,708, against the EGP 15,717.90 above. The gap is the Martyrs and Victims Fund contribution of 0.05% of gross, EGP 10 on this salary, which this calculator does not model; the remaining 10 piastres is rounding to the whole pound in the published figure. See the exclusions below.
Assumptions and exclusions
- The Martyrs and Victims Fund levy is not modelled. PwC records a contribution of 0.05% of gross salary under Law 4 of 2021, and Tawzef describes it as a small 0.05% of gross withheld from the employee. It is a separate withholding, it is not deductible against salary tax, and it is left out here so that every figure the tool returns is a social insurance or salary tax figure. Net pay shown is therefore about 0.05% of gross higher than the amount that reaches the bank account.
- Twelve equal months are assumed. Bonuses, commission, arrears and mid year changes shift the annual base and therefore the monthly tax, and Egyptian payroll settles the year rather than each month in isolation.
- The three intermediate steps of the bracket exclusion ladder, at EGP 700,000, EGP 800,000 and EGP 900,000, are applied on the same pattern as the two published ends but were not confirmed against a public source on 5 September 2026.
- The start of the ladder is disputed. Tawzef withdraws the 0% band above EGP 600,000 of annual net income and PwC keeps it in place up to EGP 1,200,000. The calculator follows Tawzef, which produces the higher tax, and the point is unresolved as at 5 September 2026.
- Whether the EGP 20,000 personal exemption is deducted before the ladder thresholds are tested is not stated by either source. The calculator tests them after the exemption.
- Resident employees with one employer. Multiple employments, non-resident treatment, foreign source income and the annual tax settlement are outside the tool.
- The flat 21% employer rate on the maximum insurance salary that PwC describes for managers and board members registered in the commercial register is not applied.
- Insurance is taken on the whole gross unless a separate registered basic is entered. Where an entity registers a lower basic wage, enter it in the second field.
- End of service, annual leave, overtime, medical insurance, stock awards and any employer paid benefits in kind are not calculated.
- Egyptian pounds only. Consolidating an Egyptian payroll into an AED or SAR group reporting currency needs a translation rate that this tool does not apply.
Running an Egyptian entity alongside a Gulf payroll
Three things usually catch a Gulf finance team out. Salary tax is a withholding obligation on the employer, not a personal filing the employee handles, so the payroll run has to compute it correctly every month. The insurance ceiling makes contribution cost flat above a certain salary, which changes how packages are compared against a GCC entity where GOSI in Saudi Arabia or gratuity accrual in the UAE behaves differently. And there is no Gulf style end of service lump sum to accrue: Mercans states that no general statutory severance pay provision applies in the same way as in some other jurisdictions, with the long term benefit coming through the social insurance pension instead. That guide is written against Labour Law 12 of 2003, so confirm the current labour law position with Egyptian counsel.
In Axion, the People box runs payroll per entity with the statutory rules of that country, and Finance keeps each entity in its own currency, so an Egyptian payroll in EGP sits alongside a UAE payroll in AED without a second system. Both boxes are Arabic and English, priced per box with unlimited users. Axion calculates and reports; it does not file with the Egyptian Tax Authority and it is not connected to any government portal.
Frequently asked questions
How is net salary calculated in Egypt in 2026?
Take the monthly gross, work out the social insurance salary by holding it between EGP 2,700 and EGP 16,700 a month for 2026, and deduct 11% of that figure as the employee contribution. Then annualise: annual gross less annual employee social insurance less the EGP 20,000 personal exemption gives annual net taxable income. Apply the band schedule to that figure, divide the annual tax by twelve, and deduct it from the gross along with the social insurance. A gross of EGP 20,000 a month gives social insurance of EGP 1,837 and salary tax of about EGP 2,445 a month.
What are the Egyptian social insurance rates and limits for 2026?
The employee pays 11% and the employer 18.75% of the social insurance salary under Law 148 of 2019. PwC gives the monthly minimum and maximum insurance salary as EGP 2,700 and EGP 16,700 for 2026, rising to EGP 3,200 and EGP 19,300 for 2027, and states that the limits increase by 15% on 1 January of each year for seven years starting from 1 January 2021. Pay above the ceiling is not insured, so the contribution stops rising once the ceiling is reached.
What are the Egyptian income tax brackets?
On annual income the schedule is 0% up to EGP 40,000, 10% to 55,000, 15% to 70,000, 20% to 200,000, 22.5% to 400,000, 25% to 1,200,000 and 27.5% above that, per PwC. The bands apply to net taxable income, which is the annual salary after employee social insurance and the EGP 20,000 personal exemption, so an employee is not taxed from the first pound of gross pay.
What is the bracket exclusion rule and who does it hit?
As total annual net taxable income rises, the lower bands are withdrawn one by one, and the income that would have sat in a withdrawn band is taxed from the first pound at the lowest surviving rate. Tawzef states both ends of the ladder: above EGP 600,000 of annual net income the 0% band disappears, and once income exceeds EGP 1,200,000 the whole first 1,200,000 is taxed at 25% with the excess at 27.5%. It only affects senior salaries, and because each step is a cliff rather than a taper, one extra pound of income can cost several thousand pounds of tax.
Does Egypt have an end of service gratuity like the Gulf?
Not in the way a Gulf employer would recognise it. Mercans states that no general statutory severance pay provision applies in Egypt in the same way as in some other jurisdictions, though compensation may arise depending on how the contract ends, and the long term benefit for an insured employee is the social insurance pension rather than a lump sum. That guide is written against Labour Law 12 of 2003, so confirm the current labour law position with Egyptian counsel before budgeting for it. This calculator does not model end of service, leave or overtime.
What does an Egyptian employee cost the employer in total?
Monthly gross plus 18.75% of the insurance salary. Because the insurance salary is capped, the employer contribution stops at EGP 3,131.25 a month in 2026, so on a gross of EGP 20,000 the total monthly cost is EGP 23,131.25. PwC notes a different treatment for managers and board members registered in the commercial register, where the employer pays a flat 21% on the maximum insurance salary; that case is not modelled here.
Related tools and guides
- GOSI calculator, for Saudi social insurance, the closest GCC equivalent of the Egyptian scheme.
- UAE gratuity calculator, for the end of service benefit Egypt does not have.
- GCC payroll compliance in 2026: WPS, GOSI and gratuity, the payroll rules on the Gulf side of the group.
- Bilingual Arabic and English, multi currency ERP for the GCC, on running EGP, AED and SAR entities in one system.
- Axion features, pricing, the Axion FAQ and all Axion tools.
Sources
All sources checked on 5 September 2026.
- PwC Worldwide Tax Summaries, Egypt individual, Taxes on personal income (band schedule to 27.5% and the EGP 20,000 annual salary tax exemption, last reviewed 4 February 2026)
- PwC Worldwide Tax Summaries, Egypt individual, Deductions (social insurance contributions deductible; EGP 20,000 personal allowance from 21 February 2024; the 0% band described as applying to resident individuals with annual income up to EGP 1,200,000, which is the point on which PwC and Tawzef differ)
- PwC Worldwide Tax Summaries, Egypt individual, Other taxes (employee 11%, employer 18.75%, monthly insurance salary limits of 2,700 and 16,700 for 2026 and 3,200 and 19,300 for 2027, the 15% increase each 1 January for seven years from 2021, the flat 21% employer rate for registered managers, and the Martyrs and Victims Fund at 0.05% of gross under Law 4 of 2021)
- Tawzef, Egypt salary calculator 2026, gross to net questions answered (the bracket exclusion ladder and the EGP 20,000 a month worked example)
- Tawzef, Why 2026 is a turning point for social insurance in Egypt (Social Insurance Law 148 of 2019, employee 11% and employer 18.75%, 2026 limits of EGP 2,700 and EGP 16,700 a month)
- Tawzef, Payroll tax in Egypt, the complete guide for employers (the Martyrs and Victims Fund withheld at 0.05% of gross)
- Mercans, Egypt employer of record and payroll guide (no general statutory severance pay provision applies in the same way as in some other jurisdictions; the guide is written against Labour Law 12 of 2003)
This calculator gives an estimate based on the published 2026 social insurance limits and the current salary tax schedule. It is not tax or legal advice and it is not a government tool. The Martyrs and Victims Fund contribution is not modelled, the start and the intermediate steps of the bracket exclusion ladder are not settled between the published sources, and Egyptian payroll settles across the year rather than month by month. Check the final figures with your payroll provider, an Egyptian tax adviser or the Egyptian Tax Authority before relying on them.