Employment rules · 10 min read · Updated October 2026
Salary tax in Egypt: the seven bands, the steps where they fall away and what the employer files
How salary tax works in Egypt: the bands and the personal exemption, where higher incomes lose the lower bands, what is taxed and what is not, and what the employer withholds, pays and files.
How is salary tax worked out in Egypt?
Salary tax is worked out on a year's pay, less the employee's social insurance and a personal exemption of EGP 20,000. The first EGP 40,000 is taxed at nothing, and the rate rises in bands to 25%. Once taxable income passes EGP 600,000, the lower bands fall away in steps. Income above EGP 1,200,000 is taxed at 27.5%. The employer withholds the tax each month and pays it by the 15th of the next.
Check whose pay salary tax covers
Salary tax reaches everything paid for work done for someone else, with a contract or without one, regular or not. The employer withholds it from each payment, except in the last case below.
| Who | How salary tax applies |
|---|---|
| An employee paid from Egypt | On all pay for their work, wherever the work is done |
| Someone paid from abroad for work done in Egypt | On that pay too |
| A foreign employee | The same tax treatment as an Egyptian national |
| A board member or manager of a company, paid for management work | On that pay, as salary |
| Someone who also works for a second employer | The second employer withholds 10% of what it pays, on account. It tells the main employer and the Tax Authority, and the main employer works out the tax on both |
| An employee whose employer is not resident in Egypt, or has no office or establishment there | The employee pays the tax to the Tax Authority themselves |
Pensions are not taxed as salary. Nor are end of service rewards, within the limits set out below.
Work out the year's tax band by band
Salary tax is worked out on a year's pay. The employee's own social insurance contributions come off first, and then a personal exemption of EGP 20,000. What is left is taxable income, which the law calls net income. It is rounded down to the nearest EGP 10.
| Taxable income for the year | Rate |
|---|---|
| Up to EGP 40,000 | 0% |
| From EGP 40,000 to EGP 55,000 | 10% |
| From EGP 55,000 to EGP 70,000 | 15% |
| From EGP 70,000 to EGP 200,000 | 20% |
| From EGP 200,000 to EGP 400,000 | 22.5% |
| Above EGP 400,000 | 25% |
Each rate applies only to the income inside its band. These bands apply in full while taxable income is no more than EGP 600,000. Above it, the next section applies.
With the exemption and the zero band together, up to EGP 60,000 a year of pay after social insurance carries no tax.
An employee with a disability, or one who cares for a person with a disability, has a personal exemption 50% higher: EGP 30,000. The integrated services card from the Ministry of Social Solidarity shows who qualifies.
Know where the lower bands fall away
Once a year's taxable income passes EGP 600,000, the zero band is lost. Each step after it takes away the next band. Above EGP 1,200,000, every band below 25% is gone, and income above it is taxed at 27.5%.
| Taxable income for the year | How the first part is taxed | What the step adds to the year's tax |
|---|---|---|
| Up to EGP 600,000 | Every band applies, from 0% on the first EGP 40,000 | No step yet |
| Over EGP 600,000, up to EGP 700,000 | 10% on the first EGP 55,000 | EGP 4,000 |
| Over EGP 700,000, up to EGP 800,000 | 15% on the first EGP 70,000 | EGP 2,750 |
| Over EGP 800,000, up to EGP 900,000 | 20% on the first EGP 200,000 | EGP 3,500 |
| Over EGP 900,000, up to EGP 1,200,000 | 22.5% on the first EGP 400,000 | EGP 5,000 |
| Over EGP 1,200,000 | 25% on the first EGP 1,200,000, and 27.5% on the rest | EGP 10,000 |
Above the first part, the income is taxed band by band as before.
Each step's cost applies in full as soon as taxable income passes it. At exactly EGP 600,000, the year's tax is EGP 124,750. At EGP 600,010, the next figure after rounding, it is EGP 128,752.50. So EGP 10 more taxable income adds EGP 4,002.50 of tax.
Measured from EGP 600,000, taxable income has to rise by more than EGP 5,333.33 before the employee is better off than at the step. Check where a raise or a bonus lands before it is agreed.
Know what is taxed and what is not
Salary tax reaches every kind of pay, whatever it is called. The exemptions are set one by one.
| Pay | How it is treated |
|---|---|
| Wages, bonuses, incentives, commissions, grants and overtime | Taxed |
| Allowances, transport included | Taxed, unless they repay a cost the employee actually bore for the work |
| A car, a phone, a loan on easy terms, life insurance the employer pays for, or shares given below market value | Taxed as benefits in kind, each valued as the Executive Regulation sets for it |
| Any other benefit that does not repay a cost the employee bore | Taxed at its market value, or at the difference where the employee pays part |
| Tax or social insurance the employer bears for the employee | Taxed, as a cash benefit |
| Shares in profits | Taxed, except a share in profits distributed to employees under the law |
| The employee's own social insurance contributions | Exempt, so they come off before tax |
| Meals for staff, transport laid on for them, health care, tools and work clothes, and housing provided for the work | Exempt, as group benefits in kind |
| Life and health insurance premiums for the employee, their spouse or their minor children, and premiums for a pension | Exempt up to 15% of net income or EGP 10,000 a year, whichever is less |
| Pensions | Not taxed |
| End of service rewards | Not taxed, where the reward is the one the employer's own rules set for leaving, or the Labour Law's where they set none |
Social insurance draws its own line, and it is not the line for tax. A transport allowance can be left out of the insurable wage and still be taxed.
A salary agreed net of tax is taxed on more than the agreed figure. The tax and social insurance the employer bears count as pay, and are taxed in turn.
Follow one salary past a step
Take a salary of EGP 65,000 a month, outside the governorates where universal health insurance is in force. It is above the EGP 16,700 cap on the insurable wage, so the employee's social insurance is EGP 1,837 a month.
| For the year | Amount |
|---|---|
| Pay | EGP 780,000 |
| Less the employee's social insurance | EGP 22,044 |
| Less the personal exemption | EGP 20,000 |
| Taxable income, before rounding | EGP 737,956 |
| Taxable income, rounded down to the nearest EGP 10 | EGP 737,950 |
Taxable income of EGP 737,950 is past the second step. So the first EGP 70,000 is taxed at 15%.
| For the year | |
|---|---|
| 15% on the first EGP 70,000 | EGP 10,500 |
| 20% from EGP 70,000 to EGP 200,000 | EGP 26,000 |
| 22.5% from EGP 200,000 to EGP 400,000 | EGP 45,000 |
| 25% on the EGP 337,950 above EGP 400,000 | EGP 84,487.50 |
| The year's tax | EGP 165,987.50 |
| Withheld each month | EGP 13,832.29 |
Net pay each month is EGP 49,330.71.
Had every band applied, the year's tax would be EGP 159,237.50. The two lost bands cost this employee EGP 6,750 a year.
File Form 4 each quarter and settle the year each January
| When | What the employer files or gives |
|---|---|
| In January, April, July and October | Form 4, the quarterly return, for the quarter before. It gives the number of employees and their details, the pay made in the three months, the tax withheld and paid with the receipts, and the changes in headcount |
| In January | The final settlement for the year before: each employee's pay for the year, less what the law deducts and exempts, and the tax due on it |
| On an employee's request | A statement of their name, the amount and type of their income, and the tax withheld |
Form 4 and the settlement go in through the same system. It fills the settlement from the year's monthly forms, for the employer to check and submit.
Where the settlement shows too little was withheld, the employer pays the difference. It keeps the right to recover it from the employee.
An employee whose only income is salary files no tax return of their own.
An employee who disputes the tax withheld objects to the employer within 30 days of receiving the pay. The employer sends the objection, with its reply, to the tax office within 30 days. If it does not, the employee can take it to the tax office directly.
Know what late or short withholding costs
| What goes wrong | What it costs |
|---|---|
| Tax withheld but paid late | A late payment charge from the day after the deadline, at the Central Bank's credit and discount rate on the first of January before, plus 2%. Part months are left out |
| Too little withheld | The employer pays the difference |
| Form 4 or the settlement late, by up to 60 days | A fine of EGP 3,000 to EGP 50,000, on top of the tax |
| Form 4 or the settlement not filed within 60 days of its deadline | A fine of EGP 50,000 to EGP 2,000,000 |
See what has changed, and what is scheduled
| When | What changes |
|---|---|
| 1 January 2024 | Tax a second employer withholds became tax on account, which the main employer settles |
| 1 March 2024 | The bands of Law No. 7 of 2024, and the personal exemption of EGP 20,000, apply to salaries |
| 15 December 2024 | Every employer works the tax out on the Tax Authority's payroll tax system |
| Each January | The floor and the cap on the insurable wage rise. Above the cap, more social insurance comes off pay before tax |
| 1 January 2027 | The employee's social insurance rises from 11% to 11.5% of the insurable wage. It comes off pay before tax, so taxable income falls by as much |
No change to the bands or the personal exemption had been scheduled by October 2026.
Run the tax from one record
A salary near a step needs the year's whole picture: the pay so far, social insurance on a cap that moves each January, the exemptions and what each benefit is worth. A payroll that holds them in different places can withhold one figure while the Tax Authority's system claims another.
On our payroll, salary tax is worked out on our own engine for Egypt on every run, from the same record as social insurance. Each quarter's Form 4 and the year's settlement are produced with the runs. You approve each month's outputs before anything is delivered.
Each change is in our engine before the run it affects. You are told what changed and what it does to your figures.
Your entity submits through the Tax Authority's system and pays the tax.
Common questions.
How much of a salary is free of tax in Egypt?
Can an employer pay an employee's salary tax for them?
Is a bonus taxed in Egypt?
Running payroll in the region? Book a Demo. Hiring without an entity? Get an EOR quote.
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