Egypt runs a source-based income tax system with mandatory social insurance, a corporate tax on profits, and withholding obligations for cross-border payments. For foreign companies hiring here, the piece that requires the most attention upfront is social insurance registration through NOSI. Get that right, and much of the rest follows a predictable rhythm.
This guide covers every employer tax obligation in Egypt: income tax withholding brackets, social insurance rates and salary ceilings, corporate tax and VAT, withholding tax on non-resident payments, and the filing deadlines that drive the compliance calendar.
Does egypt have income tax on salaries
Egypt does tax employment income. Personal income tax applies to salaries, wages, and other employment benefits paid to both resident and non-resident employees for work performed in Egypt. That means employers carry a real monthly obligation: calculate the correct withholding, deduct it from employee pay, and remit it to the Egyptian Tax Authority (ETA) on schedule.
The good news for employees is that a personal exemption of EGP 20,000 per year reduces the taxable base before the bracket rates apply. Certain income types are also exempt entirely, including pensions, end-of-service gratuities, and specific government allowances. Employers need to account for these correctly when running payroll.
Employer income tax withholding obligations
Egypt uses a pay-as-you-earn model for employment income. The employer withholds income tax each month from the employee’s salary and remits it to the ETA. Employees with only employment income don’t need to file a personal income tax return since the employer handles the tax at source.
The annual return reconciling all employee withholding is due by March 31 each year.
How the tax brackets work
Taxable income is calculated after subtracting the EGP 20,000 annual personal exemption. The brackets then apply to the remaining net taxable income.
| Net Taxable Income (EGP/year) | Tax Rate |
|---|---|
| Up to 40,000 | 0% |
| 40,001 – 55,000 | 10% |
| 55,001 – 70,000 | 15% |
| 70,001 – 200,000 | 20% |
| 200,001 – 400,000 | 22.5% |
| 400,001 – 600,000 | 25% |
| Above 1,200,000 | Up to 27.5% |
Note that the highest slab (above EGP 1,200,000) applies a tiered high-earner system that can reach 27.5%. For senior hires on large compensation packages, run the full calculation rather than applying a flat rate.
What income is exempt from withholding
Not everything that flows to an employee triggers income tax. The following categories are exempt:
- Pension payments
- End-of-service gratuities
- Certain government-mandated allowances
When structuring compensation packages, understanding which components are exempt can affect both gross-up calculations and total employer cost. That said, structuring packages primarily around exempt components to avoid withholding invites scrutiny from the ETA.
Social insurance contributions under nosi
The National Organisation for Social Insurance (NOSI) is Egypt’s mandatory social insurance body. Both employers and employees contribute monthly, calculated as a percentage of the employee’s insured salary. Coverage is broad: it includes pension, disability, death, health, work injury, unemployment, and end-of-service benefits.
The insured salary isn’t the same as the actual salary. NOSI sets a minimum and maximum ceiling, and contributions are calculated within that range regardless of what the employee earns.
Contribution rates
| Contribution | Rate | Applied To |
|---|---|---|
| Employer contribution | 18.75% | Insured salary |
| Employee contribution | 11% | Insured salary |
| Combined | 29.75% | Insured salary |
Insured salary ceilings for 2026
| Monthly Amount (EGP) | |
|---|---|
| Minimum insured salary | 2,700 |
| Maximum insured salary | 16,700 |
These ceilings increase by 15% every January 1, and that schedule runs through 2027. Plan your payroll cost model accordingly. An employee earning EGP 30,000/month has NOSI contributions calculated on EGP 16,700, not EGP 30,000.
Special rule for managers and directors
If an individual is listed as a manager or director on the company’s commercial register, a different calculation applies. The NOSI contribution for these named individuals is a flat 21% of the maximum insured salary ceiling.
For 2026, that means: 21% × EGP 16,700 = EGP 3,507 per month per named director or manager. This flat-rate rule applies regardless of their actual salary.
Employee registration requirement
Every employee must be registered with NOSI within 15 days of their start date. Missing this window creates both legal exposure and potential complications in the event of a work injury or claim before registration is complete. Build the NOSI registration step into your onboarding checklist.
Corporate income tax in egypt
Egyptian entities pay corporate income tax at a standard rate of 22.5% on net taxable profit. This rate applies after allowable deductions and has been stable in recent years. Foreign companies don’t pay Egyptian corporate income tax unless they have a registered entity or a permanent establishment here.
Filing and advance payments
Corporate tax returns are due within 120 days of the end of the company’s fiscal year. For companies on a December 31 fiscal year, that puts the deadline at the end of April.
Egypt requires advance (quarterly) tax payments throughout the year based on estimated profits. These instalments reduce the final liability due at filing but require reasonable profit forecasting to size correctly. Underpaying advance instalments can result in interest charges on the shortfall.
Vat obligations for employers
Egypt’s standard VAT rate is 14%, and it applies to most goods and services. For employers, the main touchpoint is whether your Egyptian entity crosses the registration threshold: businesses with annual taxable turnover above EGP 500,000 must register with the ETA for VAT purposes.
VAT doesn’t directly affect payroll calculations, but it does affect:
- Service contracts with Egyptian vendors (you’ll receive VAT-inclusive invoices)
- Any taxable benefits-in-kind provided to employees
- Contractor invoices from Egyptian-registered suppliers
If your entity is VAT-registered, you’ll file periodic VAT returns and either remit net VAT collected or claim refunds on input VAT where applicable.
Withholding tax on payments to non-residents
When an Egyptian company or permanent establishment makes certain payments to non-resident entities, it must withhold tax at source and remit it to the ETA. This obligation sits with the Egyptian paying entity.
Key withholding tax rates
| Payment Type | WHT Rate |
|---|---|
| Services, technical fees, royalties | 20% |
| Dividends | 10%; 5% if shares are listed |
The 20% rate on services is notable. If your Egyptian entity is paying a foreign parent or affiliate for management services, software licensing, or technical support, you’re looking at a significant withholding cost unless a tax treaty reduces it.
Double taxation treaties
Egypt has signed double taxation agreements with more than 50 countries. These treaties can reduce or eliminate the standard withholding rates. Common treaty partners include the UK, France, Germany, the UAE, and a number of other countries where foreign employers may be headquartered.
To claim treaty relief, the non-resident recipient typically needs to provide a certificate of tax residency from their home country. Don’t assume treaty rates apply automatically. Obtain the documentation before making payments at a reduced rate, and keep it on file in case of an ETA audit.
Filing deadlines and compliance calendar
Keeping track of obligations by deadline type saves a lot of headaches. Here’s a consolidated view of the key recurring deadlines for employers in Egypt.
| Obligation | Frequency | Deadline |
|---|---|---|
| Employee income tax withholding remittance | Monthly | During the following month (per ETA schedule) |
| NOSI social insurance contributions | Monthly | During the following month |
| Annual employer income tax return | Annual | March 31 |
| Corporate income tax return | Annual | Within 120 days of fiscal year end |
| Advance corporate tax payments | Quarterly | Throughout the fiscal year |
| VAT returns (if registered) | Periodic | Per ETA filing schedule |
| Withholding tax on non-resident payments | Per payment | Remitted to ETA after deduction |
Missing the March 31 annual return deadline or falling behind on monthly remittances to the ETA triggers penalties and interest. The ETA has increased enforcement activity in recent years, so this is not a calendar you want to manage manually for long.
How to manage egypt employer tax obligations without a local entity
Hiring employees in Egypt without setting up a local entity puts you in a compliance grey zone. Egyptian law requires employees to be employed through a locally registered entity. Without one, you can’t legally run payroll, register with NOSI, or withhold and remit income tax correctly.
An Employer of Record (EOR) solves this problem. The EOR is the legal employer in Egypt, so the employment contract, payroll processing, NOSI registration, income tax withholding, and compliance filings all sit with the EOR. You retain full control of the employee’s day-to-day work and responsibilities.
This approach is also faster than entity setup, which in Egypt typically involves multiple government registrations and can take several months. An Employer of Record can have a hire active and compliant within days, not months.
For companies already running a local entity, EOR services can still make sense for specific hires where you want to avoid adding headcount to your registered entity or for roles in regions where your entity doesn’t have an active payroll setup.
Manage egypt employer tax obligations with RemotePass
RemotePass operates as an Employer of Record in Egypt, handling social insurance registration with NOSI, monthly income tax withholding, NOSI contribution calculations, and payroll compliance through a single platform. The RemotePass platform gives you visibility into every hire’s cost breakdown and compliance status without requiring in-house Egyptian tax expertise. Book a RemotePass demo to see how it works.
FAQs about employer taxes in egypt
What is the total employer cost of hiring in egypt, including social insurance?
The main employer cost beyond gross salary is the NOSI employer contribution at 18.75% of the insured salary. For 2026, the insured salary ceiling is EGP 16,700/month, so the maximum NOSI employer contribution is EGP 3,131.25/month per employee. Employees earning more than the ceiling don’t increase your NOSI cost, but the ceiling increases 15% each January 1 through 2027.
Do employers need to withhold income tax even for low-earning employees?
The 0% tax band covers net taxable income up to EGP 40,000/year (after the EGP 20,000 personal exemption). An employee with total taxable income below EGP 60,000/year will effectively pay no income tax or a very small amount. You still need to run the calculation and document it, but the remittance may be zero.
What happens if we miss the monthly nosi contribution deadline?
Late NOSI contributions result in financial penalties and can create problems with employee coverage. More practically, it can affect your company’s standing with government authorities, which matters when renewing commercial registrations or processing employee documents.
Can a foreign company hire employees in egypt without registering a local entity?
Not legally. Egyptian employment law requires workers to be employed through an Egyptian-registered entity. The compliant alternative is using an Employer of Record, which employs the worker in Egypt on your behalf while you direct their work.
Are egyptian employees required to file their own income tax returns?
Employees whose only income is employment income don’t need to file personal income tax returns. The employer withholds tax at source and handles the annual reconciliation return by March 31. Employees with additional income sources outside of employment may have separate filing obligations.
How does withholding tax on services affect payments to a foreign parent company?
If your Egyptian entity pays a foreign affiliate for management fees, consulting, or technical services, a 20% withholding tax applies unless a tax treaty reduces the rate. This is a real cost and needs to be factored into intercompany pricing. Always check whether a treaty applies and obtain the required tax residency documentation before paying at a reduced rate.
Is there any zakat obligation for companies operating in egypt?
No. Zakat is a GCC obligation and does not apply in Egypt. Egyptian companies are subject to corporate income tax at 22.5%, not Zakat. This is a common point of confusion for companies that also operate in Saudi Arabia or other Gulf states.
