Arab Republic of Egypt

Egypt’s income tax structure is progressive and applies to both individuals and corporations. Residents are taxed on their worldwide income, while non-residents are taxed only on Egyptian-sourced income. Employers withhold tax on salaries and remit it to the Egyptian Tax Authority (ETA) under the Pay As You Earn (PAYE) system. Self-employed individuals must file returns independently. The system is administered by the ETA under the Income Tax Law, with mandatory electronic filing for most taxpayers.

Employment income is taxed using progressive brackets ranging from 0% to 27.5%. The current structure includes a tax-free threshold on lower-income bands, supported by a personal annual exemption of EGP 20,000, with subsequent bands incrementally at increasing rates.

Payroll taxes consist of personal income tax and mandatory social insurance contributions, both withheld by the employer. Income tax is applied progressively to all forms of employee compensation, including cash and in-kind benefits, with specific exemptions and deductions allowed. Employers and employees must also contribute to the national social insurance system administered by the National Organisation for Social Insurance (NOSI). Employees contribute 11% and employers contribute 18.75% of the employee’s insurable earnings. Payroll taxes are reported and paid monthly through Egypt’s electronic filing system. Social insurance contributions are subject to minimum and maximum monthly insurable salary thresholds, which are adjusted annually. In addition to core contributions, certain mandatory payroll levies may apply, including a small employee deduction for the Martyrs and Victims Fund (0.05% of gross salary), along with other employer-side statutory funds depending on company size and sector. Payroll taxes are reported and paid monthly through Egypt’s electronic filing systems. Employers must be registered with both the ETA and NOSI to ensure all employees are properly enrolled in social insurance schemes.

Employers must remit withheld income tax and social insurance contributions by the 15th of the following month together with a detailed report. Quarterly payroll tax returns are due one month after each quarter (in January, April, July and October), while an annual salary tax reconciliation must be filed by 1 January of the following year. Additionally, individual income tax returns are due by 31 March. Timely compliance is essential, as late submissions or payments can result in significant penalties under the Income Tax Law No. 91 of 2005. Egypt continues to expand its digital tax infrastructure, with most payroll reporting and filing now required to be completed electronically through official government platforms.

Employers and payroll providers are required to maintain detailed payroll records, including salary slips, tax withholdings, social insurance declarations, employment contracts, payment records and monthly and annual tax filings. These records must be accurate, up to date and retained for at least five years for audit and inspection purposes by the ETA and the NOSI. Proper documentation is essential to ensure compliance with payroll regulations and avoid penalties. Electronic record-keeping is permitted and encouraged, in line with Egypt’s ongoing transition to integrated digital tax and social insurance systems.