Egypt payroll and benefits guide
What global businesses need to know about payroll in Egypt
Egypt is one of the oldest countries in the world, and can trace its history back more than 7,000 years. It’s known for its Pyramids, the Sphinx, hieroglyphics and the mighty River Nile, but aside from this rich ancient heritage, it’s also a strong player within Africa and the Middle East.
Indeed, Egypt is currently Africa’s biggest economy by GDP, just ahead of South Africa and Nigeria. You may think that agriculture around the Nile Delta and tourism are major drivers of the Egyptian economy, but there’s much more to it: textiles, chemicals, energy and metals are also major exports, and more than 30% of Egypt’s exports go to the European Union.
Having undergone economic and political turbulence in the past, Egypt is currently undergoing a range of reforms aimed at encouraging more foreign investment, creating jobs and reducing issues around unemployment and poverty. These measures appear to be working: Egypt’s unemployment rate reached a record low of 6.4% in the last quarter of 2024, a strong indicator of a healthy economy that’s moving forwards.
It’s no surprise, therefore, that organizations all over the world are eyeing Egypt as a potential destination for a foreign expansion. This guide covers the key facts around employment legislation and running payroll in Egypt.
Getting started
Egypt has a number of ‘Free Zones’ where certain tax breaks and exemptions are made available for certain industries, and business rules and regulations are more relaxed. There are a number of activities that are restricted in these areas—so check this list closely to ensure that your operations will be eligible.
For normal business set-up in Egypt, many foreign businesses choose to set up as a limited liability company (LLC). The whole process should take around two to four weeks to complete, the costs involved are small, and there is no minimum share capital requirement.
You should apply to the General Authority for Investment and Free Zones (GAFI) to reserve a business name, and submit your drafted documents and incorporation papers. Once your application has been approved, you can then obtain industry-specific licenses and permits, and open an Egyptian business bank account. You’ll also need to register with the Egyptian tax and social security authorities.
Employment considerations in Egypt
Written contracts are a legal requirement in Egypt and must be written in Arabic. Fixed-term contracts can be provided, but if they are renewed so that they run for more than five years in total, they automatically become indefinite contracts.
Egypt’s standard working week is 40 hours, spread over five shifts of eight hours each. However, working hours and conditions are generally changed during Ramadan to accommodate employees’ fasting requirements—more remote working tends to be allowed where practical, and shifts are often reduced to six hours.
Overtime pay rates apply to any work over and above 48 hours per week. Employees should receive 135% of their normal rate, or 170% if working overtime at night. Any work on days where the employee wouldn’t normally work should be paid at 200% plus a day off in lieu.
Probation periods are legally required and can run for a maximum of three months. Notice periods only apply once the probation period has been completed, and are two months, increasing to three months after ten years’ service.
Compensation, bonuses and severance in Egypt
Egypt’s minimum wage rate has risen sharply in recent years. Having sat at EGP 2,700 per month as recently as 2023, the rate increased to EGP 7,000 per month (approx. £100; $140; €120) on March 1, 2025.
Payroll is most commonly run monthly, and there is no legal requirement to pay a 13th-month salary bonus. Common employee benefits include transport and accommodation allowances; flexible hours and remote working; extra paid maternity leave; paternity leave; and bonus structures including fixed gratuities as rewards for long service.
Severance pay is not legally required unless an employee’s termination is considered without cause, but can be provided as an option.
Tax and withholding considerations in Egypt
Egypt has a progressive income tax system, in which higher earnings are taxed at higher rates. The first EGP 40,000 earned per year is exempt (approx. £590; $790; €690), after which a rate of 10% kicks in. Further rates of 15%, 20%, 22.5% and 25% then apply as earnings increase, and the highest rate of 27.5% applies to all earnings over EGP 1.2 million per year (approx. £17,600; $23,600; €20,800).
The social security system in Egypt is unusual, in that there is a band of minimum and maximum annual wage that is subject to contributions. As of 2025, that band ranges from EGP 2,300 (approx. £34; $45; €40) to EGP 14,500 (approx. £215; $285; €250); out of earnings within that range, employees contribute 11%, while employers contribute 18.75%, rising to 21% for board members. Legislation introduced in 2021 means that the minimum and maximum will both increase by approximately 15% at the start of 2026, and again at the beginning of 2027. Separately, employers are required to pay 1% into the Emergency Relief Fund.
The VAT rate in Egypt is 14%, and the general corporation tax rate is 22.5%.
Holiday and leave considerations in Egypt
Employees in Egypt are entitled to paid time off on 13 days of public holidays each year. These holidays are a mix of secular, Coptic Christian and Muslim celebrations, and therefore are liable to move from year to year. They may also fall on different dates to those marked in other parts of the world—for example, Christmas is celebrated on January 7th. The government decides whether public holidays on weekends are moved to a weekday or lost on a case-by-case basis.
Paid leave entitlement is relatively generous at 21 days per year, increasing to 30 days for employees over 50 or who have at least ten years’ service. Unused days can be carried over into the following year.
Sick leave entitlement is covered by social security for medically certified illnesses, at 75% of normal pay for the first 90 days, rising to 85% for the next 90 days.
New legislation was passed in March 2025 that increased the entitlement of paid maternity leave from 90 days to 120. The first 45 days after childbirth are mandatory, and there is some flexibility in how the rest of the leave is taken either side. Mothers are entitled to full pay during the leave, with social security paying 75% and employers the other 25%. However, there is no current entitlement for paternity leave.
In Summary: Payroll in Egypt
There’s lots to love about doing business in Egypt, and its recent changes in payroll and employment requirements are bringing the country closer to developed Western economies in terms of working practices. Nevertheless, with around 90% of the population being Muslim, it will always be important to accommodate Islamic festivals such as Ramadan, and take cultural considerations into account. Working with a global payroll partner can help you with Egypt-specific expertise, and ensure your organization meets the expectations of the workforce and the country as a whole.
This article is for informational purposes only and not intended to convey or constitute legal or any other advice. It is not a substitute for advice from a qualified professional.
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