Egypt Income Tax and Payroll Deductions Explained: What Comes Off Your Salary

Last Updated: July 2026

If you receive a salary in Egypt, your take-home pay is usually lower than your gross pay because two major deductions apply: income tax and social insurance. In many payroll conversations, people also ask how bonuses, allowances, and 13th-month payments are treated, so I will break those down clearly and show you how to estimate net pay in EGP. See individual taxes on personal income for more details.

What comes off salary

In a standard payroll cycle, the main deductions from an employee’s salary in Egypt are the employee’s share of social insurance and personal income tax calculated on taxable earnings. According to the current rules summarized in professional tax references, the employee social insurance contribution is 11% of the insurable wage, while Egypt’s progressive personal income tax starts at 0% for the first EGP 40,000 of annual income and rises through higher brackets up to 27.5%.

A payroll calculator for Egypt is useful because many people think of salary deductions as a single line, but the payroll system separates the deductions by purpose. Social insurance is a statutory contribution tied to the social security system, while income tax is a separate charge under the income tax law.

Egypt income tax brackets

Egypt uses a progressive personal income tax system, which means each slice of income is taxed at its own rate rather than taxing the full salary at one rate. The current bracket structure reported in recent tax guidance is: 0% on the first EGP 40,000, 10% from EGP 40,001 to 55,000, 15% from EGP 55,001 to 70,000, 20% from EGP 70,001 to 200,000, 22.5% from EGP 200,001 to 400,000, 25% from EGP 400,001 to 1,200,000, and 27.5% above EGP 1,200,000.

These rates align with the 2024 amendments reported in official and professional summaries, which raised the tax-free annual band and adjusted the tax table for earned income. The change that matters most for payroll is that the first EGP 40,000 of annual taxable income is exempt, so lower earners pay no income tax on that initial slice.

Tax table

This table is a marginal system, so if your salary crosses a threshold, only the part above that threshold is taxed at the new rate. That is why a payroll tax calculator Egypt result can look lower than a quick flat-rate estimate.

Social insurance deduction

Social insurance is deducted separately from income tax in Egypt. For salaried workers, professional references on Egypt’s system report an employee contribution of 11% of the insurable wage and an employer contribution of 18.75%, with minimum and maximum contribution ceilings that are adjusted annually.

As of 1 January 2026, the reported minimum social insurance salary is EGP 2,700 and the maximum is EGP 16,700 per month. That ceiling matters because contributions are not taken indefinitely on high salaries; once the insurable wage reaches the ceiling, contributions stop increasing beyond that cap.

Social insurance split

In practical terms, if your monthly insurable wage is EGP 15,000, the employee contribution is 11% of that amount, or EGP 1,650. If your wage is above the ceiling, the contribution is calculated only up to the capped amount, not on the entire salary.

How payroll is calculated

The order of payroll deduction matters. First, the employer determines the employee’s insurable wage for social insurance. Then the employer calculates the employee’s social insurance deduction, and after that the income tax is computed on the taxable earned income under the applicable tax rules.

To see the structure, here is a simple example using EGP amounts. Suppose an employee earns EGP 30,000 gross monthly, and the monthly insurable wage is subject to the 2026 ceiling. The employee social insurance contribution would be capped according to the insurable wage ceiling, while annual income tax would be assessed on the employee’s taxable earnings after the relevant exemptions and permitted payroll treatment.

Simple take-home example

If the same employee receives a salary top-up later in the year, the calculation does not restart from zero each month in a casual way; payroll systems usually track cumulative taxable income across the year. That is why a proper Egypt tax calculator is more accurate when it handles annualisation, not just one isolated month.

Bonus and 13th-month pay

A 13th-month salary or year-end bonus is generally treated as employment income in payroll, so it is not ignored for tax purposes. The practical payroll effect is that it can increase the employee’s taxable annual income and therefore move part of the earnings into a higher tax band.

For example, if someone’s annual taxable salary is near EGP 400,000 and they receive an additional EGP 20,000 bonus, the bonus may push part of that income into the next marginal band. The key point is that bonus pay is usually not exempt simply because it is labeled “bonus”; payroll treatment follows the income tax rules applied to employment income.

What the law says

Egypt’s income tax rules are set under the Income Tax Law, as amended, and the brackets reported in 2024 updates show the current progressive structure for earned income. Professional tax summaries note that the first EGP 40,000 is taxed at 0%, with higher rates applying progressively after that threshold.

For social insurance, Egypt’s framework under Social Insurance Law No. 148 of 2019 and its executive arrangements provides the basis for employee and employer contributions. Professional summaries of the law and decree materials state that salaried workers contribute 11% from the employee side and 18.75% from the employer side, with contributions applied within legally defined wage ceilings.

Worked salary examples

Below are illustrative examples using the current bracket structure and social insurance framework. These are educational examples only, because actual payroll can vary depending on insurable wage classification, allowances, and company payroll rules.

If an employee earns EGP 180,000 annually, the first EGP 40,000 is exempt, then the next bands are taxed at 10%, 15%, and 20% up to that income level. The result is not a flat 20% tax on the full EGP 180,000, which is a common mistake in salary conversations.

FAQ

What are Egypt’s income tax brackets?

The current earned-income brackets reported in recent tax guidance are 0% up to EGP 40,000, then 10%, 15%, 20%, 22.5%, 25%, and 27.5% across higher income bands. The tax is progressive, so only the relevant slice of income is taxed at each rate.

Is social insurance deducted separately from income tax in Egypt?

Yes. Social insurance is a separate statutory deduction from income tax, and the employee contribution is commonly reported at 11% of the insurable wage, subject to legal minimum and maximum ceilings. Income tax is then computed separately under the progressive tax table.

How is a 13th-month or bonus taxed in Egypt?

A 13th-month payment or bonus is generally treated as employment income, so it is included in taxable salary calculations. In practice, it can raise your annual taxable income and move part of it into a higher bracket, depending on the total amount.

Conclusion

Egypt payroll deductions usually come down to two main items: social insurance and personal income tax, with bonuses and other salary additions added into the taxable picture when applicable. If you understand the bracket system and the 11% employee contribution, you can estimate take-home pay in EGP with far more accuracy than by looking at gross salary alone.

This article is for educational purposes only and does not constitute professional advice. Consult a qualified professional for your specific situation.