Employer of record in Egypt

Paid Leave Policies

Annual Vacation
Employees in Egypt who have completed at least six months of service are entitled to 21 days of paid annual leave each year. Employees who have been with the company for ten consecutive years or are aged 50 or older are eligible for 30 days of paid leave annually.

Sick Leave
Employees can take up to six months of paid sick leave, provided they submit a certified medical document verifying their illness. During the first 90 days of sick leave, employees receive 75% of their regular salary, which increases to 85% for the following 90 days.

Maternity Leave
Female employees who have worked for ten consecutive months are entitled to 90 days of paid maternity leave, including 45 days post-delivery. A female employee is eligible for maternity leave twice during her tenure. After returning to work, she is entitled to two 30-minute nursing breaks or a combined one-hour break for breastfeeding until the child reaches two years of age.

Paternity Leave
Currently, there are no statutory provisions for paternity leave in Egypt.

Family Leave
Employers with more than 50 employees must provide female workers with up to 24 months of unpaid leave per child. This leave can be taken twice during an employee’s career.

Public Holidays
Egypt recognizes 16 paid public holidays annually.

Additional Leave
Employees may be eligible for extra leave as specified in their employment contracts or collective agreements, subject to employer approval.
Employees can take up to six days of unpaid leave annually without providing a reason.
A maximum of two days of casual leave per year is permitted, which is deducted from the employee’s annual leave balance.

Statutory Employee Benefits

Unemployment Benefits
Employees who have contributed to social security for at least six months, including the three months immediately before unemployment, may qualify for benefits. Workers must not have resigned voluntarily, been dismissed for misconduct, or declined a reasonable job offer. They must also be actively seeking work and registered with the employment bureau. Benefits amount to 60% of the employee’s last insured salary for up to 16 weeks, or up to 28 weeks if they have contributed for at least 24 months.

Workers’ Compensation
Employers contribute the following percentages of monthly covered payroll to workers’ compensation insurance:

• Private sector: 3%
• Public sector: 2%
• Civil servants: 1%
  
  

The minimum and maximum wage limits for contributions are reviewed annually.

Social Security Contributions
Egyptian social security benefits cover the following:

• Retirement and pension plans
• Disability and life insurance
• Workplace accident insurance
• Health and sickness coverage
• Unemployment benefits
• Social assistance for retirees and the elderly
  
  

Contributions are categorized as fixed or variable based on income levels.

Retirement Benefits
Egypt’s pension system consists of contributory and non-contributory schemes.
Residents aged 65 and above who have made contributions qualify for the contributory pension system.
Contribution rates were reduced in 2013 to 30.5%, with employers covering 19.5% and employees 11%.
The non-contributory system provides financial support to Egyptian residents over 65 who do not receive other government pensions.

Healthcare Benefits
Egypt has both public and private healthcare systems. While the government provides universal healthcare, private medical services are available for those who prefer additional coverage.

Private Employee Benefits

• Workers’ Compensation: Private accident insurance is available.
• Retirement: Employees can opt for private pension schemes.
• Health Insurance: Private healthcare options provide high-quality medical services.
• Life Insurance: Private life insurance plans are accessible.

Personal Income Tax in Egypt

Tax Year
The tax year follows the calendar year, running from January 1 to December 31.

Income Tax Brackets

Taxation Method
Egypt follows a progressive tax system.

Double Taxation Agreements
Egypt has treaties with various countries to prevent double taxation.

Residency for Tax Purposes
A person is considered a tax resident if they:

• Have a permanent address in Egypt
• Spend over 183 days in the country within a 12-month period
• Work abroad but earn income from Egypt’s treasury

Payroll & Tax Withholding

• Salaries are subject to monthly payroll tax withholding, with payments due by the 5th of the following month.
• Employers submit quarterly tax statements in January, April, July, and October.
• An annual tax reconciliation must be filed by January 1 each year.

Investment Income Tax

• Capital gains tax applies to resident individuals at a rate of 10% for listed shares and at progressive rates for unlisted securities.
• Dividend payments are subject to a 10% withholding tax, or 5% if the company is listed on the Egyptian Exchange.

Payroll-Related Contributions

• Employees contribute 11% of their covered salary to social security.
• As of January 2023, the minimum and maximum contribution bases are EGP 1,700 and EGP 10,900, respectively.
• These limits will increase by 15% annually until 2028, after which they will be adjusted for inflation.

Administrative Requirements

Tax Filing & Compliance

• Employees must file personal tax returns by March 31 for the previous tax year.
• Employers must submit tax reports and reconcile payroll taxes annually.

Deductions & Allowances

• Life and health insurance premiums paid to registered insurers are deductible.
• Total allowable deductions cannot exceed 15% of net income or EGP 10,000.

This document outlines Egypt’s labor laws regarding paid leave, statutory benefits, and tax regulations to help employers and employees understand their entitlements and obligations.