Our guide to Payroll in Egypt

Doing Business in Egypt

Egypt, officially the Arab Republic of Egypt, boasts a history spanning over 5,000 years. As of 2026, its population is approximately 120 million, making it the most populous nation in the Middle East. The government continues to prioritize economic recovery and growth through several key initiatives:

• Mega Infrastructure Projects
• Tourism
• Economic Policy Enhancements
• Private Sector Investment
• GCC Investments

Basic Facts about Egypt

General Information:

Full Name: Arab Republic of Egypt

Capital: Cairo

Major Religion: Islam (predominantly) followed by Christianity (8% to 10%)

Official Language: Arabic

Local Currency: Egyptian Pound (EGP)

Number of Pay Periods: 12

Fiscal Year: January 1st – December 31st

Population: 100,880,160 (UN, 2019)

International Dialling Code: +20

Main Exports: Crude Petroleum, Petroleum Gas, Refined Petroleum, Gold, Nitrogenous Fertilizers

Internet Domain: .EG

Common Phrases

Hello: مرحباً (Marḥabān) / أهلاً (Ahlan)
Good Morning: صباح الخير (Ṣabāḥ el-khēr)
Good Evening: مساء الخير (Masā’ el-khēr)
Do you speak English?: هل تتكلم الإنجليزية؟ (Hal tatakallam al-inglīzīyah?)
Goodbye: مع السلامة (Maʿ al-salāmah)
Thank you: شكراً (Shukran)
See you later: أراك لاحقاً (Arāk lāḥiqan)

National Public Holidays 2026

There are multiple statutory holiday schedules within Lebanon. Below are the statutory national holidays in Egypt for 2026.

Please note that Islamic holidays are based on the lunar Hijri calendar, so the dates vary each year and are determined by the sighting of the moon. It's advisable to verify the specific dates as the year approaches.

Investing in Egypt

Egypt in 2026 presents a high-opportunity, high-complexity investment landscape. Supported by IMF programs, major capital inflows, currency reforms, and an improving macroeconomic environment, the country is becoming more attractive to foreign investors—though structural risks remain.

1. Macroeconomic Outlook (2026)

Strong GDP Growth Continuation

• Egypt’s economy is projected to grow +4.7% in 2026, accelerating to +4.8% in 2027 according to Allianz’s 2026 country risk report.
• Other major institutions (Fitch, BMI, World Bank) echo growth in the 4.2%–4.8% range for 2026.

Stabilisation after 2023/24 currency crisis

• The Egyptian pound strengthened 7.43% by end-2025, though still below its early-2024 value.
• A flexible exchange rate—part of the IMF program—supports investment flows.

Inflation Moderation

• Inflation fell from ~14% in 2025 to a projected 10.5% in 2026.
• Easing inflation supports consumption and foreign investor confidence.

2. Foreign Investment Trends

Record FDI Inflows

• Egypt attracted USD 46.1 billion in FDI in FY2023/24 — the highest in its history.
• This was largely driven by the UAE’s USD 35 billion Ras El Hekma megaproject.

IMF Support Boosting Investor Confidence

• Egypt is completing an $8B IMF EFF through 2026 and has an additional $1.3B Resilience & Sustainability Facility.
• Structural reforms include privatization, a flexible exchange rate, and reduced import restrictions.

Access to Trade Blocs

Egypt is a member of:

• WTO, AfCFTA, GAFTA (regional and global trade access)

Key Growth Sectors for Investors

Tourism

• Tourism grew +20% in 2025, continuing upward in 2026 due to global travel recovery and Egypt's strong brand.

Energy & Natural Gas

• Rising exports of gas and chemicals in 2025–2026.
• LNG imports remain necessary due to domestic shortages but reforms aim to stabilise supply.

Manufacturing & Export-Oriented Industries

• Exports grew +18% in 2025, with strong performance in agriculture, chemicals, gas, and textiles.
• New export market access via AfCFTA.

Logistics & Suez Canal Region

• Recovery in shipping volumes projected for 2026, though Red Sea geopolitical risks remain.

Green Energy & Climate Projects

• Strong opportunities aligned with World Bank climate-development recommendations (efficiency, resilience, low-carbon projects).

Investment Advantages

✔ Large and Growing Domestic Market

• Population surpassing 120 million, growing at ~1.4% annually.

✔ Competitive Labor Costs

✔ Strategic Location

• Gateway to the Middle East, Africa, and Europe.

✔ Government Commitment to Privatization

• Asset sales (e.g., Ras El Hekma) have created major openings for private investors.

✔ Improving Monetary Policy Outlook

• The Central Bank expected to reduce rates by 200bps in 2026.

Under Egypt’s Investment Law No. 72 of 2017, foreign investors must establish a legal entity to operate, hire employees, and process payroll inside the country. Incorporation continues to be conducted through the General Authority for Investment and Free Zones (GAFI), which remains the central authority for company formation. By 2026, Egypt has expanded digital incorporation services, accelerated licensing processes, and introduced new reforms aimed at simplifying procedures and reducing administrative bottlenecks.

GAFI in 2026: One-Stop, Digitally Integrated Business Center

GAFI continues to function as Egypt’s primary one-stop service center for investment procedures; however, 2026 marks a major digital transformation:

✔ Electronic Investment Licensing Platform (launched mid-2025, fully operational in 2026)

GAFI now provides a fully online licensing process, allowing investors to:

• Register through the Digital Egypt platform
• Apply for required investment licences
• Upload establishment documents electronically
• Track application status in real time
• Pay all fees digitally
• Receive licences without visiting government offices

Licences can now be issued in as little as 20 working days when documents are complete.

✔ Consolidated digital services covering 41 government entities

The platform integrates approval, permit, and licensing workflows previously requiring multiple physical visits. This aligns with Egypt Vision 2030 for improved governance and transparency.

Updated Incorporation Procedures (2026)

Foreign investors are still permitted to establish or acquire Egyptian companies with 100% foreign ownership in most sectors. The incorporation process is now influenced by two parallel developments:

1. GAFI’s expanded “one-day establishment” reforms for certain company types, especially LLCs
2. The forthcoming overhaul of Egypt’s Companies Act, expected to streamline procedures and shift toward full electronic documentation (draft law announced in 2025, implementation ongoing in 2026)

1. Company Types and Documentation (LLCs and JSCs)

GAFI’s updated procedures for establishing companies—particularly Limited Liability Companies (LLCs)—now include:

Required Documents (2026)

• Draft Establishment Contract (prepared in accordance with the Investment Law)
• Company Data Form detailing business purpose, capital, partners/shareholders, location, and expected workforce
• Certificate of Non-Confusion (Name Reservation) issued by a GAFI incorporation lawyer (no direct contact with Commercial Registry staff required)
• Bank Deposit Certificate
• LLCs: 100% of capital deposited
• JSCs: Minimum paid-up capital required by law
• Supporting documents (IDs/passports of partners, lease contract of premises, etc.)

2. Accelerated “One-Day” Company Formation (LLCs)

GAFI introduced significant reforms enabling:

• Completion of incorporation in one business day
• One-step submission handled entirely by GAFI’s follow-up team
• Single point of payment (all fees merged into one transaction)
• Automatic issuance of:
• Commercial Registration
• Tax ID
• VAT Registration (no physical inspection required)
• Social Insurance Registration

All these processes are completed without the investor interacting with separate authorities, marking a major simplification compared to pre-2024 methods.

3. Digital Company Books (2026)

Paper company books are no longer required.

GAFI now issues digitally signed electronic company books, fully replacing physical versions.

4. Contract Approval and Licensing Timeline (Updated)

• After submission, GAFI typically reviews and approves the establishment contract within 24 hours, consistent with prior years.
• Lawyer signatures are still required but may now be authenticated electronically under Egypt’s ongoing Companies Act modernization.
• Final licence issuance occurs shortly after contract approval—many LLCs receive full incorporation documents within the same day under the one-day system.

Once incorporated, GAFI automatically forwards the investor’s file to the relevant authorities for commercial registry, tax, VAT, and social insurance—now conducted fully through the integrated system.

5. Post-Incorporation Requirements (2026)

• Investors must still complete Commercial Registration (now automated through GAFI).
• For many regulated sectors, additional licences may be required; these are now handled through the Investment Licensing Platform.
• Companies must activate their electronic signatures and maintain digital corporate records.

Banking

In Egypt, banking hours are typically from 8:30 AM to 2:00 PM, Sunday to Thursday, in major towns and cities. In smaller towns and villages, banking hours may vary, and some branches may operate on different schedules.

To open a bank account in Egypt, employees must provide a set of official documentation to verify their identity. Required documents typically include:

• A valid passport.

• A work visa and residence certificate.

• A letter from the home bank (if applicable).

• Recent bank statements.

• A passport-sized photograph.

These documents help the bank verify the individual's identity and ensure compliance with regulatory requirements. Once the account is established, the employee will have access to a range of banking services, including payroll processing, savings, and international transfers.

Working Week

In Egypt, a full work week is generally considered to be five 8-hour workdays, from Sunday to Thursday. This is the standard for most sectors and companies across the country. However, in some cases, particularly for specific industries or projects, employees may work a six-day week, which typically includes Saturday as the sixth workday.

This structure aligns with Egypt’s official working days and is in line with traditional business hours observed in the country.

Employment Law

Employment Contract

Employment contracts are mandatory to be in writing and must be maintained in three copies, all in Arabic. The employer, employee, and the social insurance office each keep a copy of the employment contract, which must include certain information as required by the Labor Law. The contract should include the following details:

• Company Name and the employer’s name (or representative), along with the workplace address.
• Employee Information (name, address, date of birth, place of birth, ID, qualifications).
• Compensation (salary, bonuses, annual raises, benefits).
• Contract Duration and renewal regulations.
• Working hours, days off, and leave policies.
• Confidentiality agreements and the code of ethics, if any.
• Regulation for contract termination.

Probation Period

If an employee is hired on probation, the employment contract must specify the probationary period, which cannot exceed three months. Employees cannot be put under probation more than once for the same employer.

Types of Employment Contracts

• Indefinite Employment Contract: This contract does not have a fixed expiration date (i.e., only includes the starting date). If a definite contract ends and the company does not renew or terminate it before the end date, it automatically becomes an indefinite contract.
• Definite Employment Contract: This contract has a fixed period (with both a start and an end date). It will terminate when the contract expires but may be renewed by mutual agreement. This is in line with Article No. 106 of Labor Law No. 12 of 2003.

Working Hours

As per the Labor Law, employees are not to work more than eight hours a day or 48 hours per week. In practice, private sector employees often work five days a week (Sunday to Thursday). Working hours can extend to 9 hours per day, including a one-hour break.

Annual Leave (2026)

According to the updated 2025/2026 labour law:

• Employees are entitled to 15 days of paid annual leave after completing 6 months of employment.
• After one full year, annual leave increases to 21 days.
• After 10 years of service or at age 50, entitlement increases to 30 days.
• Employees over 50 may receive 45 days in some cases (as reflected in updated entitlements for older workers).
• Employees working in remote or difficult areas receive an additional 7 days.
• Official public holidays do not count towards annual leave.

Pilgrimage Leave

Under the traditional rule, which remains unchanged in 2026:

• Employees who have completed 5 years of consecutive service are entitled to one month of paid leave to perform pilgrimage (Hajj or equivalent religious duty).
• This leave is granted once during the employee’s entire period of service.
  (Still recognized under updated regulations; no changes noted in the 2025–2026 amendments.)

Maternity & Childcare Leave (Updated for 2026)

The new 2025 labour law increased maternity protections:

Maternity Leave

• Female employees are now entitled to 120 days of fully paid maternity leave (increased from 90 days).
• This entitlement can be used up to three times during employment.
• There is no minimum tenure requirement under the new law (previously 10 months).
• Pregnant women cannot be required to work overtime, including during pregnancy and for 6 months after childbirth.
• In the third trimester, women are entitled to reduced working hours.

Breastfeeding & Childcare Leave

• Women receive two 30-minute paid breastfeeding breaks per day for two years following childbirth.
• If the workplace has 50+ employees, female employees may take up to two years of unpaid childcare leave, up to three times during their career.

Overtime Pay (2026)

The traditional rates remain valid under the current labour system:

• 35% extra for daytime overtime.
• 70% extra for nighttime overtime.
• 100% extra for overtime on weekly rest days.
• 200% (double pay) for work on official public holidays.

Sickness Leave (Updated Interpretation for 2026)

Under the updated framework:

Private sector (general entitlement)

• Employees are entitled to sick leave when certified by a competent medical authority.
• Sick leave compensation ranges:
• Up to 3 months at full pay (100%)
• Next 3 months at 85%
• Additional 3 months at 75% (in industrial sectors)

General rule still used in many non-industrial sectors

Older structure (still referenced in practice)

• Up to 6 months compensated at 75%–100% depending on medical evaluation.

National Service

• Military service remains mandatory for Egyptian male citizens.
• During service, wages are paid directly by the Egyptian Armed Forces.

Employees retain full employment rights and must be reinstated following service.

Tax & Social Security

Egypt’s 2026 tax and social insurance framework remains governed primarily by Income Tax Law No. 91 of 2005 (as amended) and the Unified Social Insurance Law No. 148 of 2019, with updated brackets, allowances, and contribution caps reflecting reforms enacted through 2024–2026.

1. Personal Income Tax in 2026

Progressive Income Tax Brackets (unchanged for 2026)

Verified sources confirm the following 2026 PIT brackets:

Tax-Free Allowance (Exemption Threshold)

• Annual personal exemption: EGP 20,000
  (This is applied on top of the 0% bracket.)

Residency rules

• Residents taxed on worldwide income.
• Non-residents taxed only on Egypt-sourced income.

Payroll Withholding & Annual Filing

• Employers must withhold PIT monthly and remit to ETA.

• Companies must reconcile payroll tax by 31 March annually.

2. Social Insurance (Social Security) in 2026

Egypt applies mandatory social insurance contributions to both employees and employers.

Contribution Rates (2026)

Updated Insurable Salary Caps — Effective 1 Jan 2026

Following the legally mandated 15% annual increase (2021–2027):

• Minimum insurable wage: EGP 2,700
• Maximum insurable wage: EGP 16,700

Practical effect:

Social insurance is calculated only on salary components within the minimum–maximum wage bands. Income above the cap is not subject to contributions.

Covered Benefits include:

• Pensions (old age, disability, death)
• Work injury
• Unemployment
• Medical insurance (through Egypt’s unified system)

Administrative Changes for 2026

• Mandatory use of the Unified National Social Insurance Platform
• Real-time digital updates for hiring, terminations, and salary changes
• Late updates incur EGP 100/day penalties

3. Payroll Tax Compliance (2026)

Egypt intensified payroll compliance requirements for 2026:

Digital Payroll Reporting (ETA & NOSI)

• Full electronic submission of payroll data by the 25th of each month
• Integrated file must include PIT withholding + social insurance + employee registers
• Manual submissions have been phased out

• Non-compliance can block work permits and tax clearances

Mandatory Employee Registration

• Employers must register new hires with ETA and NOSI within 15 days

Pro-rations & Audits

• Mid-month hires/terminations must be prorated exactly, or automated systems may flag mismatches.

4. Corporate Tax (High-Level Context for 2026)

• Corporate income tax (CIT) remains generally 22.5% (not changed in 2026).

• New FY 2026/27 reforms target:

• Real estate tax simplification
• Expanded digital tax systems
• International tax standard alignment
• Expanded electronic payroll tax rollout

Payroll

Reports

Employers in Egypt are required to submit various payroll reports to ensure tax, social insurance, and labor law compliance. Key payroll reports include:

1. Monthly Payroll Report: Includes salary, allowances, bonuses, and deductions. Due by the 15th of each month.
2. Social Insurance Contribution Report: Details employee and employer contributions to social insurance. Due by the 15th of each month.
3. Income Tax Report: Reports income tax deductions and withholdings for employees. Due by the 15th of each month.
4. Annual Reconciliation Report: Reconciles tax and salary calculations for the fiscal year. Due in January of the following year.

Deadlines:

• 15th of each month: Payroll and social insurance reports.
• January: Annual tax reconciliation.

Failure to comply with these deadlines may result in penalties and fines, including up to 2% of due amounts plus interest.

Pay-slip Example

New Employees

• Registration within 15 days
• Submit ID, education certificates, birth certificate, employment contract, Form 1, and passport/work permit if applicable

Leavers

• Submit resignation/termination letters, clearance form, final settlement
• Notify social insurance to unregister the employee
• Provide End of Service Certificate if needed

Employee Benefits

Expenses

• Expenses are included in the payroll only if they are considered part of the employee's income.
• Companies must follow their individual expense policies regarding reimbursements.
• Car mileage is often included in the payroll, but each company sets its own reimbursement policy per mile.
• Company cars may be treated as a taxable benefit if used for personal and business purposes, and their value may be included in the employee’s income.
• The reimbursement for car mileage varies by company policy, considering factors like fuel prices and vehicle type, and is taxed if included in the payroll.

Visas

• Required for all non-citizens
• Residence and work permit mandatory for employment over 3 months

Required Documents:

• Employment contract
• Medical and police clearance
• Proof of residency and employer registration
• Work permit issued and tracked by Ministry of Manpower

5. Key 2026 Changes at a Glance