What does it really cost to hire an employee in Egypt in 2026?
Egypt caps the social insurance base at EGP 16,700/month per employee under the 2026 NOSI adjustment. The employer pays 18.75% on wages up to that ceiling. Above it, the contribution stops. That ceiling is the single most important figure for any Egypt cost model.
· Egypt guide
Illustration · Cairo, Egypt
Hiring in Egypt costs more than the gross salary. The biggest mandatory line is social insurance. The employer pays 18.75% of the employee's wage into the social insurance fund each month.
The contribution applies on wages up to the maximum insurable ceiling of EGP 16,700/month. Above that ceiling, no employer contribution applies. This cap makes Egypt's social insurance cost predictable for higher earners.
Add 15 days of paid leave in year one, 17.4 weeks of fully paid maternity cover, and one day of paternity leave. Egypt also sets a private sector minimum wage of EGP 7,000/month. All of these apply from day one under Labour Law No. 14 of 2025.
The headline: what an Egypt hire actually costs
Start with the gross monthly salary. Add 18.75% social insurance on wages up to the insurable ceiling of EGP 16,700/month. Above that ceiling, the employer contribution stops.
The table below shows illustrative totals at an EGP 180,000 annual salary (EGP 15,000 per month). These are computed from verified rates and labelled illustrative. They are not statutory figures.
The components below are based on the statutory rates in the Egypt compliance cache and an illustrative gross salary of EGP 180,000 per year (EGP 15,000 per month). This is broadly mid-market for a professional role in Cairo. All totals marked "illustrative" are computed from the rates shown. They vary with actual salary level, benefits provided, and whether the wage sits above or below the insurable ceiling.
| Line | Illustrative annual cost on EGP 180,000 salary | Source |
|---|---|---|
| Gross salary | EGP 180,000 | Contract |
| Employer social insurance at 18.75% on EGP 15,000/month (below EGP EGP 16,700/month ceiling, so full wage is insurable) | EGP 33,750 (illustrative) | NOSI 2026 insurable wage adjustment |
| Annual leave: 15 days in year one, built into gross salary cost | Included in salary | Labour Law No. 14 of 2025, Article 47 |
| Maternity leave provision (17.4 weeks for eligible employees) | Event-driven; reserve per headcount | Labour Law No. 14 of 2025, Article 54 |
| Paternity leave: 1 day on birth date | Negligible; included in salary reserve | Labour Law No. 14 of 2025, Article 128 |
| Total illustrative employer cost | EGP 213,750 (illustrative) | Approx. 119% of gross (illustrative) |
These figures are illustrative. The social insurance line is computed as 18.75% applied to EGP 15,000 per month (EGP 180,000 annually). At this salary the full wage falls below the insurable ceiling of EGP 16,700/month, so the full rate applies. For salaries above that ceiling, the employer contribution is capped at 18.75% of EGP 16,700/month regardless of actual pay.
Add Teamed from $599 per employee per month and the total rises further. Use the Employer Cost Calculator to run your own figures.
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Fix the gross monthly salary
Confirm the agreed gross salary. Check whether it sits above or below the social insurance ceiling. That determines whether the full employer contribution applies or whether it is capped.
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Add employer social insurance
Apply the employer contribution rate to the insurable wage. If the salary is above the ceiling, the contribution is capped at the rate applied to the maximum insurable amount.
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Provision for leave and maternity
Annual leave is built into the gross salary cost. Provision separately for maternity leave as an event-driven cost. The employer funds full salary for the statutory period.
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Plan for severance and notice
The severance formula steps up after year five. Include an accruing provision from day one, especially for roles you expect to last several years.
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Run the full cost model
Use the Teamed Employer Cost Calculator for a complete, currency-converted breakdown before confirming the offer. Include social insurance, leave provisions, and any contractual benefits.
Statutory leave and family benefits in Egypt
Every employee gets 15 days of paid annual leave in the first year. From year two this rises to 21 days.
Maternity leave is 17.4 weeks of fully paid leave. Paternity leave is 1 day on the birth date. Both apply to all employees from the first day of employment.
Egypt's leave structure comes directly from Labour Law No. 14 of 2025, which replaced the prior Labour Law No. 12 of 2003 from 1 September 2025. The key changes affecting leave are the new annual leave schedule and the confirmed maternity period of four calendar months.
Annual leave schedule
Year one: 15 days of paid leave. Years two to nine: 21 days of paid leave. After ten years of service, employees become entitled to 30 days. The ten-year entitlement is confirmed across multiple law firm sources but is not a separate figure key in the Egypt cache. Budget for the step-up as tenure grows.
Maternity leave
Maternity leave is 17.4 weeks of fully paid leave under Article 54 of Labour Law No. 14 of 2025. The employer funds salary continuation for the full period. For employees covered by social insurance, the Social Insurance Law also provides a maternity benefit, but the employer remains responsible for the full salary obligation during the leave.
Paternity leave
Fathers are entitled to 1 day of fully paid leave on the date of their child's birth under Article 128 of Labour Law No. 14 of 2025. This is a single paid day; it is the entire statutory paternity entitlement in Egypt. Any additional paternity leave you offer is a contractual benefit, not a legal requirement.
Sick pay
For general employees covered by social insurance, the Social Insurance Law No. 148 of 2019 sets a sick pay rate of 75% of the average daily insurable wage for the first 90 days of illness. After 90 days the rate rises. The fund (not the employer) pays this benefit once the employee qualifies. Industrial-establishment workers have a separate enhanced sick pay structure under Labour Law No. 14 of 2025 that provides higher rates for the first three months of illness. Confirm the applicable regime for your employee's sector at onboarding.
Egypt income tax bands for 2026 and what they mean for take-home pay
Egypt taxes earned income on a seven-band scale. Income up to EGP 40,000/year is taxed at 0%.
The top rate is 27.5% on annual income above EGP 1,200,001/year. There is also a separate annual salary exemption of EGP 20,000/year that applies on top of the zero-rate band.
Egypt uses a progressive income tax scale under the Egyptian Income Tax Law No. 91 of 2005 as amended. Employers withhold income tax monthly under the withholding-at-source system and remit to the Egyptian Tax Authority. Understanding the bands helps you make competitive net-pay offers.
Income tax bands (annual earned income, 2026)
| Income band (annual) | Tax rate |
|---|---|
| Up to EGP 40,000/year | 0% |
| EGP 40,001/year to EGP 55,000/year | 10% |
| EGP 55,001/year to EGP 70,000/year | 15% |
| EGP 70,001/year to EGP 200,000/year | 20% |
| EGP 200,001/year to EGP 400,000/year | 22.5% |
| EGP 400,001/year to EGP 1,200,000/year | 25% |
| Above EGP 1,200,001/year | 27.5% |
The annual salary exemption
Both resident and non-resident employees are entitled to an annual salary tax exemption of EGP 20,000/year. This is a deduction applied to the taxable base, on top of the zero-rate band. The two reliefs together mean that a full-time employee earning around EGP 7,000/month falls entirely within the zero-rate band for most of the year.
Employee social deductions
The employee also pays 11% social insurance on insurable wages up to EGP 16,700/month. This comes out of gross pay before income tax is calculated on the net. Confirm the calculation order with your payroll provider before modelling net pay, as the sequencing affects the final take-home figure.
How Teamed handles Egypt employment costs for you
Teamed becomes your legal employer of record in Egypt for from $599 per employee per month, with zero FX mark-up in any currency.
Social insurance, withholding tax, and the full Egypt payroll compliance stack run on one platform.
Real HR and legal experts handle your Egypt hires from the first offer letter through every monthly social insurance filing and income tax remittance. An actual person, not a chatbot or a pooled queue. There is no setup fee and no exit fee. Every employer contribution passes through at cost, itemised on every invoice. You see the social insurance line, the maternity reserve, and the severance provision separately. Nothing is hidden inside the management fee.
EOR payroll, contractor onboarding, and entity setup all live on one platform. An Egypt contractor who converts to payroll keeps their record. That same employee can graduate from EOR to your own Egypt entity without switching systems. EOR is the right structure for a first Egypt hire, until it isn’t. Teamed does not lock you in. Start from the Egypt hiring overview or run the Employer Cost Calculator to see the full picture.
Frequently asked questions
What is the employer social insurance rate in Egypt in 2026?
The employer pays 18.75% of the employee's insurable monthly wage into the social insurance fund. The insurable wage is capped at EGP 16,700/month from January 2026 under the NOSI annual adjustment. For any employee paid more than that, the employer's monthly contribution is capped at 18.75% of EGP 16,700/month. The employee pays 11% on the same insurable base.
How much annual leave must an Egypt employer provide?
Every employee is entitled to 15 days of paid annual leave in the first year of service under Labour Law No. 14 of 2025, Article 47. From year two to year nine, the entitlement rises to 21 days. After ten years of service, employees are entitled to 30 days. Annual leave pay is built into the gross salary cost and is not a separate cash-out line.
What is the Egypt severance formula?
Egypt's severance formula under Articles 171 to 172 of Labour Law No. 14 of 2025 pays 0.5 months of salary per year of service for the first five years, then 1 month of salary per year for each year beyond five. These are verified statutory rates. The illustrative total on a five-year hire is 2.5 months of final salary; on a ten-year hire it is 7.5 months. Actual amounts depend on the final salary at separation.
What are the income tax rates in Egypt in 2026?
Egypt's income tax runs on seven bands from 0% on income up to EGP 40,000/year up to 27.5% on income above EGP 1,200,001/year. Both residents and non-residents also benefit from an annual salary exemption of EGP 20,000/year on top of the zero-rate band. Employers withhold income tax monthly and remit to the Egyptian Tax Authority within 15 days of the following month.
How much paid maternity and paternity leave does Egypt require?
Maternity leave is 17.4 weeks of fully paid leave under Article 54 of Labour Law No. 14 of 2025. The employer funds salary for the full period. Paternity leave is 1 day on the birth date, fully paid, under Article 128. Any paternity leave beyond that one day is a contractual benefit, not a legal right.
The most common Egypt cost modelling error we see is missing the insurable wage ceiling. The employer social insurance rate is straightforward. But whether the salary is above or below the ceiling completely changes the maths. A salary above the ceiling means a fixed maximum contribution regardless of how high the pay goes. Ignore that ceiling and you will overestimate costs on senior hires every time.
Egypt's social insurance ceiling of EGP 16,700/month caps the employer contribution at 18.75% of that ceiling for any employee paid above it.
Add 15 days days of paid leave in year one, 17.4 weeks of paid maternity, and a severance formula that doubles after five years.
Know every line before you send the offer.
Social insurance: Egypt's main employer contribution
The employer pays 18.75% of the employee's insurable wage into the social insurance fund each month.
The insurable wage is capped at EGP 16,700/month from January 2026. For any employee earning more than that, the employer's contribution stays fixed at 18.75% of EGP 16,700/month.
Egypt's social insurance is run under Social Insurance Law No. 148 of 2019. Both employer and employee contribute on the employee's insurable wage. The employer rate is 18.75%. The employee rate is 11%. The NOSI (National Organisation for Social Insurance) adjusts the insurable wage ceiling each year.
From January 2026, the maximum insurable monthly wage is EGP 16,700/month. The employer pays 18.75% on insurable wages up to that ceiling. The employee pays 11% on the same base. Wages above the ceiling are not subject to social insurance contributions.
Source: Mercans: Egypt minimum and maximum insurable wage limits increase for social insurance from 2026
The ceiling makes high-earner costs predictable
Once an employee's salary exceeds EGP 16,700/month, the employer's social insurance bill does not grow further with the salary. The maximum monthly employer contribution is fixed at 18.75% of EGP 16,700/month. This is different from countries with no contribution ceiling (such as the UK), where employer social costs rise proportionally with every salary increase.
Minimum wage floor
The private sector minimum wage is EGP 7,000/month from March 2025 under the National Council of Wages decision and Labour Law No. 14 of 2025. No hire can be made below this floor. Social insurance contributions apply from the first pound of salary above zero, so even a minimum wage hire carries the full 18.75% employer contribution.