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Country Introduction – Egypt
Egypt, officially Arab Republic of Egypt, formerly United Arab Republic, Country, Middle East, northeastern Africa. Area: 384,791 sq mi (996,603 sq km). Population: (2021 est.) 101,993,000. Capital: Cairo. The people are largely Egyptian Arabs.
Language: Arabic (official).
Religions: Islam (official; predominantly Sunni); also Christianity.
Currency: Egyptian pound.
Egypt occupies a crossroads between Africa, Europe, and Asia. The majority of its land is in the arid western and eastern deserts, separated by the country’s dominant feature, the Nile River. Pharaonic Egypt thrived for some 3,000 years through a series of native dynasties that were interspersed with brief periods of foreign rule. After Alexander the Great conquered the region in 323 BCE, urban Egypt became an integralpart of the Hellenistic world. Under the Greek Ptolemaic dynasty, an advanced literate society thrived in the city of Alexandria, but what is now Egypt was conquered by the Romans in 30 BCE.
Contract of Employment
Employment contracts in Egypt must be issued in Arabic and in-line with the ministry of labour. The employment contract must set out the terms of employment and has to define the notice period, salary breakdown in local currency along with the probation period.
Probation Period
Up to a maximum of 6 months.
Sur Tax
1% tax will be deducted from net income from workers of all sectors of the state, to contribute to facing some economic consequences resulting from the spread of Coronavirus. This measure will be in effect for 1 year. Anyone earning less than 2,000 EGP is exempt.
VAT / GST:
14% – not applicable on invoices out of Egypt (EWS will not charge VAT).
Income Tax
Two things have changed, one is the personal exemption amount per year has increased to EGP 9,000 and the second change is that there are additional tax brackets as shown below
| Slide | Slide % | From | To | Slide Range | Tax Applied |
| 1 | 0.0% | – | 5,000 | 15,000 | – |
| 2 | 2.5% | 15,000 | 30,000 | 15,000 | 375 |
| 3 | 10.0% | 30,000 | 45,000 | 15,000 | 1,500 |
| 4 | 15.0% | 45,000 | 60,000 | 15,000 | 2,250 |
| 5 | 20.0% | 60,000 | 200,000 | 140,000 | 28,000 |
| 6 | 22.5% | 200,000 | 400,000 | 200,000 | 45,000 |
| 7 | 25.0% | 400,000 | 600,000 | 200,000 | 50,000 |
Highest taxable incomes have additional tax implications as per below:
| Slide | Categories | From | To | Tax % |
| 1 | Category 1 | 600,000 | 700,000 | 0.0% |
| 2 | Category 2 | 700,000 | 800,000 | 2.5% |
| 3 | Category 3 | 800,000 | 900,000 | 10.0% |
| 4 | Category 4 | 900,000 | 1,000,000 | 15.0% |
| 5 | Category 5 | above one million | 20.0% | |
Emergency Relief Fund
Emergency Relief Fund (ER Fund) is a state-run fund, set up in 2002 and is affiliated with the Ministry of Manpower. It provides financial assistance to Egyptian workers whose employers either ended their activities or stopped paying salaries to their staff.
All Egyptian companies with 30 or more socially insured staff must make this payment monthly to the Labour office. Since the basic salary has been recently declared to increase from EGP1,790 to EGP1,920, this means the monthly ER Fund contribution per employee has now increased from EGP17.90 to EGP19.20
The Martyrs and Victims Fund Tax
A new fund tax was established honouring martyrs, victims, missing, the injured of war and their families. A small percentage from monthly gross salaries would need to be deducted from employees of public authorities, public sector bodies and companies, and subsidiaries of these entities, from units of a special nature, private funds, and employees of private legal persons for whom the provisions of the labour law apply except for irregular or daily paid employees. If someone earns 10,000EGP gross per month, the deduction would be EGP5 per month from this individual.
Social Insurance
| Employee Share | Employer Share | ||
| Minimum Social Insurance | 1,200.00 | 132.00 | 225.00 |
| Maximum Social Insurance | 8,100.00 | 891.00 | 1,518.75 |
| BOD | 8,100.00 | 1701.00 | |
| ER Fund | 1,920.00 | 19.20 |
Severance Pay
Severance payment is not mandatory in Egypt unless outlined in the employment contract.
The employer may choose to terminate (for convenience) a number of employees through amicable settlements. By such settlements the concerned employees would sign voluntary resignations, and the employer – in return – would pay them severance compensations.
The amount of the severance compensation would vary depending on various elements, including but not limited to (1) the type of the employment contract (definite vs. indefinite term contract), (2) the employee’s age (i.e., if the employee is approaching the statutory retirement age in short term, or if the employee works after the statutory retirement age) and (3) the employee’s history with the company.
The Social Insurance Law (Law No. 79/1975) establishes the right to severance pay upon employees reaching the age of 60. Severance pay is calculated at the rate of a half a month’s wage for each of the first five years of service and one month’s pay for each of the following years, and the indemnity is calculated on the basis of the last salary paid to the employee.
Termination
An agreement will generally terminate with the expiry of its period, or the accomplishment of the work it has been concluded for. If the term of the agreement is not defined by an agreement or by the type or work or its purpose, either party may put an end to this relationship by providing written notice (2 months prior to termination if the worker’s uninterrupted length of service does not exceed ten years, and three months prior to the agreement termination if that period exceeds ten years) to the other party. In all cases, the notification period cannot be reduced, however it can be increased if both parties agree to this.
Public holidays
14 national holidays per annum.
Annual leave
Employees typically get 21 days of annual paid leave after working for six months. Once they work for 10 years or reach the age of 50, they get a month of paid leave.
Sick Leave
Employees are generally entitled to up to 6 months of sick leave.
For the first 90 days of sick leave, the employee entitled to 75% of their salary.
For the following 90 days, the employee is entitled to 85% of their salary.
If necessary, the employee may convert their annual leave days to sick leave.
Maternity Leave
Female employees that have been contributing to social insurance to the past 10 months are entitled to up to 3 months’ maternity leave for each child up to three children and are entitled to 75% of the last salary.
Work related injury leave
For temporary disability, 100% of the wage is paid from the first day of injury until the employer is cleared to return to work or is declared permanently disabled.
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