Salary from a foreign employer while living in Egypt: who pays the tax

Executive summary

• A salary due from a foreign source for work performed in Egypt is subject to salary tax in Egypt (article 9(2) of Income Tax Law No. 91 of 2005).
• Where the employer is not resident in Egypt or has no centre or establishment there, the obligation to remit the tax falls on the employee (article 16).
• The executive regulations require a comprehensive statement at the beginning of January each year of the total received in the previous year, with the tax due, filed with the tax office for the employee's place of residence (article 23 of the regulations).
• The tax is computed on the individual rate table in force for 2026, after the annual personal allowance of EGP 20,000 that applies to salary income.
• For social insurance, an Egyptian working in Egypt for a foreign embassy or an international organisation under a personal contract is treated as an Egyptian working abroad (article 2 of Social Insurance and Pensions Law No. 148 of 2019).

Why the salary is taxable in Egypt

Article 9 of the law applies the tax to salaries and similar income as follows:

1- Everything due to the taxpayer for work for others, with or without a contract, on a regular or irregular basis ... whether for work performed in Egypt or abroad and paid from a source in Egypt ... 2- What is due to the taxpayer from a foreign source for work performed in Egypt.

The first item governs a salary paid from Egypt wherever the work is done; the second governs a salary paid from abroad for work performed in Egypt. Someone who works from Egypt for an employer abroad and is paid by it falls under the second item, and the salary is subject to salary tax in Egypt.

Who remits the tax

Ordinarily the employer withholds the tax from the salary and remits it within the first fifteen days of the following month (article 14). Where the employer is abroad, article 16 applies:

Where the employer or the person obliged to pay the taxable income is not resident in Egypt or has no centre or establishment there, the obligation to remit the tax falls on the person entitled to the taxable income, in accordance with the rules and procedures set by the executive regulations of this Law.

The employee is the one obliged to remit. Article 23 of the executive regulations sets the procedure: for a resident, the competent office of the Egyptian Tax Authority (the ETA) is the one for the place of residence, and the employee must file with it "at the beginning of January each year a comprehensive statement of the total amounts received during the previous year", with the tax due, on Form No. 5 (Salaries). The form and the way it is filed are best confirmed with the competent office before the first statement.

How the tax is computed

The salary is computed on an annual basis (article 10), and the personal allowance of EGP 20,000, which applies to salary income, is deducted (article 13(1), as replaced by Law No. 7 of 2024). Social insurance contributions are also deducted where they are withheld (article 13(2)). The individual table in article 8, as replaced by Law No. 7 of 2024 and in force for 2026, then applies: nil up to EGP 40,000, then 10%, 15%, 20% and 22.5%, and 25% above EGP 400,000, with the lower brackets falling away progressively above EGP 600,000; where net income exceeds EGP 1,200,000, the first EGP 1,200,000 is taxed at 25% and the excess at 27.5%. The detail is in Egypt's personal income tax brackets.

An illustration: an employee working from Cairo for a company abroad earns the equivalent of EGP 40,000 a month, with no social insurance contributions withheld. The annual salary is EGP 480,000, EGP 460,000 after the personal allowance, and the tax for 2026 is EGP 89,750: nil on the first 40,000, 1,500 on the next 15,000, 2,250 on the 15,000 after that, 26,000 on the next 130,000, 45,000 on the 200,000 after that and 15,000 on the last 60,000.

The social insurance position

Article 2 of Law No. 148 of 2019, in its category of Egyptians working abroad, provides that "an Egyptian worker in units of international and regional organisations and foreign embassies within the Arab Republic of Egypt, bound by a personal employment contract and not subject to the Labour Law, is treated as an Egyptian worker abroad". The National Organization for Social Insurance offers membership of the scheme for Egyptians working abroad at the citizen's request and at a contribution income band of the citizen's choice, and its documents include a copy of the employment contract with the international organisation or foreign embassy, according to the service page on its website.

Where someone works from Egypt for a foreign company with no presence in Egypt, the insurance position depends on the nature and characterisation of the contract: a contract of employment or a contract for services. The same question also matters for tax, because a profession practised independently, in which the main element is the work itself, is taxed as income from a non-commercial profession, not as salary (article 32).

What this requires

• Establish where the work is performed: salary for work performed in Egypt is taxable in Egypt even when it is paid from abroad.
• Keep the employment contract and the monthly salary records, on which the annual statement is built.
• File the comprehensive statement at the beginning of January for the previous year, with the tax, at the tax office for the place of residence.
• Compute the tax on the annual salary after the personal allowance, on the article 8 table.
• For those working for a foreign embassy or an international organisation in Egypt under a personal contract: consider membership of the scheme for Egyptians working abroad.
• Where tax has been withheld on the salary in the employer's country, refer to the double taxation treaty between Egypt and that country before filing.

The firm's Tax Department computes the tax of those working for an employer abroad, prepares their annual statement and reviews how their contract is characterised.

Mahmoud Nassef, Founder Partner
Chartered Accountant, Ministry of Finance, Egypt

Member, Egyptian Society of Accountants & Auditors
Member, Egyptian Tax Society
Member, Egyptian Society for Public Finance and Taxation

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Disclaimer: This bulletin is prepared for general information on the legislation in force at the date of its publication. It does not constitute a professional opinion or tax or legal advice on any particular matter, and it should not be relied upon in place of advice based on an examination of the circumstances of each case. Nassef & Partners International accepts no responsibility for any action taken, or refrained from, in reliance on its contents. The positions stated remain subject to subsequent legislation and decisions.