Egypt's Personal Income Tax Brackets and the Falling-Bracket Rule
How much is the personal exemption, and where does the 27.5% band start? Why do higher earners lose every lower band? Articles 8 and 13 as amended in 2024, with a worked example.
Executive summary
- Egypt taxes individuals at rates from 0% to 27.5% under the table in Article 8 of the Income Tax Law (Law 91 of 2005) as replaced by Law 7 of 2024; it applies to salaries from 1 March 2024.
- The personal exemption is EGP 20,000 a year (Article 13, item 1, as replaced by the same law). It is an exemption from salary income and does not extend to business, professional or real estate income.
- The table has six columns, set by total annual net income, not one ladder that applies at every income level: each higher column drops the lower bands and starts from a higher rate on its first pound.
- The table applies to an individual's combined net income from salaries, commercial or industrial activity, professional or non-commercial activity, and real estate wealth together (Article 6), unless the activity falls under a special regime such as Law 6 of 2025.
- Law 151 of 2026, the most recent amendment to the Income Tax Law, did not touch Article 8 or 13.
Scope: which income the table covers
Egypt taxes the combined annual net income of natural persons: salaries and their equivalent, commercial or industrial activity, professional or non-commercial activity, and real estate wealth, taken together (Article 6 of Law 91 of 2005). The Article 8 table applies to the total of these four sources in the annual return, not to each on its own. Income under a special regime is outside it: a business with annual turnover not exceeding EGP 20 million that elects to use Law 6 of 2025 has its income tax set as a percentage of turnover (Article 10 of that law), not under the Article 8 table.
The brackets from March 2024
Article 1 of Law 7 of 2024 (Official Gazette No. 7 bis (a), 21 February 2024) replaced Article 8 with a six-column table, each column set by total annual net income:
| Rate | Up to 600,000 | 600,000–700,000 | 700,000–800,000 | 800,000–900,000 | 900,000–1,200,000 | Over 1,200,000 |
|---|---|---|---|---|---|---|
| 0% | 1–40,000 | – | – | – | – | – |
| 10% | 40,000–55,000 | 1–55,000 | – | – | – | – |
| 15% | 55,000–70,000 | 55,000–70,000 | 1–70,000 | – | – | – |
| 20% | 70,000–200,000 | 70,000–200,000 | 70,000–200,000 | 1–200,000 | – | – |
| 22.5% | 200,000–400,000 | 200,000–400,000 | 200,000–400,000 | 200,000–400,000 | 1–400,000 | – |
| 25% | over 400,000 | over 400,000 | over 400,000 | over 400,000 | over 400,000 | 1–1,200,000 |
| 27.5% | – | – | – | – | – | over 1,200,000 |
All figures are in EGP. The table uses one figure — annual net income — both to choose the column and to apply the rates, so the column is set by the taxable base itself (for salaries, after the Article 13 exemptions); that column alone is then read from top to bottom. The table closes with a rounding rule: "the total annual net income is rounded, for the purpose of computing the tax, to the nearest ten pounds below."
The six-column table dates from Law 26 of 2020 and was replaced three times in eight months: by Law 30 of 2023 (June 2023), Law 175 of 2023 (October 2023) and Law 7 of 2024 (February 2024). Law 151 of 2026 — the most recent income-tax amendment to date — left Articles 8 and 13 untouched; it amended other provisions, including the conditions for deducting bad debts (Article 28, first paragraph, item 4). See income tax amendments, Law 151 of 2026.
The annual personal exemption
Article 13 — in the law's chapter on salaries and their equivalent — exempts from tax, without prejudice to other exemptions granted under special laws: "an amount of EGP 20,000 as an annual personal exemption for the taxpayer" (item 1). The amount was EGP 15,000 under Law 30 of 2023 until Law 7 of 2024 raised it. It is deducted from salary income before the Article 8 table is applied, together with what the article's other items exempt within the limits it sets, including social insurance contributions and life and health insurance premiums.
The personal exemption is therefore a salary exemption only. The Authority's Circular No. 10 of 2023 applies item 1 of Article 13 to the salaries base; for the other bases — including commercial and industrial activity, professional activity and real estate wealth income — it applies only the 0% band of Article 8, which exists only in the first column.
The falling-bracket rule: a worked example, computed twice
The Article 8 table is not one ladder applying at every income level; it is six separate columns, and each higher column drops the lowest band of the column before it, starting instead at the next rate from its first pound. A taxpayer whose income exceeds EGP 600,000 gets no benefit at all from the 0% band on the first EGP 40,000; one whose income exceeds EGP 1,200,000 pays 25% from the first pound up to EGP 1,200,000, losing the graduated 0%–22.5% bands on the first EGP 400,000 of the base.
Example: an employee whose annual salary, net of social insurance contributions, is EGP 1,020,000. Less the EGP 20,000 personal exemption, the base is EGP 1,000,000 — in the "over 900,000 up to 1,200,000" column.
- Correct calculation, using that column's own bands: the first EGP 400,000 at 22.5% = EGP 90,000, and the remaining EGP 600,000 at 25% = EGP 150,000. Tax due = EGP 240,000.
- If calculated incorrectly, assuming the first column's bands (up to EGP 600,000) apply progressively regardless of total income: nil on the first EGP 40,000, EGP 1,500 at 10%, EGP 2,250 at 15%, EGP 26,000 at 20%, EGP 45,000 at 22.5%, and EGP 150,000 on the remainder at 25%. Total = EGP 224,750.
The difference is EGP 15,250 — an understatement of about 6.4% of the correct figure. The reason is not the marginal rate on the last pound; the whole base moves into a higher column and loses the lower bands entirely, not just on the additional income.
Salary tax: monthly withholding
For salaries, the employer withholds the tax from what it pays the employee and remits what it has withheld in a month within the first fifteen days of the following month (Article 14). The tax is computed on the monthly income converted to an annual figure, with a settlement each year (Article 10). The current table has applied to salaries since 1 March 2024, and to commercial, non-commercial professional and real estate wealth income from the tax period ending after 21 February 2024 — the 2024 tax year for a taxpayer whose tax period is the calendar year (Article 2 of Law 7 of 2024).
What this requires
- Confirm payroll applies the correct column against the employee's annual net income (the monthly salary converted to an annual figure), not just the first column's bands.
- Deduct the personal exemption (EGP 20,000 a year) from the salaries base before applying the Article 8 table, together with any other Article 13 exemptions that apply.
- Flag anyone with income from more than one source — salary plus commercial or professional activity — that the table applies to their combined total in the annual tax return, not to each source separately, unless the activity falls under a special regime such as Law 6 of 2025.
- Track further amendments: the table was replaced three times in eight months, and the exemption changed twice in the same period.
- Check filing and payment deadlines on the tax and insurance compliance calendar.
The firm's Tax Department computes the annual tax base for individuals under the correct column of the Article 8 table, reviews monthly salary withholding, and prepares the annual tax return.
Mahmoud Nassef — Chartered Accountant (Egyptian Register), Founder Partner
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.