Egypt's social insurance contributions: employer and employee shares

Executive summary

• For a private-sector employee the employer pays 18.75% of the insurable wage and deducts 11% from the employee's pay, 29.75% in all, spread across the four insurances of Social Insurance and Pensions Law No. 148 of 2019 (article 3) and its end-of-service reward scheme.
• The rates apply to the insurable wage, not to total pay: the January wage less the excluded allowances, between EGP 2,700 and EGP 16,700 in 2026.
• Contributions fall due on the first day of the following month, and no additional amount is charged if they are paid within fifteen days of that date (article 121).
• The old-age, disability and death contribution rises by 1% every seven years, split equally; the regulations count from 1 January 2020, so the first rise falls on 1 January 2027 (article 19 of the Law; article 57 of the regulations).

The rates in detail

The executive regulations issued by Prime Ministerial Decree No. 2437 of 2021 repeat these rates in articles 57 to 62. Three of them need explaining:

Work injury, 1.5%, has two parts: 1% for treatment and medical care, paid to the health insurance body, for those not covered by the Universal Health Insurance Law; and 0.5% for cash benefits, "raised up to (1%) according to the risks of the establishment's activity" as the regulations determine (article 46). The regulations repeat that rule without setting the risk grades (article 60 of the regulations), and we have not found a decision setting them at the date of this review. The cash-benefit rate is halved where the National Organization for Social Insurance (NOSI) agrees that the employer will pay wage compensation and transport costs itself (article 46), under a one-year licence renewed annually (article 60 of the regulations).

Sickness is 3.25% on the employer and 1% on the employee, of which 4% goes to treatment and 0.25% to wage compensation and transport costs; the President of NOSI may exempt the employer from the 0.25% if it pays that compensation itself. Where the health insurance body authorises the employer to treat its own employees, the contributions allocated to treatment fall to 1% of wages, borne by the employer, plus the 0.25% (article 70).

Unemployment, 1%, is borne by the employer alone. Employees in casual or temporary work are excluded from this insurance, in particular construction, itinerant, seasonal, loading and unloading, land transport, agricultural and fishing workers, and entitlement requires that the employee is not over the old-age pension age, which is sixty in 2026 (article 85 as corrected by the corrigendum published in the Official Gazette on 28 November 2019, and article 1, item 10).

On what wage exactly

Every rate applies to the insurable wage, not to the employee's total pay. In the private sector the insurable wage is the January wage, less listed allowances such as transport and housing, never below the minimum or above the maximum, which for 2026 are EGP 2,700 and EGP 16,700. It stays fixed for the year, and an employee who joins after January is insured on the wage of the month he joined until the following January (article 115 of the Law; article 70 of the regulations).

Example: an employee with an insurable wage of EGP 13,000 in 2026:

EGP 1,430 is deducted from the employee's pay, the employer bears EGP 2,437.50 on top of the pay, and the employer remits EGP 3,867.50 in all. At the maximum (EGP 16,700) the employer's share is EGP 3,131.25 and the employee's EGP 1,837; at the minimum (EGP 2,700), EGP 506.25 and EGP 297. The example assumes 0.5% for the cash-benefit part of work injury; if the rate is raised for the risk of the activity, the employer's share rises accordingly.

Due date and late payment

The employer must pay the contributions due for a month, both its own share and the employee's share deducted from pay (article 115), "on the first day of the month following the month in which they fall due" (article 121). Late payment attracts a monthly additional amount for the period of delay up to the end of the month of payment, at the average yield on Treasury bill and bond issues in the month before the month in which payment is due, plus 2%, waived if payment is made within fifteen days of the due date (article 121 of the Law; article 71 of the regulations). Each month's contributions are therefore paid in the first fifteen days of the following month. The year's deadlines are collected in the Egypt tax and social insurance compliance calendar.

The January 2027 increase

Article 19 of the Law provides that "the contribution rate shall be raised by (1%) every seven years from the date this Law comes into force, divided equally between the employer and the insured, provided that the total contribution rate does not exceed 26%". The Law has been in force since 1 January 2020 (article 7 of the promulgation law), and the regulations expressly provide for the increase "every seven years from 1/1/2020" (article 57). On that text the first increase falls on 1 January 2027:

On an insurable wage of EGP 13,000 the employer's share becomes EGP 2,502.50 and the employee's EGP 1,495. The increase arrives in the same payroll as the new 2027 limits, so NOSI's instructions should be checked before that payroll is prepared.

Cases outside the rule

• An employee under 18 in the private sector falls outside the employee category, for which the Law requires the age of 18, and is covered by work-injury insurance (articles 2 and 45).
• General partners, managers of limited liability companies, and the chairmen, board members and managing directors of private-sector joint stock companies belong to the employers' category (article 2(ii)) and have no insurable wage: each contributes on an income he chooses from the table in the regulations, and the old-age contribution is 21% of that income in 2026 (article 19). A person who meets the conditions of more than one category is insured in one only, in their order, with employees first (article 2 of the regulations).
• Employees covered by the Universal Health Insurance system (Law No. 2 of 2018): the 1% work-injury treatment contribution applies only to those not covered by it (article 46), and articles 46 and 70 both open "without prejudice to the provisions of the Universal Health Insurance System Law".
• Sickness insurance applies gradually to those designated by decision of the chairman of the board of the health insurance body, without prejudice to those who had it under Law No. 79 of 1975 (article 71); we have not found such a decision issued under the current Law at the date of this review.
• Arduous and hazardous work is designated by a Prime Ministerial decree that must include an increase in the contribution rate borne by the employer (article 21 of the Law; article 57 of the regulations); we have not found it to have been issued at the date of this review.

What this requires of the employer

• Compute each employee's contributions on his insurable wage, not his total pay, and deduct his share from his pay each month.
• Pay within fifteen days of the first day of the following month.
• Reconcile NOSI's demand with the computation: the work-injury rate applied to the establishment, and whether sickness insurance applies to it.
• Prepare the January 2027 payroll on the new rates and the new limits together.

The firm's Social Insurance & Labour Department computes monthly contributions and reconciles them with NOSI's demands, as part of its payroll and social insurance services.

Nehal Saied, Partner
Chartered Accountant, Ministry of Finance, Egypt

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.