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When employing staff in Egypt, payroll teams must navigate a number of statutory requirements, one of the most important being the correct calculation of social security contributions. A recent client query highlighted how easily errors can occur when employers are unsure which payroll elements should be included or excluded.
Under Egypt’s Comprehensive Social Insurance Law No. 148/2019, social security payments must be calculated based on the employee’s “comprehensive insurance salary.” This figure represents the total wages received by an employee from their employer.
Understanding what makes up “total wages” is essential for ensuring accurate contributions and avoiding compliance issues.
The “comprehensive insurance salary” includes all forms of compensation agreed to in the employment contract or required by law. This extends beyond base salary and covers most additional earnings.
Employers must include:
Essentially, if the payment is tied to the employee’s role, performance, or contractual entitlements, it generally forms part of the social security base.
Understanding Egypt’s definition of “comprehensive insurance salary” is essential for accurate social security calculations and payroll compliance.
Certain payments are not considered part of the comprehensive insurance salary. These are typically benefits or reimbursements that fall outside of direct wage compensation.
Employers must exclude:
Excluding the correct items is just as important as including the right ones. Mistakes can lead to incorrect contribution amounts, compliance findings, or payroll disputes.
By reviewing the law and its practical application, Praxima was able to advise the client on exactly which elements to include when calculating social security for their Egyptian workforce. This ensured accuracy, compliance, and peace of mind for both employer and employees.
Egypt’s payroll framework can be nuanced, but with the right guidance, employers can meet their obligations confidently and consistently.
