Table of contents
Looking for payroll software Egypt teams can trust? Its one job is to turn attendance, leave, allowances and loans into a legally correct monthly payroll. That means calculating salary income tax and social insurance automatically, producing a payslip for every employee, generating the bank file and preparing statutory reports, without fragile spreadsheet formulas. This guide uses official 2026 figures to walk through an Egyptian net-salary calculation step by step. It then covers what changes in Saudi Arabia (GOSI and the Mudad WPS file) and what to check before you choose a payroll system.
Key takeaways
- Egypt salary tax: EGP 20,000 personal exemption and brackets from 0% to 27.5% (Law 7/2024).
- Social insurance: employee 11%, employer 18.75%; the 2026 insurable wage runs from EGP 2,700 to EGP 16,700.
- Martyrs & Victims Fund: 0.05% of gross monthly salary.
- Saudi Arabia: GOSI has two tracks (before/after 3 July 2024); WPS files go through Mudad and are matched to Qiwa contracts.
Legal information here is general guidance, not legal advice. Check the official text or your adviser before applying it.
What payroll software actually does
A payroll system is an engine that applies country rules and company policy to three groups of items:
| Group | Examples | Source of truth |
|---|---|---|
| Earnings | Basic, allowances (housing, transport), overtime, bonuses, arrears | Employee file, attendance, approved bonus requests |
| Deductions | Lateness and absence, unpaid leave, penalties, loan instalments, employee social insurance, salary tax, Martyrs Fund | Locked attendance, leave, approved penalties, loan schedule, rule pack |
| Employer cost | Employer social insurance, GOSI employer share, training levies | Country rule pack |
The principle: every line has exactly one documented source. Overtime comes from attendance, loan instalments from a schedule, never from someone's memory. That is why good payroll starts with a reliable biometric attendance system and leave management software that records unpaid leave.
Egypt salary income tax in 2026
Salaries are taxed under Income Tax Law 91/2005 as amended by Law 7/2024, which has applied to salaries since March 2024. At the time of writing, PwC's Egypt tax summary still shows the same salary brackets. Official updates are published by the Egyptian Tax Authority.
Personal exemption: EGP 20,000 a year.
| Annual taxable income (EGP) | Rate |
|---|---|
| Up to 40,000 | 0% |
| 40,000 – 55,000 | 10% |
| 55,000 – 70,000 | 15% |
| 70,000 – 200,000 | 20% |
| 200,000 – 400,000 | 22.5% |
| 400,000 – 1,200,000 | 25% |
| Over 1,200,000 | 27.5% |
High earners: above EGP 600,000 of annual net taxable income, the lower brackets are withdrawn for the whole income, one bracket at a time. Above EGP 1.2 million, the first 1.2 million is taxed at 25% and the rest at 27.5%. Spreadsheets often get this wrong.
Monthly withholding method
- Monthly taxable pay = gross taxable cash pay − employee social insurance (11% of the insurable wage).
- Annualise (× 12) and subtract the EGP 20,000 exemption.
- Apply the brackets to the annual figure.
- Divide by 12 for the monthly withholding.
- Settle at year end. For bonus months, a cumulative (year-to-date) method avoids over-taxing the employee.
Egypt social insurance in 2026 (Law 148/2019)
| Branch | Employee | Employer |
|---|---|---|
| Old age, disability and death | 9% | 12% |
| End-of-service scheme | 1% | 1% |
| Sickness | 1% | 3.25% |
| Work injury | — | 1.5% (standard risk) |
| Unemployment | — | 1% |
| Total | 11% | 18.75% |
2026 limits: NOSI set the minimum insurable wage at EGP 2,700 and the maximum at EGP 16,700 a month from 1 January 2026 (also listed in PwC's "other taxes" summary). In the private sector, contributions are based on the January wage and stay fixed for the calendar year. New joiners use their joining-month wage until the following January.
Forms payroll must track
- Form 1: registers an insured employee at hire.
- Form 2: establishment registration, the annual January wage statement, and updates when a wage-changing law is issued.
- Form 6: termination notice within one week.
The law provides for periodic increases to old-age contribution rates, and NOSI usually announces the next year's wage limits at year end. Nothing had been confirmed for January 2027 at the time of writing, so check NOSI's announcement before running January payroll.
Martyrs & Victims Fund (Law 4/2021): 0.05% of gross monthly salary, usually withheld from the employee. Temporary workers are exempt.
Worked example: net salary on EGP 20,000 a month
An employee earns EGP 20,000 gross a month. All of it is insurable and taxable, and there are no other exemptions.
| Step | Calculation | Result (EGP) |
|---|---|---|
| Insurable wage | Above the cap, so 16,700 applies | 16,700 |
| Employee social insurance | 16,700 × 11% | 1,837 |
| Monthly taxable pay | 20,000 − 1,837 | 18,163 |
| Annual taxable pay | 18,163 × 12 | 217,956 |
| After exemption | 217,956 − 20,000 | 197,956 |
| Annual tax | 0 + 1,500 + 2,250 + 25,591 | 29,341 |
| Monthly tax | 29,341 ÷ 12 | ≈ 2,445 |
| Martyrs Fund | 20,000 × 0.05% | 10 |
| Net salary | 20,000 − 1,837 − 2,445 − 10 | ≈ 15,708 |
| Employer social insurance | 16,700 × 18.75% | 3,131.25 |
Figures are before any tax-authority rounding. Note the employer pays over EGP 3,100 a month on top of gross.
Other Labour Law 14/2025 rules that affect payroll
The new labour law reaches well beyond tax:
- Payment: at least monthly for monthly-paid staff, in cash or by bank transfer, with a written payslip.
- Annual increment: at least 3% of the insurable wage, due one year after hire or after the last increment. The National Wages Council can exempt or reduce it in hardship cases.
- Minimum wage: EGP 7,000 gross a month in the private sector since 1 March 2025, reviewed at least yearly.
- Overtime: hourly wage +35% by day, +70% at night; rest-day work at double pay plus a substitute rest day.
- Deduction caps: employer-loan repayments up to 10% of the wage and interest-free; other debts up to 25% (50% for alimony), after tax and social insurance; disciplinary deductions up to 5 days per violation and 5 days a month. See our guide to employee loan management.
- Final settlement: all dues within 7 working days of termination.
How to run a clean monthly payroll
- Lock attendance: review lateness, absence, overtime and flagged punches, then lock the period.
- Collect approved inputs only: unpaid leave, approved bonuses and penalties, due loan instalments, joiners and leavers with proration.
- Calculate the draft against the active rule pack.
- Review anomalies before approval: large net-pay swings versus last month, negative nets, overtime spikes, missing bank details.
- Approve: no recalculation after approval. Corrections go through a documented off-cycle run.
- Generate payment files: bank file, or WPS file in KSA and the UAE.
- Publish payslips in the employee app and as PDFs.
- Prepare statutory reports: social insurance, tax and journal entries.
- Lock the period.
Saudi Arabia and the Gulf: GOSI, Mudad and Qiwa
GOSI contributions 2026
| Category | Employee | Employer |
|---|---|---|
| Saudi, registered before 3 July 2024 | 9.75% | 11.75% |
| Saudi, registered from 3 July 2024 (1 Jul 2026 – 30 Jun 2027) | 10.75% | 12.75% |
| Non-Saudi | 0% | 2% (occupational hazards) |
The base is basic + housing allowance, capped at SAR 45,000 a month. For new registrants, the annuity rate rises 0.5 points per side every July until it reaches 11% each in 2028. Source: GOSI contributions guide.
Example: a newly registered Saudi employee has basic pay of SAR 10,000 and housing of SAR 2,500, so the base is SAR 12,500. The employee pays SAR 1,343.75 and the employer pays SAR 1,593.75.
WPS through Mudad, contracts on Qiwa
- Mudad is the main channel for creating and uploading payroll files under MHRSD's Wage Protection System.
- WPS compares the bank-paid wage with the Qiwa contract wage and the GOSI contributory wage. Any mismatch gets flagged.
- Update raises on Qiwa before the payroll run; the WPS file splits basic, housing, other earnings and deductions per employee.
- Under the Saudi Labor Law, total deductions may not exceed half of the wage due, and employer-loan repayments are capped at 10% of the wage.
Saudi end-of-service benefit
Half a month's wage per year for the first five years, then a full month per year. Resignation reduces it (nothing under 2 years, one third at 2–5, two thirds at 5–10). Example: SAR 12,000 over 7 years = SAR 54,000, or SAR 36,000 on resignation.
Spreadsheet payroll vs. payroll software
| Criterion | Excel | Integrated payroll software |
|---|---|---|
| Tax and SI updates | Manual, often missed | Effective-dated rule packs, updated centrally |
| Bonus months | Over-taxed by "× 12" | Configurable cumulative method |
| Overtime source | Copy-paste from device report | Locked attendance period |
| Loans | Instalments from memory | Schedule deducted automatically |
| Pre-payment review | None | Anomaly check before approval |
| Payslips | Manual PDFs or none | Bilingual payslips in the employee app |
| Bank and WPS files | Built by hand monthly | Ready templates, Mudad and SIF |
| Audit | Who edited that cell? | Full snapshot per payslip with rule version |
Buyer's checklist
- Current Egyptian rule packs: Law 7/2024 tax including bracket withdrawal, 2026 social insurance, Martyrs Fund
- January insurable-wage logic and effective-dated limits
- Social insurance reports and Forms 1, 2 and 6
- Saudi pack with both GOSI tracks and a Mudad WPS file
- A run lifecycle: draft, review, approve, pay, lock
- Direct links to attendance, leave, loans and approved penalties only
- Bank files for the banks you use
- Arabic and English payslips in an employee app
- Cost reports by department and branch, plus journal export
- Fine-grained permissions on salary data and an audit log
How BashKatib helps with payroll
BashKatib payroll is built for Egypt first, then Saudi Arabia and the UAE:
- Effective-dated rule packs: Law 7/2024 tax with the EGP 20,000 exemption, high-income bracket withdrawal and an annualised or cumulative method; 11% / 18.75% social insurance with 2026 limits and January-wage logic; Forms 1, 2 and 6 support; the 0.05% Martyrs Fund. For KSA, GOSI on both tracks with SANED, hazards and the SAR 45,000 cap. For the UAE, GPSSA for nationals.
- A clear run lifecycle: draft → calculated → in review → approved → paid → locked, with a full snapshot of inputs and rule version on every payslip.
- Trusted inputs: locked periods from time and attendance, unpaid leave, approved bonuses and penalties only, loan schedules, and proration for joiners and leavers on a 26-day, 30-day or calendar basis.
- Pre-approval anomaly check: large net changes, new or removed employees, overtime spikes, negative nets and missing bank details.
- Ready outputs: bilingual payslips in the employee app and as PDFs, the payroll register, CIB/NBE/Banque Misr/QNB bank templates plus generic CSV, the Mudad WPS file, the UAE SIF, social insurance and tax reports, and journal export as CSV. Direct accounting integrations are coming soon.
- End of service: last salary, leave encashment, KSA/UAE EOSB, deduction of outstanding loans and unreturned assets, and a printable settlement statement.
- Cost reports by department and branch in the reports centre.
Hear payroll status in the AI voice briefing
The AI voice daily briefing gives owners a short spoken summary in Egyptian or Gulf Arabic, MSA or English, including payroll status near month end. Salary amounts are never read out unless you enable it, and every number is computed from real data.
Payroll, statutory files and the owner's voice briefing start on the Growth plan: EGP 45 or SAR 14 per employee per month, billed annually, at the time of writing. See pricing and our overview of HR software in Egypt. If you employ hourly staff, read our guide to hourly employee management.
Frequently asked questions
How is salary income tax calculated in Egypt?
Deduct the employee's social insurance share from taxable pay, multiply by 12, subtract the EGP 20,000 personal exemption, apply the annual brackets (0% up to 40,000, then 10%, 15%, 20%, 22.5%, 25% and 27.5%), and divide by 12 for the monthly withholding, with a year-end settlement.
What are Egypt's social insurance rates in 2026?
Employees pay 11% and employers 18.75% of the insurable wage. In 2026 the insurable wage is capped between EGP 2,700 and EGP 16,700 a month, based on the January wage and fixed for the year.
Which NOSI forms does payroll need to handle?
Form 1 registers an employee at hire, Form 2 covers establishment registration and the annual January wage statement, and Form 6 notifies termination within one week.
What are GOSI contribution rates in Saudi Arabia?
Saudis registered before 3 July 2024 pay 9.75% (employer 11.75%). Those registered later pay 10.75% (employer 12.75%) from 1 July 2026 to 30 June 2027. For expatriates the employer pays 2% only. The base is basic plus housing, capped at SAR 45,000.
What is the Mudad WPS file?
Mudad is the platform used to create and upload payroll files under Saudi Arabia's Wage Protection System. WPS checks bank-paid wages against the Qiwa contract wage and the GOSI wage.
Can payroll software generate bank transfer files?
Yes. BashKatib produces bank files using CIB, NBE, Banque Misr and QNB templates plus a generic CSV, the Mudad WPS file for Saudi Arabia and the SIF file for the UAE.
How much of a salary can be deducted for an employer loan in Egypt?
Labour Law 14/2025 caps employer-loan repayments at 10% of the wage, interest-free. Other debt deductions are capped at 25% (50% for alimony).
Run a parallel payroll before you decide
The best test of payroll software is a full month run alongside your current process. The BashKatib trial gives you 14 days on Pro, extendable to 30 days for exactly that.
Create your account or book a demo and we'll review your pay structure and allowances with you.
Try BashKatib with your company data
Create a free account and run attendance, leave and a test payroll within 14 days, no credit card required.
Frequently asked questions
How is salary income tax calculated in Egypt?
What are Egypt's social insurance rates in 2026?
Which NOSI forms does payroll need to handle?
What are GOSI contribution rates in Saudi Arabia?
What is the Mudad WPS file?
Can payroll software generate bank transfer files?
How much of a salary can be deducted for an employer loan in Egypt?
Sources and references
Author
BashKatib TeamThe BashKatib product and content team, writing practical guides on attendance, payroll, leave and labour law with official sources.
