Changes to Egyptian social security for expatriates

    Mar 22, 2022 @ 07:30 PM / by Pat Jurgens

    807.Cairo

    In the past, only Egyptian nationals were required to contribute to Social Insurance and Pension schemes in Egypt. Non-Egyptian employees were exempt from mandatory participation.

    Changes to Social Security

    In 2021, Egyptian authorities enacted a change that expanded the scope of participation to also include foreign nationals in the social security scheme. The Egyptian Prime Minister issued Decree # 2437 in September approving regulations making this expanded scope effective as of September 29, 2021. With this change, all foreign national employees working in Egypt (with limited exceptions below) are now required to participate in the Egyptian Social Security scheme. Compulsory contributions from both the employer and employee will now be required. Currently, the contribution rates for 2022 in Egypt for employees is 11.5% capped at EGP 12,408, and for employers is 18.75% capped at EGP 21,150.

    Totalization Agreement

    Foreign national employees can avoid contributing to Egyptian social security if they contribute to social security in their home country and hold an approved certificate of coverage from one of the five countries that has a social security treaty in force (known as a totalization agreement) with Egypt. The countries that have an in-force totalization agreement with Egypt are Cyprus, France, Greece, Morocco, and the Netherlands.

    Tax Planning

    We encourage you to review your social security arrangements for employees inbound to Egypt to ensure you are meeting the new social security compliance requirements and updating your cost accruals for these additional costs which could be up to EGP 33,558 per year. Consider any tax planning opportunities if certificates of coverage can still be obtained to avoid these costs.

    Contact Us

    More for you:

    Saying Yes to Flex – A Case Study of US Domestic Relocation

    What are the predictions for the upcoming year from global mobility leaders?

     

    Topics: Global Mobility, Mobility trends, Tax, Egypt, International Tax Guide, Long-Term Assignment, Tax Equalization, Expatriates

    Pat Jurgens

    Written by Pat Jurgens

    Director, Global Tax Research and Consulting Pat joined AIRINC in 2006, and directs AIRINC’s research and statistical analyses of international tax policies and supervises the production of our hypothetical personal income tax products. He is responsible for the international income tax guide and tax calculator products at AIRINC and consults with clients on tax equalization policy matters. Pat has 32 years of experience in the area of expatriate taxation and global mobility consulting. Prior to joining AIRINC, he spent 18 years with PricewaterhouseCoopers’ International Assignment Services practice, providing tax compliance and consulting services to multinational companies and their assignee employees. He received his B.S. in Business Administration (Accounting) from the University of Colorado. Pat is a Certified Public Accountant and a member of the AICPA and MSCPA societies.