Egypt taxes personal income progressively. That means an employee does not pay one flat rate on their whole salary — each slice of income is taxed at the rate for its band. Get the bands right and net pay is correct; get them wrong and every payslip is off.
How progressive tax actually works
Think of annual income as water filling a series of buckets. The first bucket is tax-free. Once it fills, income spills into the next bucket, taxed at a low rate, then the next, and so on. Only the income that lands in a given bucket is taxed at that bucket’s rate.
This is why a raise never leaves someone worse off: only the portion above a threshold is taxed at the higher rate, never the whole salary.
The 2026 brackets at a glance
- A tax-free band covers the first slice of annual income.
- Several middle bands rise gradually — roughly 10%, 15% and 20%.
- Higher incomes reach the top marginal rates of 22.5–25%.
- Personal exemptions reduce taxable income before the brackets apply.
A worked example
Take an employee earning EGP 28,000 a month. Their income is annualised, the personal exemption is applied, and the remaining amount is split across the brackets. Each slice is taxed at its own rate, the results are summed, then divided back to a monthly figure. Add the employee’s social insurance share and you reach net pay.
Doing this once is fine. Doing it for 24 employees, every month, by hand, in a spreadsheet that someone edited last quarter — that is where mistakes creep in.
How to stop calculating by hand
The Five HR keeps the current brackets and exemptions built in. You enter each salary once; every monthly run applies the correct tax and social insurance automatically, generates payslips, and produces a bank-ready transfer file. When the tables change, your payroll changes with them — no formula to maintain.
- Correct tax on every payslip, automatically
- Social insurance calculated alongside it
- Payslips and bank files in one approval
- A full, auditable history of every run