What is the income tax rate in Egypt and what brackets apply?

Whether you are an employee, a freelancer, or an investor in Egypt, the first question that comes to mind is: exactly how much income tax do you owe in Egypt? The answer is not a single figure but a progressive bracket system that depends on your total annual income and its nature.

Quick Answer

Personal income tax in Egypt is progressive, starting at 0% on income up to EGP 40,000 per year and reaching 27.5% on income exceeding EGP 1,200,000 per year, in accordance with the latest amendments to Income Tax Law No. 91 of 2005, as amended by Law No. 175 of 2023 and Law No. 7 of 2024. A personal allowance of EGP 20,000 per year is granted to every taxpayer. For companies, the standard rate is 22.5% of net profit.

Personal Income Tax Brackets

The brackets currently applied to an Egyptian taxpayer's annual income, after deducting the personal allowance of EGP 20,000, are as follows:

• Up to EGP 40,000: 0%
• EGP 40,001 to EGP 55,000: 10%
• EGP 55,001 to EGP 70,000: 15%
• EGP 70,001 to EGP 200,000: 20%
• EGP 200,001 to EGP 400,000: 22.5%
• EGP 400,001 to EGP 1,200,000: 25%
• Above EGP 1,200,000: 27.5%

The top bracket (27.5%) was introduced by Law No. 175 of 2023 and targets high-income earners.

Note: The brackets are not applied as a flat rate. If your income is EGP 500,000, you do not pay 25% on the entire amount; each bracket is calculated separately and the results are added together. This is a common mistake people make when estimating their actual income tax liability in Egypt.

Who Is Exempt and When Does Tax Become Due?

The current personal allowance is EGP 20,000 per year, meaning the first EGP 20,000 of your income does not enter the tax base at all. Combined with the zero-rate bracket up to EGP 40,000, the first EGP 60,000 of an employee's income is effectively free of tax.

Additional exemptions are provided under Article 13 of the Income Tax Law, including:

• Government pensions and social insurance pensions
• Compensation for work-related injuries
• An employee's share of company profits (within prescribed limits)
• Representation and travel allowances within the applicable conditions

Employees do not generally need to file a tax return, as the employer withholds tax at source monthly and remits it to the Egyptian Tax Authority. Freelancers and individuals engaged in commercial or industrial activities must file an annual return before 31 March of the year following the tax year.

Corporate and Business Income Tax

Companies in Egypt are subject to a flat rate of 22.5% on net profit, with exceptions for petroleum and gas companies (40.55%) and certain Suez Canal companies and the Central Bank of Egypt.

Freelancers (doctors, lawyers, engineers, accountants) and sole traders are subject to the same progressive personal brackets described above, not the corporate rate.

A simplified tax regime for small and medium enterprises is available under Law No. 152 of 2020, applying reduced rates on gross revenue (not profit) ranging from 0.5% to 1% depending on the size of the entity, for those whose annual turnover does not exceed EGP 15,000,000.

Practical note: If your business is new and you are considering registration, the simplified regime is generally less costly and easier to administer. Review its details on the Egyptian Tax Authority website before choosing a regime.

Quick Calculation Examples

Employee with annual income of EGP 120,000:

• Personal allowance: EGP 20,000
• Taxable base: EGP 100,000
• First EGP 40,000 × 0% = EGP 0
• EGP 40,001 to EGP 55,000 (EGP 15,000) × 10% = EGP 1,500
• EGP 55,001 to EGP 70,000 (EGP 15,000) × 15% = EGP 2,250
• EGP 70,001 to EGP 100,000 (EGP 30,000) × 20% = EGP 6,000
• Total annual tax: EGP 9,750 (approximately EGP 813 per month)

Freelancer with net profit of EGP 600,000:

• After the personal allowance, the taxable base is EGP 580,000
• Calculated across the brackets up to the 25% band
• Approximate total: around EGP 103,500 per year

The effective rate always differs from the marginal rate. Many people assume they are paying 25% when their actual effective rate is 17% or 18%.