Egyptian labor law, tax and insurance

Is there an end-of-service gratuity in Egypt's private sector?

By Mahmoud SaiedLast updated 27 October 20262 min read

The short answer

Egyptian labor law requires no general end-of-service gratuity as in the Gulf, because these rights come mainly through social insurance. Under Articles 36 and 37 of Social Insurance and Pensions Law No. 148 of 2019, the lump-sum benefit scheme is funded by 1% from the worker and 1% from the employer each month into a personal account, paid out when insurance benefits fall due.

Step by step

  1. 1

    Social insurance first

    Register the worker and pay contributions on the correct contribution wage, because the pension or one-time lump sum and the lump-sum scheme balance are all built on these contributions.

  2. 2

    Work after age sixty

    Under Article 172 a worker gets half a month's wage for each of the first five years of work after sixty and a month's wage for each year after that, if he has no old-age insurance rights for that period.

  3. 3

    Fixed-term contracts

    Article 154 provides an award of one month's wage per year of service where the termination is by the employer, so check how it applies to your fixed-term contracts.

  4. 4

    Balances and dues

    Unused annual leave is paid under Article 125, and all dues are paid within seven days of the worker's request under Article 108.

  5. 5

    Termination for economic reasons

    Where a contract is ended for economic reasons, Article 241 provides an award of one month's wage for each of the first five years of service and one and a half months for each year after that.

  6. 6

    What you agree

    If the company grants an award in the contract or regulations it is binding, and better terms continue under Article 6.

A common mistake

Mixing up the Gulf and Egyptian systems costs companies both ways: unwritten promises of an award, or missing the lump-sum scheme contribution in social insurance. Write your end-of-service policy clearly.

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