Learn about mandatory and optional employee benefits in Egypt
In Egypt, the law mandates a comprehensive package of benefits for all employees who meet the eligibility criteria. These benefits are designed to provide social security and financial protection throughout employment.
Egypt's social security system is a cornerstone of mandatory employee benefits. The Egyptian Social Security Organization (EOSSO) administers these benefits, funded through contributions from both employers and employees.
Egyptian labor law guarantees employees various types of paid leave to ensure rest and recuperation:
In Egypt, many employers go beyond the mandatory benefits and offer optional perks to attract and retain top talent. These benefits can be categorized into financial benefits, health and wellness benefits, work-life balance benefits, and other benefits.
In Egypt, health insurance for employees is a mandatory benefit under Social Insurance Law No. 79 of 1975. This law establishes the Social Insurance Organization (SIO) which provides a baseline level of health coverage for employees.
Employers in Egypt are required to deduct and pay 4% of the employee's monthly salary towards social insurance, with a minimum contribution of EGP 50. These contributions go towards covering the employee's sickness, treatment, and work injuries.
Employees, on the other hand, contribute 1% of their monthly salary towards social insurance. This contribution is also mandatory and is deducted directly from the employee's salary.
In Egypt, employees have access to a variety of retirement planning options, including public and private plans, to secure their financial future.
Egypt's public pension scheme is managed by the National Organisation for Social Insurance (NOSI). It offers both contributory and non-contributory benefits:
Contributory Scheme: This scheme is available to all residents aged 65 and above who have a history of contributions. Both employers and employees contribute a portion of the salary. The benefits are attractive, with retirees receiving a monthly pension equal to 75-88% of their last net salary before retirement, based on contribution length.
Non-Contributory Scheme: This scheme provides support to low-income Egyptians aged 65 and above who haven't contributed to the social security system. They receive a monthly payment equivalent to 18% of the national salary after tax.
Many companies in Egypt offer pension plans as part of their employee benefits package. These plans can be structured in two ways:
Defined Benefit Plans: Under this plan, the employer pre-determines the retirement benefit amount, typically a percentage of the employee's final salary based on years of service.
Defined Contribution Plans: In this plan, both the employer and employee contribute a fixed amount towards the employee's retirement savings account. The final retirement benefit depends on the amount contributed and the investment returns generated.
Egypt offers Individual Retirement Accounts (IRAs) for individuals to manage their retirement savings independently. There are two main IRA types:
Traditional IRA: Contributions to a traditional IRA may be tax-deductible, reducing your current taxable income. However, withdrawals during retirement are taxed as ordinary income.
Roth IRA: Contributions to a Roth IRA are made with after-tax dollars, but qualified withdrawals during retirement are typically tax-free.
Financial institutions in Egypt offer various private retirement plans to help individuals save and invest for their golden years. These plans often combine elements of savings and life insurance, providing a guaranteed payout upon retirement or death benefit for beneficiaries.
Long-Term Savings & Protection Plans: These plans allow for regular contributions and offer potential returns through investment alongside a life insurance benefit.
Unit-Linked Life Insurance Plans: These plans link your investment to life insurance coverage. The value of your retirement benefit grows based on the performance of the underlying investment units.
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