Egypt – Coronavirus Tax Calculations Clarified.
Mercans, a leading Egypt payroll outsourcing, PEO/GEO, employee leasing, recruitment and BPO services provider, has published Egypt payroll outsourcing alert. Subscribe to Mercans’ Egypt payroll outsourcing alerts to ensure that you are always up-to-date with the lasted regulatory changes in Egypt labor and payroll compliance requirements.
As previously communicated by Mercans in its Statutory Alert dated 4 July 2020, in order to alleviate the economic impact of COVID-19, effective from 1 August 2020, the government of Egypt introduced an additional tax of 1% that is applied to employees’ “net employment income”.
This additional contribution does not appy to employees and pensioners whose net income does not exceed EGP 2,000. All private and public sector employees are subject to the additional tax effective for 12 months from 1 August 2020.
The government of Egypt recently issued a clarification with respect to the definition of net employment income that is subject to the 1% COVID-19 contribution. In accordance to this clarification, the net income is defined as total gross employment income less all applicable stutory taxes and dues that toyically deducted from such employment income; including, income tax and social insurance contributions.
The government has clarified that “net income” does not include any non-statutory, discretionary and voluntary deductions; including, deductions related to employee loans, benefits and as well as any other mandatory but not income tax or social insurance related deductions; i.e. garnishments, fines, etc.
Mercans’ Egypt Payroll Outsourcing Solutions
While Mercans’ Egypt Payroll Outsourcing alerts will allow you to stay on top the latest development in Egypt’s payroll regulations, you should still get in touch with Mercans’ Egypt payroll outsourcing, compliance, PEO/GEO and BPO specialists for a free consultation on setting up fully compliant payroll and HR functions. Better yet, outsource your payroll and HR activities in Egypt to Mercans and our Egypt payroll outsourcing experts will ensure that your employees will always be paid on time and in accordance with the Egypt regulations.