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Egypt's Emergency Fund 1% and Martyrs' Fund 0.05%: who pays and how
The employer's 1% Emergency Fund contribution (Law 156/2002) and the 0.05% Martyrs' and Victims' Fund deduction from employees (Law 16/2018): base, payer, deadline.
Last reviewed: 30 Oct 2026 · Laws covered: Law 156/2002 (Emergency Relief Fund for Workers) · Prime Minister's Decree 1395/2002 (executive regulations) · Law 16/2018 (Martyrs' and Victims' Fund) · Law 4/2021
Two small payroll levies sit beside social insurance in Egypt. The Emergency Fund contribution is 1% of the insured wage, paid by the employer under Law 156/2002, and it finances wage support for employees whose establishment closes or downsizes. The Martyrs' and Victims' Fund contribution is 0.05% (five per ten thousand) of the employee's monthly pay, deducted from the employee under Law 16/2018 as amended by Law 4/2021, and remitted through the Ministry of Finance to the fund that supports the families of those killed or injured in military, terrorist and security operations. Neither is part of the 11% and 18.75% social insurance rates.
The Emergency Fund (Law 156/2002)
What it is for
The Emergency Relief Fund for Workers (صندوق إعانات الطوارئ للعمال) was set up by Law 156/2002 under the Ministry of Labour. It pays a monthly allowance to insured employees whose wages stop because their employer has closed fully or partly, or cut its insured workforce, for economic reasons beyond the employees' control. Under the current rules the allowance is 100% of the employee's insured basic wage, with a floor of EGP 1,500 a month, for a limited period while the establishment recovers or the employee finds other work. The fund has paid out more than EGP 2 billion to several hundred thousand workers since it began.
Who pays and on what
Article 3 of Law 156/2002 funds it with 1% of the basic wages of employees in public-sector, public-business-sector and private-sector establishments that employ thirty or more workers. The contribution is borne by the establishment, not deducted from employees.
| Rule under Law 156/2002 | |
|---|---|
| Rate | 1% |
| Base | The employees' insured basic wages (in practice the insurable wage under Law 148/2019, within the 2026 limits of EGP 2,700–16,700) |
| Payer | The employer |
| Scope | Establishments with 30 or more employees |
| Collected by | The fund itself (Ministry of Labour) |
| When | During the first half of each month for the previous month, by cheque or transfer in the fund's name, with a statement of the number of insured employees and their total basic wages (Article 8 of the executive regulations) |
Payroll systems, including SalaryEG, generally apply the 1% to the insurable wage of every insured employee, because the law's old "basic wage" no longer exists under Law 148/2019 and because most employers do not track the thirty-worker threshold month by month. If your company has fewer than thirty employees, check with the fund or the local labour office whether you are inside its scope before paying.
Some payroll providers describe the 1% as paid "to NOSI together with the social insurance". The law and its regulations say the establishment pays the fund directly. If your NOSI office collects it on the fund's behalf, keep the receipt; either way the amount is the same.
The Martyrs' and Victims' Fund (Law 16/2018)
What it is for
Law 16/2018 created the Fund for Honouring the Martyrs, Victims, Missing and Injured of Military, Terrorist and Security Operations and their Families (صندوق تكريم شهداء وضحايا ومفقودي ومصابي العمليات الحربية والإرهابية والأمنية وأسرهم). It reports to the Prime Minister and pays compensation, pensions and support to those families.
The payroll contribution
Law 4/2021, in force from 3 March 2021, added a payroll source of income. Each month, five per ten thousand (0.05%) of the salary is deducted from employees of state bodies, public-sector and public-business-sector companies and special funds, and from employees of private-sector legal persons subject to the Labour Law. Irregular and daily-paid labour is excluded.
| Rule under Law 16/2018 as amended | |
|---|---|
| Rate | 0.05% (EGP 0.50 per EGP 1,000) |
| Base | The monthly salary; most payroll providers apply it to gross pay, which is what SalaryEG does |
| Payer | The employee; the employer deducts it before paying the salary |
| Collected by | The Ministry of Finance, which remits it to the fund's account; electronic payment is allowed |
| When | Tax Authority instructions call for remittance by the 10th of the month following the deduction |
There is no ceiling: an employee on EGP 50,000 a month pays EGP 25.
The law says "salary" without defining it. Most employers and payroll providers use gross pay; at least one HR-software vendor uses basic pay plus taxable allowances. The difference is small (a few pounds), but ask your accountant which base your company applies and use it consistently.
A new draft law reorganising the fund was published for discussion in October 2026. Until it is enacted, Law 16/2018 as amended by Law 4/2021 applies.
Worked example: EGP 25,000 gross
Employee on EGP 25,000 a month, fully insured. The insurable wage is capped at EGP 16,700 in 2026.
- Employee social insurance: 16,700 × 11% = EGP 1,837
- Employer social insurance: 16,700 × 18.75% = EGP 3,131.25
- Emergency Fund (employer): 16,700 × 1% = EGP 167
- Martyrs' Fund (employee, on gross): 25,000 × 0.05% = EGP 12.50
- Salary tax: EGP 3,565.73 a month
- Net pay: 25,000 − 1,837 − 12.50 − 3,565.73 = EGP 19,584.77
- Employer cost: 25,000 + 3,131.25 + 167 = EGP 28,298.25
Note the two different bases: the Emergency Fund follows the capped insurable wage, the Martyrs' Fund follows the uncapped gross.
Common mistakes
- Deducting the Emergency Fund 1% from the employee. It is an employer cost. Charging it to employees is the kind of unlawful cost-shifting Law 148/2019 penalises for insurance, and the fund's own law places it on the establishment.
- Applying the 0.05% to the insurable wage. The Martyrs' Fund is a percentage of salary, with no NOSI cap. On high salaries the two bases diverge.
- Paying the Martyrs' Fund to NOSI. It goes through the Ministry of Finance (in practice via the Tax Authority's payment channels), not the insurance office.
- Treating either levy as tax-deductible for the employee. Only the employee's social insurance contribution is deducted before salary tax; the 0.05% is not.
- Forgetting the Emergency Fund when quoting employer cost. Total employer on-cost on the insurable wage is 19.75% (18.75% + 1%), not 18.75%.
FAQ
Does the Emergency Fund apply to a company with 10 employees?
Law 156/2002 limits the contribution to establishments with thirty or more workers. Many smaller companies still pay it, either because their payroll system applies it automatically or because the local office asks for it. Confirm your position with the fund before deciding either way, and record the answer.
Can an employee claim from the Emergency Fund?
Only through the employer's situation: the fund steps in when an establishment that was paying contributions stops paying wages because of closure or downsizing. Claims are made through the Ministry of Labour's directorates, not by individual application for other reasons.
Is the Martyrs' Fund 0.05% shown on the payslip?
Yes, as a separate deduction line. It is small (EGP 5 on a EGP 10,000 salary) but it must appear so that the employee can see what was withheld and why.
Are foreign employees subject to the Martyrs' Fund deduction?
The law covers employees of private legal persons subject to the Labour Law without distinguishing by nationality. Most employers deduct it from everyone on the payroll except daily-paid and irregular labour.
Sources
- Law 156/2002 establishing the Emergency Relief Fund for Workers, Article 3; text at lawyeregypt.net.
- Prime Minister's Decree 1395/2002 (executive regulations of Law 156/2002, as amended by Decrees 1580/2010 and 1806/2016), Article 8; text at hrdiscussion.com.
- Youm7, "The resources of the Emergency Relief Fund for Workers under the law" (6 August 2024): youm7.com.
- Law 16/2018 establishing the Martyrs' and Victims' Fund, as amended by Law 4/2021 (Official Gazette, issue 8 bis (e), 3 March 2021); amendment text at manshurat.org.
- Youm7, "Text of the assignment of the Ministry of Finance to collect the fund's dues" (21 February 2021): youm7.com.
- Cairo24, "The Tax Authority explains the collection mechanism for the Martyrs' Fund" (remittance by the 10th of the following month): cairo24.com.
- PwC Worldwide Tax Summaries, Egypt, Other taxes (0.05% of gross salary): taxsummaries.pwc.com.
- Andersen Egypt, Tax Alert 121 on Law 4/2021: mondaq.com.
General information, not legal or tax advice. Rules change; check the official sources and your adviser for your situation.