The insurable wage in Egypt: basic pay, allowances and the 30% practice

The insurable wage (أجر الاشتراك) is the amount social insurance contributions are calculated on. Under Law 148/2019 it is the full cash pay an employee receives from their main employer for their main job, including the basic wage and variable components such as commissions and incentives, minus a short list of excluded allowances, and capped between EGP 2,700 and EGP 16,700 a month in 2026. Many Egyptian companies still split pay into "basic + 30% allowances" and insure only the basic; that is a practice, not what the law says.

How the law defines it

Before 2020 Egypt had two insured wages: a basic wage and a variable wage, each with its own ceiling. Law 148/2019 merged them. Article 1 defines the contribution wage as all the cash consideration the insured person receives from their original employer for their original work. The law and its executive regulations then list the elements that count, which include:

• the basic (or job) wage;
• complementary wage and periodic increases, including special increases not yet merged into basic pay;
• incentives and production bonuses;
• commissions;
• tips (service charge), where there are agreed rules for distributing them;
• the Egyptian-pound value of pay in foreign currency.

What is excluded is narrower. The law carries over Prime Minister's Decree 679/1984, which lists allowances paid to cover a cost the employee actually bears, such as transport, travel and session-attendance allowances, and allowances for living abroad. Advisers commonly add housing, clothing and car allowances to the excluded list on the same basis. Overtime pay is treated differently by different sources; see the review notes and ask NOSI if it is material for you.

The limits cap the result

Whatever the elements add up to, the insurable wage is then held within NOSI's limits:

2026	Amount
Minimum insurable wage	EGP 2,700
Maximum insurable wage	EGP 16,700
Employee share (11%) at the maximum	EGP 1,837
Employer share (18.75%) at the maximum	EGP 3,131.25

In the private sector, contributions for the whole calendar year are generally calculated on the January wage. An employee hired later in the year is insured on the wage of the month they joined until the next January. Raises during the year therefore show up in the insurable wage the following January, when the employer files the annual wage update.

The "basic + 30% allowances" practice

Many Egyptian HR systems and offer letters split a salary into a basic wage and allowances equal to 30% of basic (housing, transport, meals and so on). Gross = basic × 1.30, so basic = gross ÷ 1.30. The company then insures the basic wage only.

The practice dates from the old law, when allowances were partly outside the basic insured wage, and it survives because it lowers the employer's 18.75% and the employee's 11% while the ceiling was low. Two things changed:

1. The definition. Law 148/2019 insures all cash pay for the job, less the cost-type allowances above. A flat 30% labelled "allowances" with no cost behind it is, on the law's wording, part of the insurable wage.
2. The ceiling. With the maximum at EGP 16,700, the saving from excluding allowances disappears for anyone whose basic alone already exceeds the cap.

SalaryEG's calculator offers both methods: the default insures the full gross; the "allowances" option strips an allowance percentage out and insures the basic wage, the way many payroll systems do, so you can see the gap.

Worked example: EGP 19,500 gross

Try it in the calculator

The risks of under-insuring

• Back contributions. If NOSI's inspectors or a complaint establish that the real wage was higher, the employer owes the difference for the whole period, for both shares, plus the late-payment addition under Article 121 (average treasury-bill rate plus 2%).
• Fines. Article 168 of Law 148/2019 sets a fine of EGP 20,000 to 100,000 on the person responsible for management for failing to insure an employee or insuring them for untrue periods or wages, doubled on repeat.
• Benefits. A lower insured wage means a lower pension, a lower work-injury or sickness payment and a lower unemployment benefit for the employee. Disputes often surface when an employee leaves or is injured and discovers the gap.
• Labour-law minimums. The private-sector minimum wage of EGP 7,000 applies to pay, and the minimum annual raise (3% of the insurance wage) is itself measured on the insured wage.

Common mistakes

• Insuring a round figure (for example EGP 3,000) unrelated to the payslip.
• Insuring the basic wage but paying commissions and incentives that are not reflected in the January wage declaration.
• Forgetting that a salary partly paid in foreign currency is insurable at its pound value.
• Treating the EGP 16,700 ceiling as an exemption: pay above the ceiling is simply not insured, but everything up to it must be.

FAQ

Are bonuses insurable?

Regular incentives and production bonuses paid for the job are part of the insurable wage. A one-off discretionary gift is usually treated as outside it, but the authority looks at substance, so document the basis.

Is the employee's insurable wage the same as the taxable salary?

No. The taxable salary for salary tax is the gross cash and benefits in kind less exempt items; the insurable wage is cash pay for the main job within the NOSI limits. The two are calculated separately and the employee's insurance contribution is then deducted from taxable income.

Can the employer and employee agree to insure a lower wage?

No. The insurable wage is set by the law, and Article 168 makes insuring untrue wages an offence regardless of any agreement.

Is the 30% allowance figure in any law?

No. It is a market convention. Nothing in Law 148/2019 or the Labour Law fixes allowances at 30% of basic.

Sources

• Law 148/2019 on Social Insurance and Pensions, Article 1 (definitions) and Articles 121 and 168; full text at ar.wikisource.org.
• Prime Minister's Decree 2437/2021 issuing the executive regulations of Law 148/2019.
• Prime Minister's Decree 679/1984 on allowances excluded from the insurable wage (referred to in Law 148/2019).
• Youm7, "16 elements included in the contribution wage" (5 October 2020): youm7.com.
• NOSI announcement of the 2026 wage limits, reported by Zawya.
• Al-Watan, "What is the penalty for not insuring employees?": elwatannews.com.