The Social Security System and Public Health Insurance
Social security is a public program designed to protect individuals and their families from income losses due to unemployment, old age, sickness, or death and to improve their welfare through public services (e.g. Medical Care).
For Egyptian employees, who must constitute a significant part of a company's workforce, there is a social security system under which the employer pays contributions equivalent to approximately one-fourth of the salary earned, up to a certain limit of salary.
Contributions in the private sector under social security regulations are levied only on Egyptian nationals who are in full-time employment. Contributions are required at the following rates:
On the monthly basic salary up to LE 650, at 26% and 14% for employer and employee, respectively; and on any amount in excess of the basic salary (LE 650), or other allowances or overtime, up to LE500 monthly, at 24% and 11% for employer and employee, respectively.
For seasonal and temporary workers employed by construction contractors, a different system applies, Social Security contributions by the contractor amount to 18% of the percentage that labor costs bear to total contract costs. This levy may significantly increase labor costs on projects.
Benefits provided under the social security scheme are pensions, disability payments,
sickness payments, maternity and death allowances, and unemployment insurance. These benefits are not given to non-Egyptians.
All private sector companies in Egypt are required to provide free health care for their Egyptian employees either through the Medical Insurance Plan of the Ministry of Social Insurance or privately. They are also required to contribute to the Pension Insurance Fund of the Ministry of Social Affairs and Insurance.
Other Benefits
1. Annual Increment
Employees are entitled to a periodical annual increment of not be less than (7%) of the basic salary on which the social insurance subscriptions are calculated. Thus until the National Council for Wages issues the decisions regulating the payment of that increment.
2. Overtime Pay
The minimum overtime premiums are 35 per/cent of normal pay for overtime worked during daylight, 70 per/cent for that worked at night, and 100 per/cent on rest days and 200 percent on official holidays. Production incentive bonuses are tax-free.
3. Minimum Wage
Not yet determined by the National Council for Wages.
4. Profit Sharing
Employees of a Joint Stock Company, Limited Liability Company, or Foreign Branch are entitled to a share in the distributable profits. The share is fixed at an amount not less than 10% of distributable profits and not more than the total annual salaries of the employees. However, Limited Liability Companies with capital less than LE 250,000 are not subject to this distribution of profit share.
5. Bonuses
There is no obligation to pay annual bonuses.
|
