Insurance Law No. 79 of the year 1975
The Egyptian social insurance system is divided into a number of schemes, each one covering a different type of worker. Regulating these schemes are four corresponding laws, namely Law 79 of 1975, Law 108 of 1976, Law 50 of 1978 and Law 112 of 1980. These laws provide coverage for public and private sector wageworkers, employers and the self-employed, Egyptians working abroad and irregular or “unorganized” workers, respectively. For the purposes of this brochure, we will be focusing on Law 79 of 1975, and will provide an overview of the other laws when appropriate.
Law 79 of 1975 outlines the general scheme for the social insurance system, insuring all government, public sector and formal private sector employees. The law makes social insurance coverage mandatory for each and every worker who is 18 years old or more in the public and formal private sectors; and whose age is 16 or more in the government. The law makes employers responsible for enrolling their employees in the system. Employees’ contributions are deducted from two types of monthly wage earnings: the base wage and the variable wage, and the social insurance premium payments are divided between the employer and the employee as follows:
- Employer pays 26% of the basic salary and 24% of the variable salary.
- Employee pays 14% of the basic salary and 11% of the variable salary.
The current maximum amount for contributions is as follows:
- Basic salary: EGP 1,012.5
- Variable salary: EGP 1,590
In this context, a basic salary means the amount paid to an employee before any other amounts are added or deducted, whereas the variable salary is the remuneration he receives as a result of his performance at work.
With respect to foreign employees, it should be noted that according to the Social Insurance Law, foreign employees, with the exception of certain Arab nationalities, are not subject to the Social Insurance Law and are not required to pay social insurance contributions unless there is reciprocal duty under a Double Social Insurance Treaty in the employee’s national country. In such cases, the social insurance contributions will be based on the terms of that Treaty and not Egyptian national law. Nonetheless, even if the foreign employee is not subject to the Social Insurance Law, the employer must still pay 3% of the employee’s salary that is subject to insurance to cover the state medical insurance for work related injuries.