A new Presidential Decree (Law no # 42) is applicable for the year 2014. This is a special monthly increase whereby 10% of basic salary is exempt from tax effective July 1st 2014. In theory, this applies to all employees, regardless of when they were hired.
It is a must for all public sector companies but optional for private sector companies. In practice it is customary that this is granted to private sector employees.
Our Egypt Payroll and Employment Services Partners will apply this to all employees’ salary calculations, effective July 1st 2014 unless there are special circumstances.
The following details of the Decree and Law are issued in translation by the Middle East Library for Economic Services http://www.egyptlaws.com
Official Journal – Issue No. 22 (Bis – A) – Dated 1 June 2014
Presidential Decree-law No. 42 of the year 2014
On Granting A Special Raise To The State Civil Servants
Interim President of the Republic,
After reviewing the amended Constitution issued on the eighteenth of January, 2014;
Law on the State Civil Servants System promulgated by Law No. 47 of the year 1978,
Law on Public Sector Companies promulgated by Law No. 97 of the year 1983,
Law on Public Business Sector Companies promulgated by Law No. 203 of the year 1991, and
And after getting the approval of the Cabinet of Ministers,
DECREED THE FOLLOWING LAW:
Article : 1
A special monthly raise shall be granted as of the First of July 2014 to the State civil servants at the rate of (10%) of their basic salary on 30 June 2014 or on the date of appointment with regard to those appointed after that date, without minimum or maximum limits. This raise shall not be considered as a part of the basic salary of the civil servant.
The Minister of Finance shall issue the decrees required for the enforcement of the provisions of this special raise.
Article : 2
In applying the provisions of the present law, the State civil servants shall mean those employed inside the Arab Republic of Egypt, as permanent and temporary workers with comprehensive remunerations, in the State administrative machinery, or in the local administrative units, the public authorities, the public legal persons, the public sector companies, or the public business sector companies, and the State civil servants whose employment affairs are regulated by special laws or regulations as well as those holding public positions and those appointed with fixed salaries.
Article : 3
The special raise prescribed by the present law, and the increase determined effective from the First of July 2014 in the pension payable to the civil servant for himself shall not be combined, subject to the following:
1- If the age of the civil servant is less than the prescribed retirement age, the special raise shall be payable thereto, and if this raise is less than the increase in the pension, the pension shall be increased by the difference between them.
2- If the civil servant attains the prescribed retirement age, the increase in the pension shall be payable thereto, and if this increase is less than the special raise, the difference between them shall be paid to the worker by the entity employing him.
Article : 4
The present law shall be published in the Official Journal, and shall be enforced as of the First of July 2014.
Issued at the Presidency of the Republic on the 3rd of Shaban, 1435 (Islamic Calendar), corresponding to the 1st of June, 2014 (Gregorian Calendar).