Payroll System in Egypt: New Compliance Obligations for 2024

With the arrival of July 2024, the deadlines for new funders to join the salary and payroll system in Egypt are approaching. Due to the importance of this matter, we will review in this article the key points of Minister of Finance Decision No. 386 of 2023, which outlines the stages of obligating funders to join this system.

Stages of Obligating Funders to the Salary and Payroll System

The decision divides funders into several stages and sub-stages for joining a system that unifies the principles and standards for calculating wage and payroll taxes. The stages of obligation are detailed as follows:

Phase Four includes several sub-stages, which are:

• Sub-stage One: Obligating 500 entities/companies of the top funders of the tax center to start from October 15, 2023 (according to the attached list in the decision).
• Sub-stage Two: Obligating 1000 entities/companies of the top funders of the tax center to start from December 15, 2023 (according to the attached list in the decision).
• Sub-stage Three: Obligating the remaining funders of the top funders of the tax center (those not included in the first and second stages) to start from February 15, 2024.
• In the fifth phase: all entities/companies funded by the Tax Center for major funders are required to implement a system for standardizing the principles and criteria for calculating wage and salary taxes starting from April 15, 2024.
• In the sixth phase: all entities/companies funded by the remaining tax centers, as well as funders of corporate tax missions in Cairo, Alexandria, and South Valley Investment, are required to implement a system for standardizing the principles and criteria for calculating wage and salary taxes starting from July 15, 2024.
• In the seventh phase: all entities/companies funded by the Cairo Fourth region and all integrated tax missions are required to implement a system for standardizing the principles and criteria for calculating wage and salary taxes starting from October 15, 2024.
• In the eighth phase: all entities/companies funded by the remaining Egyptian Tax Authority missions are required to implement a system for standardizing the principles and criteria for calculating wage and salary taxes starting from December 15, 2024.

Important Notes:

The Egyptian Tax Authority provides a guidance manual for the unified system of calculating wages and salaries taxes, which explains the details of the system accurately.

Conclusion

Minister of Finance Decision No. 386 of 2023 specifies the stages of obligating funders to join the wages and salaries system in Egypt, with funders divided into specific time periods to ensure the gradual implementation of the new system to unify the basis and standards of calculating wages and salaries taxes.

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