Egypt’s Parliament Approves New Wage Hikes and Allowances for State and Public Sector Workers Starting July 2026
During its meeting on Sunday, the Manpower Committee of the Egyptian House of Representatives, chaired by MP Ihab Mansour, Deputy of the Committee, and attended by Counselor Mohamed Eid Mahgoub, granted final approval to a draft law regulating new financial allowances for state workers. The bill outlines the periodic allowance for employees covered by the Civil Service Law, a special allowance for those not covered by it, an increase in the additional incentive for state workers, and a special grant for employees in the public sector and public enterprise sector.
Approved in the presence of government representatives, the draft law is part of a broader package of measures aimed at improving the incomes of state, public sector, and public enterprise sector employees, effective July 1, 2026.
The draft law stipulates granting employees covered by the Civil Service Law a periodic allowance of 12% of their functional wage as of June 30, 2026, with a minimum of 150 EGP per month. This allowance will be incorporated into the employee's functional wage starting July 1, 2026.
Additionally, state employees not covered by the Civil Service Law will receive a special allowance of 15% of their basic wage as of June 30, 2026, or upon appointment for those hired after this date, with a minimum of 150 EGP per month. This special allowance will be added to the basic wage effective July 1, 2026.
Annual Periodic Allowance Exceptions The draft law exempts public service authorities, public economic authorities, and other public legal entities that already disburse an annual periodic allowance of no less than 12% of the functional wage. If the allowance is calculated as a percentage of the basic wage, employees will receive a special allowance representing the difference between the percentage specified in the law and the percentage used to calculate their periodic allowance, which will then be added to their basic wage.
The committee also approved an increase in the additional incentive for both covered and non-covered state employees, effective July 1, 2026. The increase is set as a flat monthly amount of 750 EGP. This incentive will also apply to new hires appointed after this date and will be considered part of the complementary or variable wage, as applicable.
The draft law clearly defines state employees to include permanent and temporary workers on comprehensive remunerations, holders of public and fixed-rate positions within Egypt whose financial allocations are included in the state budget, and those whose employment affairs are governed by special laws or regulations, alongside employees of public service and economic authorities.
Monthly Grant and Minimum Income For employees of public sector and public enterprise companies, the draft law mandates a monthly grant paid from the companies' private budgets, effective July 1, 2026. This grant equals the difference between their scheduled annual periodic allowance and the maximum special allowance set for non-civil service state employees. It will be disbursed as a flat amount and will not be added to the basic wage.
Crucially, the law stipulates that if the total monthly income of an employee in the public or public enterprise sector—comprising the basic wage, all allowances, bonuses, and fixed or semi-fixed comprehensive wage components—falls below 8,000 EGP after applying the new increases, the worker's income will be topped up to reach the 8,000 EGP minimum. Competent ministers are tasked with establishing the regulatory rules for this provision.
Pension Regulations The draft law prohibits combining the special allowance granted to non-civil service employees and public sector workers with the pension increase scheduled for July 1, 2026. If the worker is below the retirement age, they are entitled to the special allowance; if this allowance is less than the pension increase, the pension will be increased by the difference. If the worker has reached retirement age, they are entitled to the pension increase; if this is less than the allowance, the employer will pay the difference.
The Minister of Finance and respective competent ministers will issue the necessary executive decrees to implement these provisions. The law is scheduled to be published in the Official Gazette and will enter into force on July 1, 2026.
