Ethiopia
Employ in Ethiopia without an entity.
A contract under Ethiopia's Labour Proclamation, pay in birr, and pension and income tax handled every month. One contact and one invoice.
The facts of employing in Ethiopia.
Paid in birr, every month.
A 48-hour week.
Eight hours a day, with 24 hours of rest each week, on Sunday where possible.
16 working days of annual leave.
In the first year, and a day more for every two years after.
Pension for Ethiopian staff.
11% from the employer and 7% from the employee.
What employing in Ethiopia involves, in plain words.
Each is handled for everyone you employ through Global Kinect EOR.
- Contracts
No special form is required. An employee without a written contract receives a signed statement of the terms within 15 days.
- A fixed term is allowed only on the grounds the Proclamation lists.
- Trial period: up to 60 working days, agreed in writing.
- Pension
For Ethiopian nationals, on gross monthly pay for regular hours.
- 11% from the employer and 7% from the employee.
- Income tax
Withheld by the employer each month, on progressive bands.
- Nothing on the first ETB 2,000 a month, then rising through 15%, 20%, 25% and 30% to 35% above ETB 14,000.
- Leave
16 working days in the first year, and a day more for every two years after.
- Sick leave: up to six months in any twelve, with a month on full pay, then two at half pay.
- Maternity leave: 30 days before the birth and 90 after, paid.
- Paternity leave: 3 days on full pay.
- Ending employment
Notice from the employer rises with service, from a month to three months. The employee gives 30 days.
- Severance, for staff outside the pension scheme, in the cases the Proclamation lists: 30 days' wages for the first year, and 10 for each year after, capped at 12 months' wages.
- An unlawful dismissal from an open-ended contract, without reinstatement, adds 180 days' wages and the notice pay.
Hiring in Ethiopia, step by step.
You choose the person
And agree the role and the salary in birr.
The contract is put in place
Under Ethiopia's Labour Proclamation, with a work permit where one is needed.
They are paid monthly
In birr, with pension and income tax handled.
You get one invoice
With every other country you hire in.
Questions about employing in Ethiopia
What does ending employment cost in Ethiopia?
In Ethiopia, an employer gives one to three months' notice, depending on service. A worker outside the pension scheme is owed severance on a closure, a reduction of the workforce or an unlawful dismissal, among other cases. It is 30 days' wages for the first year and 10 days' wages for each further year, capped at 12 months' wages. An unlawful dismissal of an open-ended contract adds 180 days' wages and the notice pay, unless the employee is reinstated.
Can salaries be paid in foreign currency?
Do these rules cover managers?
Can we employ a foreign national?
Employing in Ethiopia, worked through in full.
The guide goes further than this page.
- Hiring in Ethiopia: the work permit, the contract and ending employment, step by step
How you hire in Ethiopia without an entity of your own: the work permit step by step, moving someone already in Ethiopia, the contract, the employee test, leave, ending employment, and the latest tax change.
7 min read