GROW YOUR BUSINESS IN ETHIOPIA
Have an enterprise level payroll department and a HRMS with Employee Self-Service at a per employee cost
Praxima Services Includes
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Full Payroll Outsourcing
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Hybrid Payroll Outsource
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International Payment Management
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Local Filing
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Social Security Filing
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Interact with Local Authorities
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Human Resources Management System
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Integration with all Accounting and Third Party
Software
Benefits of outsourcing to Praxima
Local Tax Compliance
Secure Data Transferring
Responsive Administrators
Increase Productivity
Industry Experts
Running Your Payroll
Focus on Your
Core Business
Full International Quality Payroll Department in Ethiopia
Payroll in Ethiopia
In Ethiopia, income taxes are based on residence and source. Residents will be taxed on their worldwide income while non-resident will only be taxed on their Ethiopian-source income.
TAX RATES | 2022
Taxable income in Ethiopian Birr (ETB)
0 – 600 0% deduction 0
601 – 1 650 10% deduction 60
1 651 – 3 200 15% deduction 142.5
3 201 – 5 250 20% deduction 302.5
5 251 – 7 800 25% deduction 565
7 801 – 10 900 30% deduction 955
Over 10 900 35% deduction 1 500
SOCIAL SECURITY | 2022
Both the employer and employee contributes monthly toward the Social Security Scheme. The employee contributes 7% of the employee's basic salary while the employer contributes 11% thereof.
STATUTORY FILING | 2022
All tax payers are required to file a tax return. Ethiopia makes use of the PAYE (pay-as-you-earn) system, under which the employer is required to withhold the employee's income taxes. For income other then employment income, an individual is required to file his/her income. Penalties can be imposed for any late filing, failure to file or incorrectly stating the income. Ethiopia's tax year runs from the 8th of July to the following 7th of July.
Tax Residents
In order to qualify as a tax resident in Ethiopia, an individual must live in the country for more than 183 days over a period of 12 months, continuously or intermittently.
Taxable Income
All income generated will be taxed, unless such income is exempted. Employment income are taxed on a sliding scale ranging from 0% - 35%.
Capital gains on immovable property are taxed at 15% and gains on the sale of shares and bonds are taxed at 30%.
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Exempt Income
The following employment income will be exempted from taxes:
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Pension contributions as determined under the Public Servants Pensions Proclamation or the Private Organisation Employees' Pension Proclamation
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Employer contributions to retirement benefits at a maximum of 15% of the employee's monthly salary
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Amounts paid by an employer toward costs of medical treatment, hardship and/or any other allowances
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Transport allowance up to ETB 2200 or 25% of the employee's basic monthly salary, whichever is the lowest.
Your HRMS is Standard
Employee Self-service
Payslip and tax certificate retrieval. Updating of personal particulars. Leave request and balance enquiries
Records
Employee documents folder. Training records. Heath & Safety records. Disiplinary records. Qualifications, resume and hiring records.
Work Flow
Workflow with different approval levels. Full work flow functionality for leave requests, expense and time-sheets
PAYMENTS, REPORTING & FILING
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Direct payment into employee bank accounts. Emailed password protected pay slips.
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Payment of taxes, benefit providers and other creditors.
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Filing of returns to the authorities.
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Generation and filing of statutory reports.
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General ledger and 100's of customisable reports.
