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
Full Payroll Outsourcing
Hybrid Payroll Outsource
International Payment Management
Social Security Filing
Interact with Local Authorities
Human Resources Management System
Integration with all Accounting and Third Party
Benefits of outsourcing to Praxima
Local Tax Compliance
Secure Data Transferring
Running Your Payroll
Focus on Your
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.
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.
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%.
The following employment income will be exempted from taxes:
Pension contributions as determined under the Public Servants Pensions Proclamation or the Private Organisation Employees' Pension Proclamation
Employer contributions to retirement benefits at a maximum of 15% of the employee's monthly salary
Amounts paid by an employer toward costs of medical treatment, hardship and/or any other allowances
Transport allowance up to ETB 2200 or 25% of the employee's basic monthly salary, whichever is the lowest.
Your HRMS is Standard
PAYMENTS, REPORTING & FILING
Direct payment into employee bank accounts. Emailed password protected pay slips.
Payment of taxes, benefit providers and other creditors.
Filing of returns to the authorities.
Generation and filing of statutory reports.
General ledger and 100's of customisable reports.