Powering Payroll, Compliance, and Workforce Management in Ethiopia

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Simplify Payroll, Compliance & Hiring in Ethiopia with Us

How We Help You with Payroll & Compliance in Ghana

Whether you're hiring your first employee or managing hundreds, our team helps you navigate local laws and execute flawless payroll.

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Payroll Outsourcing

Accurate, compliant payroll processing—including local tax filings, reporting, and payslip delivery.

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Employer of Record

Hire employees without a legal entity. We act as legal employer and handle all compliance responsibilities.

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Payroll Software – Ethiopia

Global payroll software built for complexity—configurable, compliant, and integrated with your HR stack.

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Compliance Services

Tax and statutory support for onboarding, terminations, and filings in
Ethiopia
, standalone or bundled.
Customize your Payroll Solution

Ethiopia at a Glance

Whether you're hiring your first employee or expanding an existing team, understanding the local employment landscape is essential. From visa requirements and statutory benefits to payroll taxes and regulatory oversight, this section provides a practical overview of what employers need to know to stay compliant and operate effectively in 

Ethiopia
Work Permits & Visas

Foreign nationals employed in Ethiopia require specific visas:

  • Foreign Business Firm Employment Visa: For individuals working with foreign‑owned or foreign‑operated businesses; valid for up to 30 days, extendable.
  • NGO Work Visa: For those employed by non‑governmental organizations.
  • Conference Visa: For attending international conferences with an invitation.
  • International Organization/Embassy Visa: For staff of embassies and international organizations.
  • Government Employment Visa: For foreign nationals working directly for the Ethiopian government.
  • Journalist Visa: For professional journalists, filmmakers, and photographers.
  • Investment Visa: For potential investors invited by firms.
  • Private Firm Visa: For employment with Ethiopian‑owned companies for limited assignments.
Payroll
  • Payroll Frequency: Salaries are typically paid monthly, on the last working day.
  • Income Components: Salary, bonuses, overtime, allowances, and taxable benefits.
  • Deductions: Mandatory social security contributions and any voluntary contributions agreed to by the employee.
  • Benefits in Kind: May include company cars, housing support, meal vouchers, and performance bonuses.
  • Social Security Contributions:
    • Employee: 7% of salary
    • Employer: 11% of payroll

    • ‍

    Employment Contracts
  • Minimum Wage: Public sector minimum is ETB 420/month; no official private‑sector minimum.
  • Probation: Limited to a maximum of 45 days.
  • Working Hours: 40 hours per week.
  • Overtime Pay:
    • 150% of normal rate (6 a.m.–10 p.m.)
    • 175% (10 p.m.–6 a.m.)
    • 200% on rest days
    • 250% on public holidays
  • Notice Periods:
    • 1 month for employees with less than 1 year of service
    • 2 months for 1–9 years of service
    • 3 months for 10+ years of service
  • Severance Pay:
    • 1 year = 30 days’ wages
    • 2+ years = 30 days + 10 days per additional year (max 12 months)
    • Workforce reductions = 60 days
  • Non‑Compete: Allowed, usually time‑limited.
  • Termination Grounds: Poor performance, misconduct, or economic reasons.

    • ‍

    Employee Benefits
  • Social Security: Managed by the Private Organisation Employees Social Security Agency.
    • Employee: 7% of basic pay
    • Employer: 11% of payroll
  • Annual Leave: 16 paid days after 1 year, plus 1 extra day per year of service.
  • Sick Leave: Up to 6 months; 100% pay in month 1, 50% pay in months 2–3.
  • Maternity Leave: 120 days paid (30 before and 90 after childbirth), with daily nursing breaks for 2 years post‑birth.
  • Paternity Leave: 3 days paid.
  • Public Holidays: 13 paid national holidays.
  • Unemployment: No statutory unemployment benefits.

    • ‍

    Tax Overview
  • ax Residency:
    • Residents: Taxed on worldwide income (183+ days in Ethiopia or consular/diplomatic service abroad).
    • Non‑Residents: Taxed only on Ethiopian‑sourced income.
  • Tax Year: July 8 – July 7.
  • System: Progressive personal income tax ranging from 0% to 35%.
  • Withholding: Employers must withhold income tax monthly.

    • ‍

    Personal Income Tax
    Chargeable Income (ETB per month) Rate of Tax
    0 – 600 0%
    601 – 1,650 10%
    1,651 – 3,200 15%
    3,201 – 5,250 20%
    5,251 – 7,800 25%
    7,801 – 10,900 30%
    Over 10,900 35%

    Full Country Guide

    How We Help You with Payroll & Compliance in Ghana

    Want the complete PDF guide for

    Ethiopia

    ? We share detailed country guides covering payroll, tax, and compliance — and we send new updates regularly. Just send an email to solutions@praxima.com, and we’ll send it straight to your inbox.

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    Global Payroll Solutions for Every Market

    Expanding beyond

    Ethiopia

    ? Discover how we support compliance and payroll operations in 70+ countries.

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    Why Global Companies Trust Us for Ethiopia Payroll

    Trusted Payroll Solutions Backed by Decades of Experience

    With over 30 years of experience managing payroll and compliance across continents, we’re a trusted partner to enterprises in

    Ethiopia

    and beyond.

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    Support

    Experts with deep local knowledge guide you through every step—onboarding, payroll, compliance—ensuring smooth operations in

    Ethiopia
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    Trust

    Global enterprises and Fortune 500s rely on us for consistent, compliant payroll delivery across complex, multi-country environments

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    Scalable

    Our solutions adapt as you grow, whether you're hiring your first local employee or scaling an international team

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    Compliance

    Stay ahead of legal changes. We ensure your payroll and employment practices remain fully compliant with

    Ethiopia

    's laws

    See Why Leading Companies Choose Us

    Let’s Talk Ethiopia

    Whether you need Payroll Outsourcing, Employer of Record services, or advanced Payroll Software, our experts are here to help you find the right solution. Contact us today for support with payroll, compliance, and hiring in

    Ethiopia
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