Ethiopia Employer of Record & Payroll

Ethiopia Africa Employer of Record

Africa Deployments Ethiopia offers our clients Africa Employer of Record (EOR) & Payroll services covering all of the regions within.  We offer full-time employment or fixed terms contracts based on your requirements in Ethiopia for locals only.  Unfortunately, Human Resources are not permitted to employ Expatriates in Ethiopia.  ADS will also advise our client’s on the best Human Resource (HR) practices when setting up employees locally in Ethiopia.

ADS as the Ethiopia Employer of Record takes care of the local tax & PAYE remittances to the Revenue Services on a monthly basis ensuring that they are fully compliant with the law.  We will also ensure that their salaries are paid on time monthly and issue them with their pay slips.  Work with a trusted Africa Employer of Record who understands the challenges in Africa.

In addition to our services, we can offer the employee in Ethiopia, Medical, Disability, Life, and Workmen’s Compensation insurance.

Ethiopia, in the Horn of Africa, is a rugged, landlocked country split by the Great Rift Valley. With archaeological finds dating back more than 3 million years, it’s a place of ancient culture. Among its important sites is Lalibela with its rock-cut Christian churches from the 12th–13th centuries.

What income is Taxable in Ethiopia:

Any individual who works and lives in Ethiopia for more the 183 days a year will be subject to local taxes in Ethiopia.  The Corporate Person maintains a principal office, the effective management of the company or the company is registered by the Ministry of Trade and Industry in Ethiopia.

Any income earned in the form of cash, wages, salary, overtime, leave pay or payment in lieu of leave, commissions, gratuity, bonus, or any amount that has benefited the employee.

What income is exempt from taxes in Ethiopia:

  • A Transport Allowance is allowable and tax-free up to a monthly amount of 2,200.00 Birr or 25% of the employee’s salary if the work requires the individual to travel
  • Employment income up to 600.00 Birr
  • Pension
  • Amounts covered by the employer for hardship, medical treatment etc…
  • Transport expenses, per diem payments while traveling for work assignments

What type of leave is allowed in Ethiopia:

  • Annual leave – 14 working days for the first one year of service. 14 days plus 1 working day for every year of service.

  • Sick leave – Cannot be more than six months counted consecutively or separately over a 12 month period starting from the first day of sickness. First month 100% payment of wages. Next two months with 50% of wages.  Next three months without pay.

  • Maternity leave – 30 consecutive days of leave with pay preceding the presumed date of delivery and 60 consecutive days of leave after her confinement.

Can you give Fringe Benefits:

Yes, you can but keep in mind that Fringe Benefits will be subject to employee PAYE tax.  Only benefits that cannot be converted to cash will not be subject to tax.

What are the Employer & Employee contributions in Ethiopia:

  • Employee’s will contribute 7% towards pension fund
  • Employer’s will contribute 11% towards pension fund
  • No other Social Securities are paid in Ethiopia

What Double Tax Treaties are in place in Ethiopia:

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