* Playroll continues to analyse immediate opportunities and fulfilled roles by recruitment partners, contractors and employers to identify in-demand jobs.

Capital City
Addis Ababa

Ethiopian Birr (Br)


EAT (GMT +3)

Employment Cost


Annual Leave

16 days

In-demand Specialties*
Agriculture, Healthcare, Information Technology

The Ultimate Guide to Hiring Employees in Ethiopia

Simplify hiring employees in by partnering with Playroll. Our Employer of Record (EOR) handles hiring, onboarding, payroll, taxes, immigration, benefits administration, and compliance. While you maintain control of day-to-day tasks and responsibilities.


Key Considerations Before Hiring In Ethiopia

Employing in Ethiopia requires employers to own a legal entity in the country and manage payroll, tax, benefits and compliance through their own in-country resources. Grow your team in Ethiopia with our Employer of Record solution, ensuring streamlined, compliant business expansion with no entity.

Playroll allows you to hire employee's in Ethiopia quickly, easily and we even automate tax document collection, benefits, payroll and more.

Good To Know

Ethiopia, situated in the Horn of Africa, serves as a vital trade and investment center due to its strategic access to major seaports and airports.

Boasting one of the world's fastest-growing economies, it anticipates sustained growth of 7% annually, driven by infrastructure investment, expanding consumer markets, and increasing foreign direct investment.

With a diverse cultural landscape comprising over 80 ethnic groups and languages, Ethiopia is renowned for its rich history, vibrant traditions, and globally celebrated exports like coffee.

The nation extends lucrative incentives for foreign investors, including tax breaks, duty exemptions, investment security, and dedicated economic zones, fostering an attractive environment for business expansion and development.


Fundamental Aspects of Employment in Ethiopia

The employment contract in Ethiopia must be in Amharic, the official language, or a language understood by the employee. It should detail the terms and conditions of employment, including:

  • Remuneration
  • Working hours
  • Benefits
  • Probation period
  • Termination clauses

Probationary Period in Ethiopia

If a probationary period is agreed upon, it must be documented in writing and cannot surpass 60 working days from the start of employment.

Working hours in Ethiopia

Normal working hours are capped at eight hours per day or 48 hours per week.

Overtime in Ethiopia

Overtime rates are:

  • 150% of normal hourly rate for work between 6 a.m. to 10 p.m.
  • 175% of normal hourly rate for work between 10 p.m. to 6 a.m.
  • 200% of normal hourly rate for work on a weekly rest day.
  • 250% of normal hourly rate for work on a public holiday.

Navigating Key Aspects of Payroll in Ethiopia

Ethiopia has a robust and complex payroll and tax system, and as an employer, it pays to understand payroll process basics.

8 July - 7 July

Fiscal Year in Ethiopia

8 July - 7 July is the 12-month accounting period that businesses in Ethiopia use for financial and tax reporting purposes.

Payroll Cycle in Ethiopia

The payroll cycle in Ethiopia is usually monthly, with employees being paid as stipulated in the employment contract.

Minimum Wage in Ethiopia

Minimum wages and salaries in Ethiopia

There is no national minimum wage in Ethiopia, however for the public sector there is a recommended 420 ETB per month.

Bonus Payments in Ethiopia

While there is no legal requirement to provide a 13th salary bonus, annual bonuses are common in Ethiopia.

Comprehensive Overview of Employment Taxes in Ethiopia

Understanding the tax obligations for both employers and employees is crucial when operating in Ethiopia's business landscape. This section explains how taxes and statutory fees affect payroll and individual earnings in Ethiopia.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 11% on top of the employee salary in Ethiopia.

Tax Rate Tax Type

Employee Payroll Tax Contributions

In Ethiopia, the typical estimation for employee payroll contributions cost is around 7%.

Tax Rate Tax Type

Individual Payroll Tax Contributions

Income tax in Ethiopia follows a progressive structure, as follows:

Tax Rate Income Bracket

Pension in Ethiopia

The public pension in Ethiopia is funded by the pension fund, with the employer contributing 11%. Private organization employees with at least 10 years of service receive retirement benefits for life upon reaching retirement age if their employment contract is terminated.

The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Ethiopia tailored to your needs.

Easily navigate payroll, taxes and contributions with Playroll.

Grow your distributed workforce today!

Understanding the Protocols for Termination of Employment in Ethiopia

When it comes to terminating employment in Ethiopia, understanding the legal obligations regarding severance pay and contributions is essential. Below is a detailed overview of the key considerations for both employers and employees.

Termination Process

Employers in Ethiopia can terminate employment contracts for reasons related to business, personal issues, or misconduct. Written notice specifying the reason for termination is required in such cases.

Notice Period

The notice period in Ethiopia varies based on the employee's tenure:

  • 0-1 years: 1 month notice
  • 1-9 years: 2 months notice
  • 9+ years: 3 months notice
  • Termination due to workforce reduction: 2 months notice

Severance Pay

Severance pay in Ethiopia is determined by the employee's tenure:

  • 1 year: 30 days' wages
  • 2+ years: 30 days' wages plus 10 days for each additional year worked (up to 12 months)
  • Termination due to workforce reduction: 60 days' wages

Annual Leave Entitlements and Company Policies in Ethiopia

The annual leave entitlement in Ethiopia is 16 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays in Ethiopia

There are 13 days of public holidays.

Holiday Date

Paid Time Off in Ethiopia

Maternity Leave in Ethiopia

Paternity Leave in Ethiopia

Sick Leave in Ethiopia

Marriage Leave

Special Leave

Parental Leave In Ethiopia

Ethiopia's Benefits Built Into Playroll

Competitive benefits package in Ethiopia

Playroll is committed to providing tailored, competitive benefits packages that are designed not only to attract but also retain top talent worldwide. Our global team of benefits experts build custom local packages to ensure your employees in Ethiopia's needs are met. Typically our packages contain some or all of the following benefits.

Health Insurance
Pension or 401k
Life and Disability Insurance
Vision Insurance
Dental Insurance
Discounts & Perks

Playroll Supplementary Benefits For Employment In Ethiopia

Make your benefits package in Ethiopia a talent magnet with Playroll's local plans. We offer benefits that are compliant, comprehensive, and flexible — all at competitive rates. Speak with our local territory experts to explore the localized benefits we can offer you, while you scale your team.

Statutory benefits for employment in Ethiopia

Statutory benefits include social security benefits such as:

  • Retirement pension
  • Invalidity pension
  • Incapacity pension
  • Survivors’ pension
  • Gratuity

Playroll allows you to provide localized benefits for employees in Ethiopia within minutes. All in one manageable online dashboard. If you'd like specific information about our benefits packages in Ethiopia create an account or contact our global expansion team, today.

Playroll Benefit Services

Playroll's Expertise in Facilitating Work Visas for Ethiopia

At Playroll we're all about empowering employees to work anywhere, making mobility possible for global teams. We sponsor visas and hire the employee for you, so you don’t have to worry about payroll, taxes, and more.

It's important to note, visa support can be complicated. There are many variables that affect whether sponsorship is possible, including one’s nationality, education, marital status, and the immigration policy for the country in question.

Unfortunately, this means we can’t support visas everywhere - with that being said, we handle the entire visa process in-house, and dig into your situation to give you an overview of what to expect if we're able to help with visa sponsorship in Ethiopia.

Playroll Immigration Support

Integrated EOR Platform

Legal and compliance experts are readily available to provide guidance and case-by-case Q&A support.

Accelerated Immigration Timeline

By leveraging dedicated support from in-house legal and compliance experts for case by case questions and more.

Hire in 50+ Countries

Accelerated Immigration Timeline

Acquiring a visa without an entity has never been easier, leverage Playroll's global coverage to sponsor and hire employees.

Playroll Visa Services

Hiring International Employees is Complex.

Playroll makes it easy!