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How To Hire New Remote Employees | Ethiopia

Hire employees in

Ethiopia

, easily

Whether you're looking for an independent contractor, a remote team member, or a full-time employee in

Ethiopia

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Ethiopia

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capital city
Ethiopia
currency
Ethiopian birr (Br, ብር,)
language spoken
Amharic
payroll frequency
Monthly
employer taxes
11%
vat - standard rate
15%
cost of living index
35,466.31 Ethiopian Birr
gdp - real growth rate
6.1% (2020)
termination process
Varies
employee protections
Moderate
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Overview

Ethiopia, with a population of over 115 million as per 2020, is Africa's second most populous country after Nigeria in Africa. Ethiopia has been one of the world's fastest growing economies over the last 15 years at an average of 105 per year. Among other reasons, capital accumulation, particularly through public infrastructure projects, drove growth. The agriculture sector employs over 70% of the population and was unaffected by the COVID-19 epidemic.

Public Holidays

7 January- Orthodox Christmas Day

19 January- Timkat

2 March- Adwa Victory Day

22 April- Good Friday (Eastern)

24 April- Orthodox Easter

1 May- Labour Day

2–3 May- Eid al-Fitr

5 May- Patriots' Victory Day

28 May- Derg Downfall Day

9–10 July- Eid al-Adha

7–8 October- Prophet's Birthday

Minimum wage

Ethiopia does not have a federal minimum wage. Certain government institutions and public enterprises established their own minimum wages: public sector employees earn a monthly minimum wage of Birr 420 ; banking and insurance employees receive a monthly minimum wage of Birr 336.

Payroll cycle

Ethiopian payroll cycle is monthly. 

Taxation

Employment income per month Income tax payable
Over To
0 birr 150 birr Exempt threshold
151 birr 650 birr 10%
651 birr 1,400 birr 15%
1,401 birr 2,350 birr 20%
2,351 birr 3,550 birr 25%
3,551 birr 5,000birr 30%
Over 5,000 birr 35%

Leaves

Paternity leave 

In Ethiopia, male workers are entitled to a salaried three consecutive days of paternity leave. However, the Civil Service Law provide a paternity leave of five working days that is paid to all-male civil servants.

Sick leave

Ethiopian workers may take sick leave only after completing the probationary period. The sick leave period is up to six months and pay rate rely on the time of the leave. Employers can grant paid sick leave in various techniques including 100% wage during the initial month of the sick leave, 50% salary during the second and third months and unsalaried sick leave from the fourth month henceforth. 

Termination process

Based on the Ethiopian Labour Proclamation, the contract may be terminated through an agreement of the parties engaged. A contract of employment may be terminated on other grounds associated with the worker’s skills, conduct, operational or organizational requirement of the role or objective situations resulting from the employee’s work.

Notice period 

The notice period in Ethiopia ranges between one to three months according to the duration of service of the employee. For a worker who has finished the probation period and has a duration of service not surpassing a year, a notice period is granted. For an employee who  has a service period above a year to nine years, a notice period of two months is offered. 

Severance 

In Ethiopia, an employee may terminate the employment by offering a 30-day notice duration to the employer. 

Probation 

The labour law of Ethiopia requires the probation period be established in writing when the parties engaged approve to have a probation duration. The period must not, in any case, surpass 45 consecutive days. 

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