Ethiopia Payroll Outsourcing

Pay Your Talents in Djibouti Compliantly

Seeking A Reliable Payroll Partner in Ethiopia ?

With our Ethiopia Payroll Outsourcing services, your talents are paid on time and without error! Our team at Africa HR Solutions also provides your company with much-needed guidance to ensure that your operations comply with Ethiopia’s Labor Code and tax policies. Over the years, we have played a pivotal role in the expansion of over 400 clients across Africa by providing reliable HR and payroll and cross-border payment outsourcing solutions.

Ethiopia Country Overview

Ethiopia was one of the first African countries to gain independence in 1896!

Geographic location: This landlocked country is located in the Horn of Africa and is bordered by Sudan, Somalia, Djibouti, Eritrea.

Population: Ethiopia is the second most populated country in Africa – which gives way to a myriad of business opportunities.

Economy: Ethiopia boasts one of the fastest-growing economies on the globe with an average 7%-12% annual growth rate. Ethiopia is driven by the agricultural sector – accounting for over 85% of Ethiopia’s employment. The country is also naturally rich in resources such as arable land, gas, Gold, copper, potash and platinum among others.

Payroll in Ethiopia - What You Should Know

  • Population: 117,876,226
  • Gross Domestic Product (GDP): $111.27 B
  • GDP Growth (April 2021): 5.6%
  • Inflation, consumer prices: 26.8%
  • Foreign Direct Investment (% of GDP): 2.2%
  • Unemployment Rate: 3.7%
  • Capital: Addis Ababa
  • Currency: Ethiopian birr
  • Languages: Amharic, Oromo, Afar, Somali, Tigrigna

Employer Contribution

  • 7.00% of the employer’s payroll must be contributed to social security.

Employee Contribution

  • 11.00% of the employee’s payroll must be contributed to social security.
  • Value-added tax (VAT)

    The standard VAT rate is 15% in Ethiopia – applied to the supply of goods and services both local and imported.

    Non-business organizations are exempt from charging Value-Added Tax on services but must still pay VAT on goods/services purchased.

    Exports of goods and services are zero-rated in Ethiopia.

Paid Time-Off

Employees are generally entitled to 16 days of paid annual leave plus one day per year of service. A worker with 5 years of service is entitled to 18 days of paid leave.

Sick Leave

In Ethiopia, workers are entitled to a maximum of 6 months of sick leave.

Maternity Leave

According to the Constitution of Ethiopia and Labor Proclamation, women are entitled to 120 days of paid maternity leave remunerated at 100% of their regular wage.

Paternity Leave

There is no statutory paternity leave in Ethiopia.

An employer can terminate a worker’s contract based on valid grounds such as:

  • The employee has demonstrated a loss of capacity or talent to accomplish their assigned work
  • If the employee’s health and well-being are compromised by their position
  • If the employee is unwilling to move to a locality as required by their company
  • When the position of the worker is dismissed for a valid cause and the worker cannot be transferred to another position

The employer must provide the notice to the employee in person. If not possible, the notice shall be affixed on the notice board in the workplace for 10 consecutive days.

Severance pay in Ethiopia is regulated as follows:

  • 30 x the average daily wages of the last week of service for the first year of service.
  • For less than a year of service, severance pay shall be calculated on a pro-rata basis.
  • The payment shall be increased by 1/3 of the sum for employees who accumulated more than a year of service. The total amount cannot exceed 12 months’ wage.
  • Wherever a contract is terminated in accordance with sections 24(4) and 29 of the labor code, the employee is eligible for a sum equal to sixty multiplied by his average daily salary of their last week of service.
  • Orthodox Christmas Day (7th January)
  • Timkat (20th January)
  • Adwa Victory Day (2nd March)
  • Good Friday (Eastern) (17th April)
  • Orthodox Easter (19th April)
  • Labour Day (1st May)
  • Patriots’ Victory Day (5th May)
  • Eid al-Fitr
  • Derg Downfall Day (28th May)
  • Eid al-Adha
  • Enkutash (11th September)
  • Meskel (28th September)
  • Prophet’s Birthday

Ethiopia Payroll Done The Easy Way. The Right Way.

12 Years of Experience

Over more than a decade, Africa HR Solutions has become a leading payroll service provider across Africa with a proven track record of success with over 400 clients across many industries.

Bulletproof Compliance

Ensuring your operations are carried out compliantly is a must. From country-specific regulations to government laws, we make sure your company is up to code with Africa's legislation at all times.

+44 Countries in Africa

Operating in more than 44 countries in Africa, our team of experts gathered the required knowledge and local expertise to handle your needs and demands - wherever, whenever.

Single Point of Contact

Avoid unnecessary headaches and mistakes thanks to our centralized services and manage everything from a single database. A single point of contact for all of your needs across the continent.

Maximize your ROI

It is cheaper to let a third-party organization handle your payroll than to do it yourself. By saving on the overall cost of payroll, you can reallocate your budget elsewhere to promote company growth.

Swift Payroll Implementation

With Africa HR Solutions you are one call away from implementing an accurate and timely payroll operation to ensure your talents are paid on time no matter where they are in Africa.

We Can Help. Just Tell Us How!

Related Services

Ethiopia EOR

Onboard and pay your talents in Ethiopia without having to set up a legal entity with our extensive Employer of Record solutions.

Ethiopia PEO

Outsource your payroll and benefits administration to us and get access to best in class advantages for your employees.

Ethiopia HR Outsourcing

We take care of your HR functions to help you save up on the overall cost and ensure your operations are carried out compliantly.

Countries We Cover

In the last 10 years, the scenario surrounding compliance in African countries has changed dramatically. Africa HR Solutions understands this and has become a major player in the African payroll market.