Your quick guide on talent and labor compliance norms in Ethiopia
Capital
Addis Ababa
Currency
Ethiopian Birr (ETB)
Languages
Amharic, Somali, Afar, Oromo, Tigrigna
Payroll Frequency
Monthly
GDP per Capita
$857.32
Employer Tax
11%
Talent Overview
Ethiopia is the second-most populous country in Africa, with 117 million people in 2021. Its domestic economy has grown at an impressive average of 9.5% in the last 15 years, and 6.3% in FY21. The country has managed to reduce poverty in both urban and rural areas, and aims to achieve lower-middle-income status by 2025.
Major economic hubs:
Addis Ababa, Gondar, Bahir Dar
Skills in demand:
Project Manager, Data Analyst, Technical Support, Web Designer
Local Universities
The top local universities in Ethiopia are as follows:
Local: 1
World: 2714
Local: 2
World: 5183
Local: 3
World: 7048
Local: 4
World: 7939
Local: 5
World: 8067
Salary Data
The below table mentions some common jobs with average monthly salaries in Ethiopia:
| Job Title | Average Monthly Salary (ETB) | Average Monthly Salary (USD) |
| Financial Manager | 17,700 ETB | 331.46 USD |
| General Manager | 15,100 ETB | 282.77 USD |
| Business Development Manager | 14,100 ETB | 264.05 USD |
| Financial Analyst | 11,600 ETB | 217.23 USD |
| Business Analyst | 10,700 ETB | 200.38 USD |
| Project Manager | 10,200 ETB | 191.01 USD |
Talent Sourcing Tips
Jobisland, ethioJobs, EthipiaWork
826,500
The main source of labor laws in Ethiopia is the Labour Proclamation No. 42/1993. The Proclamation lays down all the facets of the employer-employee relationship and guides the labor disputes in the country. The sections below discuss the major points of the law that both employers and employees in Ethiopia should know.
The labor laws in Ethiopia mandate employers to sign an employment contract with the employee. The contract must specify the names of the parties, employee benefits, terms and conditions, and the working location.
The probation period in Ethiopia is a maximum of 45 consecutive days.
| Date | Name | Type |
| 7 Jan | Ethiopian Christmas Day | Public Holiday |
| 19 Jan | Epiphany / Timkat | Public Holiday |
| 2 Mar | Adwa Victory Day | Public Holiday |
| 14 Apr | Ethiopian Good Friday | Public Holiday |
| 16 Apr | Fasika | Public Holiday |
| 22 Apr | Eid ul Fitr (Tentative Date) | Public Holiday |
| 1 May | International Labor Day | Public Holiday |
| 5 May | Patriots’ Day | Public Holiday |
| 28 May | Derg Downfall Day | Public Holiday |
| 29 Jun | Eid al-Adha (Tentative Date) | Public Holiday |
| 12 Sep | Ethiopian New Year | Public Holiday |
| 27 Sep | The Prophet’s Birthday (Tentative Date) | Public Holiday |
| 28 Sep | Meskel | Public Holiday |
| Type of Leave | Time Period | Mandatory |
| Annual leaves | 16 days (+1 day for every of service)18 days after 5 years of service (+1 day for every two years service) | Yes |
| Sick leaves | Up to 6 months per year | Yes |
| Maternity leaves | 120 days | Yes |
Payroll
Payroll Cycle
Ethiopia follows a monthly payroll cycle.
Minimum Wage
The minimum wage in Ethiopia exists only for the public sector at 420 ETB per month and the banking sector at 336 ETB per month. Government entities set their own minimum wages.
Overtime Pay
The standard working hours in Ethiopia are 8 hours per day and 48 hours per week. The overtime compensation is provided as below:
Bonus
There is no law that mandates 13th-month pay in Ethiopia.
Taxes
| Contribution | Tax rate |
| Social security | 11% |
| Contribution | Tax rate |
| Social security | 7% |
| Monthly taxable income (in ETB) | Tax rate |
| 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% |
| 10,901 and above | 35% |
The standard rate of Value-Added Tax in Ethiopia is 15%.
Offboarding & Termination
Employers in Ethiopia can terminate an employment contract with a justified reason by providing a written notice and specifying the last date of work.
Termination by an employer is legal on grounds of expiration of the contract, death of the employee, insolvency of business, unsatisfactory performance or mutual agreement. The employee can give a 15-day notice in advance requesting a termination on the grounds of criminal assault from the employer or unfulfilled terms and conditions.
The notice period in Ethiopia is as follows:
| Length of service | Notice period |
| 1 year | 1 month |
| 1 – 9 years | 2 months |
| More than 9 years | 3 months |
The severance pay in Ethiopia is 30 days’ regular salary for the first year of employment. From the succeeding year, the severance pay increases at the rate of 1/3rd of the previous sum per year of service. This pay is capped at a maximum of 12 months’ pay.
| Length of severance | Severance pay |
| 1 year | 30 days |
| More than 1 year | 1 |
Visa and Immigration
Foreign citizens relocating to Ethiopia for work must have a work permit before their first day of work. However, nationals of the following countries can work in Ethiopia without a visa:
Moreover, a diplomatic or service passport holder of any country (except Pakistan and Somalia can stay in Ethiopia for up to 3 months.
There are three ways to apply for an Ethiopian work visa: online, on arrival, and in the Embassy. The Ethiopian eVisa and on-arrival visas are granted to individuals visiting the country only once for a maximum of 90 days. It does not support multiple-entry and long-term extensions. On the other hand, individuals arriving through an entry point other than Addis Ababa Bole International Airport must visit the Embassy for a work visa. The Embassy-issued work visa supports multiple entries and extensions.
| Overtime Period | Overtime Pay |
| 6 AM – 10 PM | 150% |
| 10 PM – 6 AM | 175% |
| Weekly rest day | 200% |
| Public holiday | 250% |
