Employer of Record in Ethiopia

General Information

• Currency: Ethiopian birr (ETB)
• Employer Taxes: Unknown
• Payroll Frequency: Monthly
• Employee Costs: 7%
• Capital: Addis Ababa
• Fiscal Year: 8 July – 7 July

Main Aspects of the Labour Code

Minimum Wage

General: Ethiopia does not have a national minimum wage; however, the public sector has a recommended minimum of 420 ETB per month.

Payroll

Payroll Cycle: The typical payroll cycle in Ethiopia is a monthly basis.

13th Salary

There is no statutory requirement to provide a 13th salary, however bonuses are common in Ethiopia.

Working Hours

General: In Ethiopia, the standard workweek consists of 8 hours per day, with a maximum of 48 hours per week. The Ethiopian government enacted the Public Servants’ Pension (Amendment) Proclamation 907/2015, which contrasts with Proclamation 714/2011. The earlier proclamation defined a public servant as any monthly salaried individual employed permanently or for a specific period in a public office, public enterprise, or government project. The primary goal of the amendment was to recognize temporary government employees, specifically those working for at least 45 days, as public servants.

Overtime: Any work performed beyond the standard weekly hours is classified as overtime and is governed by a collective labor convention or agreement. Overtime is limited to a maximum of:

• 2 hours in any single day
• 20 hours in any one month
• 100 hours in any one year

Employers compensate employees for overtime at a rate of 125% of the basic salary, increasing to 150% for hours worked between 10 p.m. and 6 a.m. Weekend overtime is paid at 200% of the basic salary, while work performed on public holidays is compensated at 250%.

Leave

Annual Leave (Vacation):

Employees are entitled to a minimum of 16 working days of paid annual leave after completing one year of service. This amount increases by one additional day for every two years of service thereafter. Upon request, unused leave can be carried over for up to two years.

Public Holidays

Some religious holidays are based on the lunar cycle and will be marked as tentative until the exact date is confirmed closer to the holiday.

Sick Days

An employee is entitled to a maximum of six months of sick leave per year. The first month is paid at 100% of the regular salary, while the second and third months are compensated at 50%. The remaining three months are unpaid. For sick leave extending beyond 1 to 3 days, a medical certificate is required.

Maternity Leave

Female employees in Ethiopia are entitled to 120 working days of paid maternity leave, which includes a minimum of 30 consecutive days before the due date and 60 days after childbirth. A maternity confirmation certificate must be submitted before any maternity leave can begin.

Paternity Leave

A father is entitled to paid paternity leave of up to three working days.

Parental Leave

There are no provisions in the law regarding parental leave.

Other Leave

Marriage Leave: Employees are entitled to 3 days of paid leave for their marriage.
Special Leave: Employees can take 5 days of unpaid leave for exceptional circumstances, such as bereavement.

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