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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.
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:
If a probationary period is agreed upon, it must be documented in writing and cannot surpass 60 working days from the start of employment.
Normal working hours are capped at eight hours per day or 48 hours per week.
Overtime rates are:
There is no national minimum wage in Ethiopia, however for the public sector there is a recommended 420 ETB per month.
While there is no legal requirement to provide a 13th salary bonus, annual bonuses are common in Ethiopia.
Income tax in Ethiopia follows a progressive structure, as follows:
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.
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.
The notice period in Ethiopia varies based on the employee's tenure:
Severance pay in Ethiopia is determined by the employee's tenure:
There are 13 days of public holidays.
Statutory benefits include social security benefits such as:
Legal and compliance experts are readily available to provide guidance and case-by-case Q&A support.
By leveraging dedicated support from in-house legal and compliance experts for case by case questions and more.
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