GROW YOUR BUSINESS IN ETHIOPIA
Have an enterprise level payroll department and a HRMS with Employee Self-Service at a per employee cost
Praxima Services Includes
-
Full Payroll Outsourcing
-
Hybrid Payroll Outsource
-
International Payment Management
-
Local Filing
-
Social Security Filing
-
Interact with Local Authorities
-
Human Resources Management System
-
Integration with all Accounting and Third Party
Software
Benefits of outsourcing to Praxima
Local Tax Compliance
Secure Data Transferring
Responsive Administrators
Increase Productivity
Industry Experts
Running Your Payroll
Focus on Your
Core Business
Full International Quality Payroll Department in Ethiopia
Payroll in Ethiopia
In Ethiopia, income taxes are based on residence and source. Residents will be taxed on their worldwide income while non-resident will only be taxed on their Ethiopian-source income.
TAX RATES | 2024
Taxable income in Ethiopian Birr (ETB)
0 – 600 0% deductible Fee (ETB) 0
601 – 1 650 10% deductible Fee (ETB) 60
1 651 – 3 200 15% deductible Fee (ETB) 142.5
3 201 – 5 250 20% deductible Fee (ETB) 302.5
5 251 – 7 800 25% deductible Fee (ETB) 565
7 801 – 10 900 30% deductible Fee (ETB) 955
Over 10 900 35% deductible Fee (ETB) 1 500
SOCIAL SECURITY | 2024
Ethiopian citizens are required to contribute to social security, while foreign citizens of Ethiopian origin may choose to contribute. Foreign citizens without Ethiopian origin are not eligible to contribute.
Employers are obligated to contribute 11% of the employee’s basic salary, while employees contribute 7%.
STATUTORY FILING | 2024
All tax payers are required to file a tax return. Ethiopia makes use of the PAYE (pay-as-you-earn) system, under which the employer is required to withhold the employee's income taxes. For income other then employment income, an individual is required to file his/her income. Penalties can be imposed for any late filing, failure to file or incorrectly stating the income. Ethiopia's tax year runs from the 8th of July to the following 7th of July.
Tax Residents
In order to qualify as a tax resident in Ethiopia, an individual must live in the country for more than 183 days over a period of 12 months, continuously or intermittently.
Taxable Income
Residents are taxed on their international earnings. Non-residents are solely taxed on income derived from Ethiopia.
Any payments or profits obtained in cash or in kind as a result of an individual's job are considered employment income.
.
Exempt Income
The following items are exempt from income tax in Ethiopia:
-
Payments by employers for employees' medical treatment costs.
-
Transportation allowances provided under an employment contract.
-
Reimbursements for legitimate business travel expenses.
-
Food and beverages provided by employers in the mining, manufacturing, or agricultural sectors.
-
Amounts exempted by international agreements.
Compensation for personal injury or death.
Your HRMS is Standard
Employee Self-service
Payslip and tax certificate retrieval. Updating of personal particulars. Leave request and balance enquiries
Records
Employee documents folder. Training records. Heath & Safety records. Disiplinary records. Qualifications, resume and hiring records.
Work Flow
Workflow with different approval levels. Full work flow functionality for leave requests, expense and time-sheets
PAYMENTS, REPORTING & FILING
-
Direct payment into employee bank accounts. Emailed password protected pay slips.
-
Payment of taxes, benefit providers and other creditors.
-
Filing of returns to the authorities.
-
Generation and filing of statutory reports.
-
General ledger and 100's of customisable reports.
