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hire in Ethiopia

Ethiopia EOR



PAYROLL TAX 11% to 25%


TIME TO HIRE 24 hours

Hire employees in Ethiopia, no subsidiary required

Horizons is a global employment organization which offers a range of solutions to empower client companies hiring internationally. The Horizons Ethiopia Employer of Record (EOR) solution allows you to hire an Ethiopia-based team, without needing to set up a local legal presence. 

This saves you time and money, and significantly reduces the risk of non-compliance, fines and penalties. 

Our Ethiopia EOR makes it easy to hire in Ethiopia

Through Horizons, international companies can legally hire in Ethiopia — without the need for an expensive local subsidiary.

Fast Hire

Through the Horizon EOR solutions, new employees in Ethiopia can be hired, with onboarding initiated, within 24 hours.

Legal & HR Team in Ethiopia

Experts in Ethiopia labor and employment tax law ensure you are fully compliant with all applicable laws.


Horizons ensures accurate salary and payroll processing for all Ethiopia-based employees. The Horizons EOR platform makes income tax withholding and expense management easy.


Horizons ensures that all Ethiopia-based employees are welcomed onboard with compliant labor documentation and contracts.

Stay Compliant

Horizons ensures that employment in Ethiopia is compliant, and deals with any legal and compliance issues as they arise.

Cost Savings

With an Ethiopia EOR solution, you save up to 85% of the total cost of hiring in Ethiopia.

Hire and pay talents
with Horizons in
180+ countries

What is an Ethiopia EOR?

An Employer of Record (EOR) solution is a specialist HR solution which enables a third party company to become the legal employer of staff for a client company. The client company retains day-to-day supervision of employees, but the EOR becomes the legal employer of that workforce and responsible for payroll and employment tax administration.

An Ethiopia EOR becomes the legal employer for a workforce  based in Ethiopia. This could be a local EOR, a regional Africa EOR, or a global EOR that operates in Ethiopia.

By acting as the EOR, the client is freed to focus on its core business activities, rather than employment compliance.

The Ethiopia EOR is paid a fee for its services, based either on a fixed rate per employee, or as a percentage of total labor burden (I.e., the total cost of employment).

What are the benefits of engaging an Ethiopia EOR?

Engaging an Ethiopia EOR solution brings a range of benefits.

One benefit is the cost savings that EOR solutions usually provide. By outsourcing HR and payroll responsibilities, a client company saves on paying internal staff to do the same task. More significantly, an international company saves by not having to set up a local subsidiary in order to hire employees in Ethiopia (the usual requirement). 

In addition, an EOR can often negotiate better rates for employee benefits, such as pensions and health insurance. 

Perhaps most significantly, client companies benefit by engaging an Ethiopia EOR due to the compliance expertise and liability. Not only does an Ethiopia EOR have a team of HR professionals knowledgeable about employment law in Ethiopia on hand, it also becomes legally responsible for employees of the client company. 

How does an Ethiopia EOR help businesses hire employees?

An Ethiopia EOR is primarily an HR and payroll compliance expert. They are knowledgeable about local employment and tax laws, and become legally responsible and liable with respect to most matters of employment compliance. 

An Ethiopia EOR provides compliant draft employment contracts (in either English or Amharic), offers ad hoc advice on legal and compliance matters, and takes on a range of legal duties. 

Specifically, an Ethiopia EOR ensures compliance with some of the following matters: 

Annual leave and public holidays in Ethiopia

An Ethiopia EOR becomes responsible for ensuring that all Ethiopia staff receive their mandatory benefits.

When it comes to paid time off in Ethiopia, employees in Ethiopia received 16 days paid time off (i.e., annual leave). There are also a number of paid public holidays in Ethiopia. Some of the most notable ones include: 

Ethiopia has a range of national public holidays that are celebrated annually. In 2023 these holidays are:
Date Holiday name
7 Jan Ethiopian Christmas Day
19 Jan Epiphany / Timkat
2 Mar Adwa Victory Day
14 Apr Ethiopian Good Friday
16 Apr Fasika
22 Apr Eid ul Fitr (Tentative Date)
1 May International Labor Day
5 May Patriots’ Day
28 May Derg Downfall Day
29 Jun Eid al-Adha (Tentative Date)
12 Sep Ethiopian New Year
27 Sep The Prophet’s Birthday (Tentative Date)
28 Sep Meskel

Additionally, there are also several other holidays observed only by certain groups or in certain regions of Ethiopia: This includes the Islamic holiday of Eid al-Fitr and the Orthodox Christian holiday of Timkat.

Paternity and Maternity leave in Ethiopia

Parental leave requirements in Ethiopia are set out in the Labor Proclamation No. 377/2003. Under this law, female employees have a right to 120 days of maternity leave — 30 days prior to birth and 90 days after. During this time, the employee receives full pay and benefits.

Male employees can expect up to three consecutive days of paid paternity leave.Male civil servants are entitled to five days.

Employer pension contributions in Ethiopia

According to the Private Organization Employees’ Pension Proclamation (Proclamation No. 1268/2022) all employers in Ethiopia (including an Ethiopia EOR) must make contributions into a pension scheme on behalf of their employees.

Currently, employers must contribute 11 percent of an employee’s basic salary, with the employee contributing 7 percent.

If a business in Ethiopia cannot show a history of compliant pension payments it may not be able to get its business licenses renewed.

Income tax withholding in Ethiopia

All employers, including Employers of Record, are required to withhold income tax from employee salaries in Ethiopia. This must then be remitted to the tax authority at regular intervals.

The current income tax rates that apply in Ethiopia are:

  • 0 percent on the first 600 Birr of taxable income
  • 10 percent on the next 1,050 Birr of taxable income
  • 15 percent on the next 1, 549 Birr of taxable income
  • 20 percent on the next 2,049 Birr of taxable income
  • 25 percent on the next 2550 Birr of taxable income
  • 30 percent on the next 31,00 Birr of taxable income
  • 35 percent  for all higher amounts.

Healthcare and health insurance in Ethiopia

There is no requirement for employers or EORs in Ethiopia to provide health insurance for their employees. However, the Ethiopian Health Insurance Agency (EHIA) oversees two public insurance schemes: 

  • Social Health Insurance (SHI)  — this is for public service employees, non-profits and private organizations and is gradually being rolled out 
  • The Community-based Health Insurance (CBHI) scheme  — this is mainly aimed at supporting workers in the region who may have no other coverage.

While the goal for the Ethiopia government is universal coverage through these schemes, this has yet to be implemented. 

Jumpstart your hiring with an Ethiopia EOR

Ethiopia EOR solutions take the stress out of hiring employees in Ethiopia. By using the Horizons EOR solution, any company, anywhere in the world can hire and pay employees through the Horizons platform, in full compliance with local laws and regulations. 


An Ethiopia Employer of Record (EOR) is the legal employer of your team in Ethiopia. They become legally responsible for your payroll, tax withholding and social contributions. 

An Ethiopia PEO usually provides an EOR solution but also offers other services, such as visa support and recruitment. 

Usually, the easiest way for global companies to hire in Ethiopia is through an Ethiopia Employer of Record (EOR) solution. This ensures that employees are onboarded quickly, at low cost, and in compliance with local laws and regulations.