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hire in Ethiopia

Ethiopia PEO



PAYROLL TAX 0 to 35%


TIME TO HIRE 24 hours

Hire and pay talents
with Horizons in
180+ countries

Simple, compliant hiring with Horizons PEO

Hire in Ethiopia

Horizons provides global employment solutions allowing any business to easily hire employees in Ethiopia — in full compliance with local laws and regulations. The Horizons Ethiopia PEO solution means you can do hire employees in Ethiopia without the need to set up a local subsidiary or entity.

This saves businesses time and money, and reduces or eliminates the risk of non-compliance. 

Facts & Stats

PEO Platform

Hire in Ethiopia, and pay employees through our platform or app.

PEO Cost

Our Ethiopia PEO solution is the most affordable on the market.


Fast Ethiopia onboarding, hire in as little as 24 hours. 


We draft compliant Ethiopia labor contracts.

Local benefits

We manage all Ethiopia “Five Insurances” mandatory benefits.

180+ Countries

It doesn’t stop with Ethiopia — we hire employees globally.

stay compliant with Ethiopia labor laws

What is an Ethiopia PEO?

A Professional Employer Organization (PEO) is a specialist HR business that provides various employment-related services to client companies.

In Ethiopia, a PEO offers services such as payroll processing, benefits administration, tax compliance, and HR support. The PEO enters into a co-employment relationship with the client company, meaning that it takes on certain employer responsibilities for the client company’s team.

In short, the PEO acts as an outsourced HR department for the client company, allowing the client to focus on its core business activities. The PEO is paid a fee for its services, based either on the number of employees or a percentage of total payroll burden (I.e., the total cost of employment).

What are the benefits of engaging an Ethiopia PEO?

There are several benefits of using a PEO in Ethiopia. One benefit is the cost savings that a PEO can provide: By outsourcing HR tasks to a PEO, a client company can avoid the expenses associated with hiring and training in-house HR staff. In addition, a PEO can often negotiate better rates for benefits such as health insurance and retirement plans, which can save the client company money. Another benefit of using a PEO is the expertise and resources that it can offer. A PEO typically has a team of HR professionals who are knowledgeable about employment laws and regulations in Ethiopia. This can help the client company to stay compliant and avoid costly legal issues. A PEO also has access to a range of HR tools and technologies that can help the client to more effectively manage its workforce. Using a PEO can also help a client company to be more agile and flexible. By outsourcing HR tasks to a PEO, the client can focus on its core business activities and be better positioned to respond to changing market conditions.

How does an Ethiopia PEO help businesses hire employees?

In Ethiopia, a PEO can assist client companies with the hiring process in a variety of ways. One way is by handling the administrative tasks associated with hiring, such as posting job advertisements, reviewing resumes, and scheduling interviews. A PEO can also help a client company to create job descriptions and offer letters, and to conduct background checks and reference checks on potential hires.

In addition, a PEO can provide guidance to a client company on employment laws and regulations in Ethiopia, including those related to hiring. This can help the client company to ensure that it is complying with all relevant laws and to avoid potential legal issues.

Finally, a PEO can provide training and support to a client company on effective hiring practices, such as how to conduct interviews and assess candidates. This can help the client company to make informed hiring decisions and to build a strong and productive workforce.

Specifically, an Ethiopia PEO can help ensure compliance with the following legal requirements:

Ethiopia national holidays 2023

An Ethiopia PEO can help you manage benefits in Ethiopia by managing all benefits for your Ethiopia staff. This includes leave management, healthcare, and pensions.When it comes to annual leave/vacation leave, employees in Ethiopia received 16 days paid annual leave. In addition to an are several mandatory 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:

DateHoliday name
1-3 JanNew Year’s Day

In addition to these holidays, there are also several other holidays that are observed by certain groups or in certain regions of Ethiopia. For example, some areas observe the Islamic holiday of Eid al-Fitr, while others observe the Orthodox Christian holiday of Timkat.

It is important to note that while these holidays are mandatory, the actual dates on which they are observed may vary depending on the lunar calendar used in Ethiopia.

Paternity and Maternity leave in Ethiopia

In Ethiopia, the maternity leave requirements are established by the Labor Proclamation No. 377/2003. According to this law, female employees are entitled to a total of 120 days of maternity leave. This covers 30 days before birth and 90 days after. During this time, the employee is entitled to receive her full pay and other benefits.

Male employees are entitled to three consecutive days of paid parental leave. Civil servants get five days.

Employer pension contributions in Ethiopia

Under the Private Organization Employees’ Pension Proclamation (Proclamation No. 1268/2022) employers in Ethiopia are required to make contributions on behalf of their employees into a nationally-administered pension scheme.

Currently, employers are required to contribute 11 percent of an employee’s basic salary, while the employee must contribute 7 percent. 

Evidence of compliant payment of these contributions is essential for a business in Ethiopia to maintain and have its business licences renewed. 

Income tax withholding in Ethiopia

In Ethiopia, employers are required to withhold income tax from the salaries of their employees and remit the withheld tax to the government on behalf of their employees. The income tax rates in Ethiopia are progressive, with higher rates applied to higher levels of income. The current income tax rates in Ethiopia are as follows:
  • 0% on the first 600 birr of taxable income
  • 10% on the next 1,050 birr of taxable income
  • 15% on the next 1, 549 birr of taxable income
  • 20% on the next 2,049 birr of taxable income
  • 25% on the next 2550 birr of taxable income
  • 30%  on the next 31,00 birr of taxable income
  • 35%  for all higher amounts.

Healthcare and health insurance in Ethiopia

In Ethiopia, employers are not required to provide health insurance for their employees. However, the Ethiopian Health Insurance Agency (EHIA) oversees two public insurance schemes:

  • Social Health Insurance (SHI) for public service employees, non-profits and private organizations
  • The Community-based Health Insurance (CBHI) scheme, mainly aimed at informal workers in the regions.

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

Hire through an Ethiopia PEO

Ethiopia Professional Employer Organization (PEO) solutions take the stress out of hiring employees in Ethiopia.  By using a PEO, any company, anywhere in the world can hire quickly, cost-effectively and in full compliance with Ethiopia labor laws and regulations. 

Hire in Ethiopia in 24h
without your own local entity.

With Horizons, you get quick service, transparent pricing, and expert support.


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

An Ethiopia PEO usually offers an EOR solution as part of its offerings, but often offers other services as well, such as visa support and recruitment. 

The easiest way for international companies to hire in Ethiopia is through an Ethiopia PEO. This ensures that employees are onboarded quickly, cost-effectively and in full compliance with Ethiopia’s labor laws.