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Compensation & Benefits in EtEthiopia.










Country Capital

Addis Ababa


Birr (ETB)

When establishing a business internationally, managing compensation and benefits is a critical consideration. You’ll need a benefits management plan to ensure employees receive accurate and timely payments.

Ethiopia compensation laws

According to Ethiopia law, employers must provide regular, consistent compensation at the rates agreed upon in the employment contract. Compensation is calculated on an hourly basis, and salaries should be paid in cash unless both the employer and the employee agree to payments in kind. Any payments in kind must not exceed the market value for wages.

If employees work a night shift, overtime, during a public holiday, or rest day, they are entitled to additional compensation at the following rates:

  • Work between 6 a.m. and 10 p.m.: 1.25 times regular wages
  • Work between 10 p.m. and 6 a.m.: 1.5 times regular wages
  • Work on weekends: 2 times regular wages
  • Work on public holidays: 2.5 times regular wages

Guaranteed benefits in Ethiopia

Employees are granted at least 16 days of annual paid leave after 1 year of service with a company and a minimum of 18 days after 5+ years of employment. Workers are also entitled to up to 6 months of leave with pay rates based on the break duration.

Pregnant employees receive 30 prenatal days and 90 postnatal days of paid leave. Employers are responsible for contributing to employees’ social insurance and healthcare coverage.

Ethiopia benefits management

Depending on the job requirements and the work environment, employers should consider providing additional benefits to support employees in their roles. Evaluate your industry standards, any operational requirements, and regional expectations. Some fringe benefits you could provide include:

  • Relocation and housing assistance
  • Performance awards and bonuses
  • A company phone
  • Education and upskilling opportunities
  • Meal vouchers

When developing a benefits strategy in Ethiopia, you’ll need to consider both local market standards and your budget. Offering a strong and competitive benefits plan will help your company attract exceptional candidates and boost overall employee satisfaction.

Restrictions for benefits and compensation

Any restrictions to benefits and compensation are outlined in Ethiopia compensation laws. To ensure fair working conditions for employees, the country has regulations regarding minimum wage and other labor-related standards. All employees are entitled to fair treatment, and employers are prohibited from discriminating based on religion, nationality, sex, political ideology, race, ethnicity, marital status, family responsibilities, pregnancy, descendants, or lineage.

Partner with G-P to build your everywhere workforce.

As your partner in global expansion, G-P will handle payroll and compliance, so you can focus on growing your team and scaling your business. Our market-leading Global Growth Platform™ is powered by the first fully customizable suite of global employment products and backed by the industry’s largest team of in-country HR and legal experts to streamline payroll management and help you offer competitive, compliant local benefits.

Learn more about our platform and request a proposal today.


THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). G-P does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect G-P’s product delivery in any given jurisdiction. G-P makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.

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