🇪🇹 Ethiopia · Guide
How Income Tax Works in Ethiopia
Ethiopia rewrote its employment income tax in Proclamation 1395/2025 (effective July 2025): a new 6-band monthly schedule from 0% to 35%. Your 7% pension contribution is deducted before tax is computed.
The schedule (monthly)
| Monthly income (ETB) | Rate |
|---|---|
| 0 – 2,000 | 0% |
| 2,001 – 4,000 | 15% |
| 4,001 – 7,000 | 20% |
| 7,001 – 10,000 | 25% |
| 10,001 – 14,000 | 30% |
| Above 14,000 | 35% |
Worked example
Monthly salary of Br 20,000: pension = 7% × 20,000 = Br 1,400. Taxable = 18,600. Tax = 2,850 + 35% × (18,600 − 14,000) = Br 4,460. Take-home = 20,000 − 1,400 − 4,460 = Br 14,140.
There are no statutory health or unemployment deductions in Ethiopia.
Try it: Ethiopia salary calculator →
Sources: ERCA (erca.gov.et), Proclamation 1395/2025. Estimate only — not tax advice.