In Ethiopia, individuals are taxed on income that is sourced from Ethiopia, wherever paid. An individual is either taxed as a resident or a non-resident.
Ethiopian resident individuals are taxed on their worldwide income. Non-residents are taxed on their Ethiopian-sourced income. The same rates of tax are applicable to both residents and non-residents.
The taxable income of a person for any year is the total of that person's income for the year less the total amount of deductions allowed to that person. Taxable income comprises the following: employment income, business profits, and investment income.
Summary of monthly employment income tax brackets
Income tax payable (%)
Deductible fee** (ETB)
* Ethiopian birr.
** The deductible fee is a tax relief applied to the Pay-As-You-Earn (PAYE) system, and the amount depends on the salary bands.