Employment Income Tax in Ethiopia
Employment income tax is a tax on the earnings of an employee. The government collects this tax from any individual employees, other than contractors, engaged whether on a permanent or temporary basis to perform services under the direction and control of the employer. Employment income includes any payment or gain in cash or in kind received from employment by the employee subject to certain exemptions: see below.
Employment income is one of the most well known forms of tax in Ethiopia. In 2008/9 fiscal year, employment income tax amounting to 1.017 billion birr was collected from payments made by employers to employees. This represents 4.31% of the total revenue collected by the Tax Authority in that fiscal year.