Ethiopian employment income tax, 7% pension and net salary at the 2025 Article 11 rates
Estimates only, not financial advice. What you type stays on your device. Checked against sources on 17 Oct 2026.Ethiopian employment income tax is 0% on the first Br 2,000 of monthly pay and then 15%, 20%, 25%, 30% and 35% above Br 14,000, under Proclamation 1395/2025. A 7% pension comes off the salary too. On Br 20,000 a month the tax is Br 4,950 and the net salary Br 13,650.
Basic salary; the pension is worked out on this. The figure is an example to replace.
Only the taxable part. Allowances carry no pension.
Br 13,650.00
Br 20,000.00 less Br 6,350.00 of tax and pensionYour employer adds Br 2,200.00 of pension, so you cost Br 22,200.00 a month.
Not included: exempt allowances, the public servants' pension scheme, other income and graduate cost-sharing.
Proclamation 1395/2025 (Ministry of Revenue) and POESSA pension rates, checked 17 Oct 2026. An estimate, not tax advice.
| Taxable income | Br 20,000.00 |
| 0% on Br 2,000.00 | Br 0.00 |
| 15% on Br 2,000.00 | Br 300.00 |
| 20% on Br 3,000.00 | Br 600.00 |
| 25% on Br 3,000.00 | Br 750.00 |
| 30% on Br 4,000.00 | Br 1,200.00 |
| 35% on Br 6,000.00 | Br 2,100.00 |
| Income tax | Br 4,950.00 |
| Pension (7% of salary) | −Br 1,400.00 |
| Net salary | Br 13,650.00 |
2026 · Rates and rules read from the sources listed on this page (the earliest on 17 Oct 2026); they may have changed since.
Type your monthly salary in birr.
Add the taxable part of any allowances.
Read the income tax, the 7% pension and the net salary.
Open the Working tab to see the tax in each band.
This calculator turns an Ethiopian monthly salary into employment income tax, pension and net salary, using the Income Tax (Amendment) Proclamation No. 1395/2025 published by the Ministry of Revenue and the pension rates of the Private Organization Employees' Social Security Administration (POESSA).
The rates. The proclamation's new Article 11 sets the monthly rate of employment income tax, applicable on income derived from 8 July 2025:
| Monthly income (Br) | Rate |
|---|---|
| 0 to 2,000 | 0% |
| 2,001 to 4,000 | 15% |
| 4,001 to 7,000 | 20% |
| 7,001 to 10,000 | 25% |
| 10,001 to 14,000 | 30% |
| over 14,000 | 35% |
Each rate applies to the part of income inside its band, which is the same as the payroll shortcut "rate times income less a deduction": less Br 300 at 15%, Br 500 at 20%, Br 850 at 25%, Br 1,350 at 30% and Br 2,050 at 35%.
Pension. POESSA sets the private-sector pension at 18% of the monthly salary: 7% from the employee and 11% from the employer. Allowances are not salary, so they are taxed but carry no pension.
A worked example. Br 20,000 a month: tax 35% of 20,000 less 2,050 = Br 4,950; pension Br 1,400; net salary Br 13,650. The employer adds Br 2,200 of pension.
Not included. Exempt allowances (type only the taxable part), the public servants' pension scheme, income other than employment and graduate cost-sharing. An estimate, not tax advice.
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Proclamation 1395/2025 replaced Article 11 with new monthly rates: 0% up to Br 2,000, 15% from Br 2,001 to 4,000, 20% to 7,000, 25% to 10,000, 30% to 14,000 and 35% over Br 14,000. The rates apply on employment income derived from 8 July 2025.
The first Br 2,000 of monthly employment income is taxed at 0% under the rates of Proclamation 1395/2025. A salary of Br 2,000 or less therefore pays no income tax, though the 7% pension contribution still applies to the salary of a private-sector employee.
POESSA sets the private-sector pension at 18% of the monthly salary: 7% deducted from the employee and 11% paid by the employer. On a Br 20,000 salary that is Br 1,400 from the employee and Br 2,200 from the employer. Allowances that are not salary carry no pension.
Payroll often writes the bands as rate times income less a fixed deduction: 15% less Br 300, 20% less Br 500, 25% less Br 850, 30% less Br 1,350 and 35% less Br 2,050. The result equals taxing each band at its own rate, which the Working tab shows line by line.
Br 20,000 a month pays Br 4,950: nothing on the first Br 2,000, then Br 300, Br 600, Br 750 and Br 1,200 in the middle bands, and Br 2,100 at 35% on the Br 6,000 above Br 14,000. With 7% pension of Br 1,400 the net salary is Br 13,650.
Taxable allowances count as monthly income from employment and are taxed at the same Article 11 rates as the salary. Type only the taxable part of any allowance in the allowances box. The pension, by contrast, is worked out on the salary alone, so allowances raise the tax but not the pension.
Rates and rules change; check the source before you rely on a figure.
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