Personal Income or Income from Employment or Payroll Tax: Rate, Exemption
Rates
No | Employment Income /Per-months/ | Tax Rate (%)
| Deduction In Birr | |
| From Birr | To Birr | None | |
1 | 0 | 150 | Exempted (Non-taxable) | |
2 | 151 | 650 | 10 | 15 |
3 | 651 | 1400 | 15 | 47.5 |
4 | 1401 | 2350 | 20 | 117.5 |
5 | 2351 | 3550 | 25 | 235 |
6 | 3551 | 5000 | 30 | 412.5 |
7 | Over 5000 |
| 35 | 662.0 |
Example |
This part is adapted from the Ethiopian Revenues and Customs Authority website: http://www.erca.gov.et/index.php
Every person having income from employment in any government or other private organization or non Governmental organization, such as NGOS, and if his/her is income from employment includes any payments or gain in cash or in kind which he/she receives from employees.Exempted Tax of an Employee Transport Allowance
Transportation allowance of an employee person is exempted when employee and employer have an agreement between them, which their agreement is clearly defined on the contract agreement that the allowance is applied only for transporting purpose.
The exempt transportation allowance from tax doesn't include if the employer arrange or give a vehicle to employee when a person use the vehicle from house to work and from work to house.
The maximum Transportation Allowance Exempted from Tax
Tax exempted for transportation allowance to the employee shall be not more than 800 birr. Also the transportation allowance paid to the employee should be not more than ¼ of his /her salary.
