Pay and rights · 5 min read
Overtime calculation in Ethiopia: the formula, rates and examples
Overtime is your hourly rate times 1.5 by day, 1.75 at night, 2 on your rest day and 2.5 on a public holiday. Here's the formula with worked sums.
Overtime pay in Ethiopia is your ordinary hourly rate times 1.5 for daytime hours, 1.75 for night hours, 2 on your weekly rest day and 2.5 on a public holiday. On a basic pay of 10,400 Birr and a 48 hour week, your hourly rate is 50 Birr, so one night hour pays 87.50 Birr. These are the lowest rates the Labour Proclamation allows. A contract or collective agreement can pay more.
The overtime formula
Overtime pay = your basic monthly pay / your hours in a month x the rate x the overtime hours. The law gives no fixed monthly divisor. So we use your weekly hours x 52 weeks / 12 months, which is 208 hours at the legal maximum of 48 a week. If your employer uses another figure, ask which one and why.
6 a.m. to 10 p.m.: 1.5 times, 75.00 Birr an hour 10 p.m. to 6 a.m.: 1.75 times, 87.50 Birr an hour Your weekly rest day: 2 times, 100.00 Birr an hour A public holiday: 2.5 times, 125.00 Birr an hour
Example: one month of mixed overtime
Say your basic pay is 10,400 Birr and you work 48 hours a week. In one month you do 10 daytime hours, 6 night hours and 4 hours on your rest day.
Hours a month: 48 x 52 / 12 = 208 Hourly rate: 10,400 / 208 = 50 Birr 10 day hours: 10 x 50 x 1.5 = 750 6 night hours: 6 x 50 x 1.75 = 525 4 rest day hours: 4 x 50 x 2 = 400 Overtime pay = 1,675 Birr
Your weekly hours change the answer. On a 40 hour week, the same 10,400 Birr gives 173.33 hours a month and a rate of 60 Birr, so a daytime overtime hour pays 90 Birr. That's why it's worth checking the hours in your contract. Our overtime calculator lets you change them.
How much overtime is allowed, and can you say no?
Normal hours can't go over 8 a day or 48 a week (Article 61). Overtime can't go over 4 hours in a day or 12 hours in a week (Article 67(2)). You'll see other limits online, but these are the ones in the law.
You can't be compelled to work overtime. The law allows it only where the employer has no other way and there's an accident, actual or close at hand, force majeure, urgent work, or an absent worker to replace on work that runs without a break (Article 67(1)).
Public holidays have two rates
Article 75 pays your hourly wage times 2 for each hour of work on a public holiday. Article 68 pays times 2.5 for overtime on a public holiday. The way we read them, normal hours worked on the holiday go under Article 75, and hours on top of those go under Article 68. If you're paid by the month and don't work on the holiday, you lose nothing for it (Article 74). The law doesn't spell out how Article 75 sits beside a monthly salary, so ask your payroll office how it pays those hours.
Overtime and your tax
Overtime is added to your pay for the month and taxed in the same table. Pension doesn't change, because it's worked on regular hours only.
Taxable pay: 23,000 Tax: 23,000 x 35% - 2,050 = 6,000 Pension: 7% of 20,000 = 1,400 You keep: 23,000 - 6,000 - 1,400 = 15,600 Without the overtime you keep 13,650. So 3,000 of overtime puts 1,950 in your hand.
When it's paid, and how long you have to claim
Overtime is paid with your wages on pay day (Article 68(2)). If it isn't paid, ask in writing and keep a record of your hours. Don't wait: a claim for wages or overtime is barred after six months from when it fell due (Article 163(3)). Disputes on hours and pay go to the labour division of the first instance court (Article 139).
Who these rules don't cover
The Labour Proclamation doesn't apply to managerial employees, personal service contracts, the armed forces, the police, state administration staff, judges and prosecutors, or people working for themselves (Article 3). Ethiopian staff of foreign missions and international organisations are covered unless a regulation or treaty says otherwise. This page explains the law, and it isn't legal advice.
Sources and further reading
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Frequently asked questions
What is the overtime rate in Ethiopia?
At least 1.5 times your hourly rate from 6 a.m. to 10 p.m., 1.75 times from 10 p.m. to 6 a.m., 2 times on your weekly rest day and 2.5 times on a public holiday.
How do I get my hourly rate from a monthly salary?
Divide your basic monthly pay by your monthly hours. The law gives no divisor, so we use weekly hours x 52 / 12, which is 208 at 48 hours a week.
What's the most overtime I can work?
4 hours in a day and 12 hours in a week, under Article 67(2) of Labour Proclamation 1156/2019.
Can I get time off in place of overtime pay?
The law states overtime as a payment on top of your normal wage and doesn't set out time off in its place. Check your contract or collective agreement.