When and how are salaries prorated in Ethiopia?

In Ethiopia, salary proration is a standard practice used to ensure that employees are fairly compensated for the actual number of days worked within a given month. Proration is necessary when an employee does not work a full month due to reasons such as joining or leaving the company partway through the month, taking unpaid leave, or any other absence.


Calculation Method

The proration of salary in Ethiopia is calculated using the following formula:


Prorated Salary = (Monthly Income / Days in the Month [Calendar Days]) × Days Worked in the Month [Calendar Days]


Explanation of the Calculation:

  • Monthly Income: The total salary an employee would earn for working the full month.

  • Days in the Month (Calendar Days): The total number of days in the specific month (ranging from 28 to 31 days depending on the month).

  • Days Worked in the Month (Calendar Days): The actual number of days the employee was present and worked in that particular month.


Example Calculation

If an employee's monthly income is 30,000 ETB and they worked 15 days in a month with 30 calendar days, the proration calculation would be:


Prorated Salary = (30,000 ETB / 30 days) × 15 days = 15,000 ETB

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