Mereja.Forum

Addis Abeba – The Federal Civil Service Commission has announced a major salary adjustment for civil servants, effective September 2025. Under the revised pay scale, the entry-level salary for bachelor’s degree holders will increase from 6,940 (≈ US$ 49. 34) birr to 11,500 birr (≈ US$ 82) per month.

In a statement released today, the commission said the adjustment is part of the government’s ongoing effort to ease the burden of rising living costs “within the country’s financial capacity.” It noted that civil servants have continued to deliver essential services despite economic pressures, a factor that prompted the latest revision.

The new scheme also raises the minimum salary for government employees from 4,760(≈$35) birr to 6,000(≈$44) birr, while the maximum salary will nearly double, rising from 21,492(≈$158) birr to 39,000(≈$286) birr. Salaries in sectors outside the civil service will also be revised, the commission added.

According to official figures, the adjustment will require an additional 160 billion birr, raising the government’s total annual salary expenditure to 560 billion birr.

This comes a year after the government introduced a previous salary adjustment in response to cost-of-living spikes following reforms to Ethiopia’s foreign currency management system in August 2024.

The 2024 wage revision in which the government raised salaries for lower-paid civil servants by as much as 300%, part of a broader package of macroeconomic reforms designed to cushion workers from rising living costs.

According to the Civil Service Commission, the new measure will add 160 billion birr to the state payroll, pushing annual salary expenditure to 560 billion birr. The announcement comes as Ethiopia continues to grapple with nearly 20% inflation and a budget deficit projected at 2.5% of GDP for the current fiscal year.

The revision also coincides with the implementation of the 2025 income tax reform, which raised the tax-free threshold for employment income to 2,000 birr per month, up from 600 birr.

Labor unions have repeatedly pressed for broader reforms, including the introduction of a national minimum wage and a higher income tax threshold. The Confederation of Ethiopian Trade Unions (CETU) has recommended exempting workers earning up to 8,300 birr per month from income tax, citing international standards that set the minimum wage floor at the equivalent of $64 per month.

Parliament, however, rejected the proposal when it approved the revised income tax proclamation earlier this year. The amended law raised the tax-free threshold from 600 birr to 2,000 birr and adjusted the top bracket for the 35% rate from 10,900 birr to 14,000 birr, while also increasing the initial income tax rate from 10% to 15%.

Although officials described the reform as a step to “reduce the tax burden on low-income groups,” CETU and labor advocates criticized it as insufficient. CETU President Kassahun Follo said at the time: “You don’t collect tax from a person who can’t live and who doesn’t eat… A person cannot work and be productive while they are hungry.”

Responding to such criticisms, Mulay Woldu, Head of the Tax Policy Department at the Ministry of Finance, said the threshold was based on state capacity, not need: “Our measurement is not based on desire, but on capacity. There is no value in inflating numbers when the capacity to pay is low.”

Last year, Ethiopia’s debate over a national minimum wage gained renewed momentum with the release of a study by the International Labor Organization (ILO).

The study found that the median monthly wage in Ethiopia is just 3,000 birr (around $52), a level it linked to widespread worker dissatisfaction. Nearly half (48%) of employees in foreign-owned apparel factories reportedly quit their jobs due to poor pay, underscoring the scale of the problem.

Guillaume Delautre, an ILO Wage Specialist, noted that low wages are a key driver of Ethiopia’s exceptionally high labor turnover, forcing firms to spend heavily on recruitment and training. He recommended the introduction of minimum wage legislation as a corrective measure.

Parliament approved a revised labor proclamation in 2019 that legally established a minimum wage board tasked with setting and reviewing wage floors, but the mechanism has yet to be fully implemented.