Eritrea's employment income tax is administered by the Ministry of Finance's Tax Administration and calculated on a monthly basis. The employee's mandatory social security contribution (3%) is deducted from gross monthly salary before income tax bands are applied. Eritrea has seven progressive monthly bands from 0% on the first ERN 600/month to a maximum 30% above ERN 60,000/month. Eritrea uses the ERN (Eritrean Nakfa), pegged to the US Dollar.
Eritrea's social security covers employees through a mandatory contribution of 3% of gross salary, which is fully deductible from gross pay before income tax is computed. Employers pay an additional 11% of gross salary, for a combined rate of 14%. There is no cap on social security contributions. The system covers pensions, disability, and work-related accidents. Eritrea's social security framework operates under the Ministry of Labour and Human Welfare.
The seven monthly income tax bands: 0% on first ERN 600; 2% on ERN 600–1,500; 5% on ERN 1,500–6,000; 10% on ERN 6,000–15,000; 15% on ERN 15,000–36,000; 20% on ERN 36,000–60,000; and 30% above ERN 60,000/month. Employers withhold and remit income tax and social security monthly. The ERN is officially fixed to the USD but may trade differently on informal markets.
Eritrea operates a largely state-directed economy with limited private sector activity. Foreign companies operating in Eritrea typically work through joint ventures or service agreements with state entities. Tax rules for expatriates and diaspora remittances may differ. Verify current rates with the Eritrean Ministry of Finance.
