This study aimed to obtain empirical evidence on the effects of Islamic Business Etics Principles application on Employee's Welfare. This study was conducted in Micro, Small, and Medium Enterprises (MSMEs) in Karanganyar, Central Java, Indonesia. The paradigm used in this study was positivistic with hypothesis testing, while the analysis is conducted with Multiple Linear Regression. The results of this study concluded that Islamic Business Etics affects Employee's Welfare. Partially, several indicators such as Siddiq, Amanah, and Istiqomah affect employee's welfare in MSMEs in Karanganyar, Central Java, while for the indicators such as Tabligh, Fathanah, and Qana'ah does not affect employee's welfare. Therefore, sugesstions for the next reseach are (1) to add MSMEs' owner as subject of the reseach in order to obtain detailed information about the employees' welfare, and (2) qualitative research methods can be used to obtain a more detailed and profound information about employees' understanding and experience in the implementation of Islamic Business Etics Principles.