Tanzania

To employ staff in Tanzania, a business must register with:

• Business Registration and Licensing Agency (BRELA)
• Tanzania Revenue Authority (TRA)
• National Social Security Fund (NSSF)
• Workers Compensation Fund (WCF)

A Taxpayer Identification Number (TIN) is mandatory. Companies must obtain a business license and register for PAYE and SDL tax accounts.

Employers must also enrol for Workers Compensation and Occupational Health Safety schemes.

It is not mandatory to make payments to employees and authorities from an in-country bank account, however, the inter-country bank charges for electronic transfers can be quite high.

Payroll must be processed in Tanzanian Shillings and paid through a local bank.

The standard workweek is:

• 8 hours/day
• 45 hours/week (Monday to Friday, half-day Saturday)

The working week in Tanzania is Monday to Friday 0800 – 1700 hours and Saturdays 0800 – 1230 hours. Lunch breaks are between half an hour and one hour long.

Overtime must be paid at:

• 150% of normal pay (weekday overtime)
• 200% (rest day or public holiday)

Employees must receive:

• 1 day of rest per week
• 1-hour break after 5 consecutive hours of work

Employment contracts must be in writing. Probation is allowed for up to 6 months.

The Labour Institutions Act governs employment conditions and compliance.

Personal Income Tax (PAYE)

Progressive tax rates (monthly):

• 0% (up to TZS 270,000)
• 9% (TZS 270,001–520,000)
• 20% (TZS 520,001–760,000)
• 25% (TZS 760,001–1,000,000)
• 30% (above TZS 1,000,000)

PAYE must be withheld and submitted by the 7th of the following month.

A PAYE summary statement is due within 30 days after each six-month period. The penalty for late payment is the statutory rate of the year + 5% of the total outstanding amount.

Social Security Contributions

Employers remit a total of 20% monthly to NSSF.

Workers Compensation Fund (WCF)

• Employer contributes 1% of gross salary
• Due by the 7th of each month

Skills Development Levy (SDL)

• 4% of monthly gross salary
  
  

Paid by employer only

Payroll is processed monthly.

Employers must:

• Calculate gross-to-net salary
• Provide itemised payslips
• Withhold PAYE, NSSF, WCF, SDL
• Submit monthly returns to TRA and social funds
• File annual tax statements (by June 30)

Payslip must show:

• Basic salary
• Allowances
• Deductions
• Net pay

By law, payroll reports must be kept for seven years.

It is legally acceptable in Tanzania to provide employees with online payslips. The payslips must be secured with restricted access.

Payroll 

It is legally acceptable in Tanzania to provide employees with online payslips. The payslips must be secured with restricted access. 

Reports 

By law, payroll reports must be kept for seven years. 

Pay-slip Example

Hiring

When an employee first starts employment with a company, they must be registered with the TRA (Tanzania Revenue Authority) and the pension scheme.

TRA will provide a TIN (Tax Identification Number) and the pension scheme will also provide a scheme number.

All registrations must be made within the first month for the new start commencing work.

A new employee must be registered with the authorities within 80 days from the start date of employment, in which the company has to present its structure to the SII and await authorization to start operations.

The only information that is required for setting up a new start is the employee’s personal data.

Employers must:

• Issue written employment contracts
• Register employee with NSSF and WCF
• Submit notification to TRA for PAYE registration

Required documents:

• ID/passport
• TIN certificate
• Bank account details
• Medical certificate (for hazardous work)

Termination

Notice periods:

• 7 days (casual workers)
• 28 days (monthly contract)
• Negotiable based on contract terms

Termination reasons:

• Redundancy
• Misconduct
• Contract expiry
• Incompetence

Severance Pay:

• 7 days’ salary per completed year of service
• Not payable if terminated for misconduct or by resignation

There are no legislative timescales for an employee’s final payment in Tanzania. The payment timescale will depend on the terms of the employment contract.

Final wages must be paid on or before last working day.

Minimum Wage

Varies by sector (2024 ranges):

• TZS 100,000–400,000/month

Leave

• Annual Leave: 28 calendar days after 12 months’ service
• Sick Leave: 126 days (first 63 on full pay)
• Maternity Leave: 84 days paid (100%), 100 days for twins
• Paternity Leave: 3 days

Maternity Leave (clarified):
An employee is entitled to at least 84 days' paid maternity leave; or 100 days paid maternity leave if the employee gives birth to more than one child at the same time.
An employee may commence maternity leave at any time from 4 weeks before the expected date of confinement.
No employee shall work within 6 weeks of the birth of her child.
An employer is only obliged to grant paid leave for four terms of maternity leave to an employee.

Paternity clarification:
The employee will be entitled to the three days paternity leave irrespective of how many of the employee’s children are born within the same leave cycle.

Sick Leave (clarified):
The sick leave shall be calculated as follows: The first 63 days shall be paid full wages; The second 63 days shall be paid half wages.
An employer shall not be required to pay an employee for sick leave if the employee fails to produce a medical certificate.

Holiday accrual for variable pay:
If the employee receives commissions or variable payments monthly, you have to calculate the average of the three months before holidays and based on this average you calculate the payment.

Public Holidays: 17 days/year

Other benefits:

• Medical cover (not mandatory)
• Meal, housing, and transport allowances (taxable)

End-of-year bonus (not statutory)

Foreign employees require:

• Work Permit (Class B for professionals)
• Residence Permit (from Immigration Services Department)

Steps:

1. Job offer and approval by Labour Commissioner
2. Work permit application (Labour Commissioner)
3. Residence permit application
4. Entry visa and onboarding

Work permit application details:
The application form for this is available from the Department of Immigration (Form TIF.1) at no cost and there is no processing fee.
The application form should be submitted with the following information: five photographs, birth certificate, CV, academic qualifications, proof of experience, organizational chart, offer of employment, proposed contract.

Permit validity:

• Up to 2 years (renewable)
• Class B permits have a fee of US $600 for two years. There is a renewal fee of US $300.

Processing time:

• 4–6 weeks

Employers must justify foreign hire and show skills not locally available.

• Payroll taxes must be paid in TZS from a Tanzanian bank
• Online filing portals: eFiling (TRA), NSSF Portal
• Penalties for late filing range from TZS 225,000 to TZS 450,000
• The Employment and Labour Relations Act applies nationally
• Most offices open Mon–Fri, 8am–5pm
• Payroll software must align with Tanzanian reporting standards
• Electronic payslips are allowed with employee consent

Further Information

For more information, or assistance with Tanzania Tax enquiries please contact: gi@activpayroll.com

About This Payroll and Tax Overview

Please note that this document gives general guidance only and should not be regarded as an authoritative or complete statement of the law, regulations or tax position in any country. You should always seek specific advice for each specific situation. This document should not be relied upon as professional advice and activpayroll accepts no liability for reliance on its contents.