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Tanzania, like any other country, has particular standards in place for foreign nationals planning to travel within its boundaries. Foreigners can get a number of visas, the most popular of which are as follows:
Tourist/ordinary visa: This visa permits tourists and other visitors to enter Tanzania through approved border entry points.
Business visa: This visa is for foreigners who want to invest in Tanzania and need to come for connected reasons such as making professional contacts and performing feasibility studies.
Multiple-entry visa: Tanzanian officials give this visa to foreigners who need to visit the nation on a regular basis, usually for business or investment interests. This visa has a validity period ranging from one month to one year.
Transit visa: This visa permits travellers to transit through Tanzania on their way to another destination without stopping.
Diplomatic visa: A diplomatic visa is required for diplomats and other officials traveling to Tanzania on official business.
Tanzania also provides three types of work and residence permits in addition to these visas:
Foreign investors can get Class A permits.
Class B licenses are issued to foreign personnel with particular capabilities who are filling a post for which there are no qualified Tanzanians.
Class C licenses are available for missionaries, volunteers, students, researchers, and others.
In Tanzania, the majority of employees will require a Class B work visa.
There is no explicit provision in the Labour Act about maximum duration of probation period.
However, by stating that a worker with less than 6 months of employment may not file an unjust termination claim against the employer, this statute tacitly necessitates a 6-month probationary period.
After providing appropriate notice or paying in lieu of notice, any party may cancel the employment contract. The required notice time for ending an indefinite term contract is determined by the worker’s length of service and is as follows:
7 days for services lasting one month or less;
4 days for a person who is working on a daily basis; and
28 days for a worker who is paid on a monthly basis.
A lengthier notice time may also be agreed upon if it is equal between the worker and the employer. The notice of termination must be in writing and include the grounds for the termination as well as the date on which the notice is issued.
The monthly minimum salary ranges from 40,000 Tanzanian shillings to 400,000 shillings. Tanzania’s minimum wage was last adjusted on January 1, 2013.
Tanzania’s annual minimum salary is $1,593.00 in foreign currency.
The maximum number of regular working hours that an employee is permitted by law to work is forty-five (45) hours per week, or nine (9) hours per day. The nine hours do not include the one-hour weekday lunch break. After five hours of uninterrupted labour, a lunch break has to be offered. Lunch breaks are unpaid and are taken on the employee’s own time because they are not compensated for them. Overtime hours must be rewarded for any hours worked in excess of 45. It is also against the law for an employee to work more than twelve hours every day.
An employee is authorized to work six days each week, with the seventh day being a rest day.
Workers may be asked to perform overtime, or labour outside of normal working hours, but not more than 12 hours each day or 50 hours in a four-week cycle, unless an emergency arises.
A contractual agreement may demand or let a person to work up to twelve hours in a day, including any meal intervals, without being paid for overtime. However, such an agreement may not compel or authorize a person to work more than 5 days and 45 hours per week, plus 10 hours of overtime.
If a worker works longer than the specified working hours, he or she is entitled to overtime compensation at one and a half times (1.5 of X or 150 percent) the rate of her or his regular pay.
There is no explicit mention of a non-compete clause in the Law in Tanzania. Unless a legitimate non-compete provision is signed in a contract between both parties, the employee is free to compete fairly with their previous employer.
Severance pay shall be paid upon termination of employment if the employee has completed 12 months of continuous service with the employer; however, it shall not be paid to an employee whose termination is fairly done on grounds of misconduct, capacity, compatibility, or operational requirements of the employer but who refuses to accept alternative employment with that employer or any other employer.
The employer is required by law to provide the employee severance pay equal to seven days’ basic wage for each completed year of continuous employment with that employer, up to a maximum of 10 years.
In general, Tanzanian labour rules allow for the termination of employment. Either of the parties to the employment contract may end such a contract if she or he follows all officially stated reasons for termination and required processes. Termination can be either fair (when done in accordance with the law) or unfair (when done in violation of the law).
Section 68 of the Employment and Labour Relations Act of 2004 states that “any labour matter” may be negotiated, whereas Section 4 of the Act defines a labour matter as “any subject connected to employment or labour relations.” Rule 55 specifies the following bargaining issues:
Wages
Employment terms and conditions, as well as allowances
Policy and practice-related issues such as: Recruiting, appointing, transferring, and suspending
Health concerns/benefits
Employment training, disciplinary action, and termination
Relationship-related issues such as: Organizational rights, negotiation, and conflict resolution processes
Grievance processes, as well as any other matters agreed upon by the parties.
Negotiated terms and conditions of service supersede the terms and conditions of employment under individual employment contracts.
CMA- Commission for Mediation and Arbitration
The Employment and Labour Relations Act of 2004 mandates yearly leave after a year of continuous service with an employer. A worker is entitled to 28 days of paid yearly vacation, which includes any public holidays that may fall within the leave period. The yearly leave may be decreased by the number of days provided as paid occasional leave by the employer with the worker’s approval within a leave cycle.
Under the Employment and Labour Relations Act, a worker with less than six months of employment is not entitled to paid leave, unless the person is hired on a seasonal basis or has worked for the company more than once in a year.
Employees have the right to 126 days of sick leave every year. Employees receive full compensation for the 63 days of paid leave and 50% pay for the remaining days.
The Employment and Labour Relations Act of 2004 provides for and regulates maternity leave.
Female employees are entitled to at least twelve weeks (84 days) of fully paid maternity leave or 100 consecutive days (in the case of multiple births) throughout a 36-month leave cycle. If a new-born dies within a year of birth, a worker is entitled to 84 days of paid maternity leave within a leave cycle.
Pregnant employees must tell their employers and present a medical certificate three months before taking maternity leave. She may begin maternity leave four weeks before the planned date of delivery, or sooner if a medical practitioner certifies that it is required for the worker or her child.
Men have the right to 3 days of paid paternity leave.
There is no explicit information available online about any family leave.
Tanzania has a total of 17 public holidays which are paid.
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Unemployment benefit: For up to six months in any 12-month period, 33.3 percent of the insured’s final monthly wages are paid. Individuals may obtain unemployment benefits for up to 18 months during their working lives.
Unemployment grant: A lump sum payment of up to 50% of total employee and employer payments to the social insurance scheme may be made.
The Compensation Act was enacted to compensate employees who were wounded or were handicapped on the job.
While private-sector businesses must contribute 1% of their employees’ gross monthly income, public-sector employers must contribute 0.5% of their employees’ monthly wage.
The National Social Security Fund (NSSF) is a state-run social security system to which all private-sector employers are required to participate. The employer’s contribution is 20% of the employee’s cash pay; however, the employer has the right to collect up to half of this amount from the employee.
The Public Service Social Security Fund (PSSSF) plan, which is a specific fund for employers and workers in the public sector, has similar contribution rates. The employer and employee contributions to the PSSSF program are 15% and 5%, respectively.
Pensions for the elderly (public and private sector programs): At the age of 60, you must have made at least 180 months of contributions. The contribution need is decreased for employees who get insured later in life, ranging from 165 months (if 45) to 45 months (if 55 to 59).
Employment must be terminated.
Early retirement: At the age of 55, with at least 180 months of contributions. The early pension must be equal to or more than the monthly minimum old-age pension.
The minimum monthly old-age pension is 40% of the legally mandated monthly minimum salary.
Depending on the economic sector, the legal monthly minimum salary ranges from 100,000 to 400,000 shillings.
Pension deferral: The pension may be postponed. There is no upper age limit.
Medical Aid is a private option and is based on an employee voluntary basis to sign up or for the employer to offer it.
There is no private workers compensation yet in Tanzania.
There are no private pension options yet in Tanzania.
Private health care is available in Tanzania but options are limited (facility wise) and it is recommended to get the full comprehensive cover as the operation or surgeries can become very expensive due to limited resources.
Private life insurance is available in Tanzania.
Tax year runs from January 1st to December 31st.
The local currency is TZS in Tanzania. For resident people, the top marginal tax rate is 30%. Non-resident persons are taxed at a fixed rate of 15% on work income, which is the ultimate tax in Tanzania.
Taxable Income | Rates of Taxes |
0-270 000 | 0% |
270 000 – 520 000 | 8% |
520 000 – 760 000 | 20% |
760 000 – 1 000 000 | 25% |
1 000 000 + | 30% |
Taxes are levied on income earned during the calendar year. The tax will be assessed on the income received for the year in the case of irregular income. Tanzania’s tax system includes both direct and indirect taxes such as income tax, VAT, import duty, excise duty, and stamp duty. Taxation is also levied at the municipal government level. Tanzania Revenue Authority is in charge of all central government taxes (TRA).
Tanzania has multiple double taxation agreements.
An individual is considered to be a Tanzanian resident in any tax year if he or she I has a permanent home in Tanzania and visits the country during the year, or (ii) does not have a permanent home but is present in the country for 183 days in the year or an average of 122 days per year in the relevant year and the two preceding years.
A resident individual can claim a tax credit for any income tax paid in another nation on income earned in that other country. This credit cannot be greater than the Tanzanian tax rate on such income. Any unused portion of a foreign tax credit can be carried forward. It is also possible to choose to claim relief as a cost rather than a credit.
In Tanzania, there are no additional substantial tax advantages or incentives for individuals.
The National Health Insurance Fund (NHIF) was formed with the primary goal of giving Central Government Personnel access to health care services. The Fund Act was extended further to cover private sector organisations and individuals who join the fund on a voluntary basis.
Contributions to the Scheme are generally decided by a prospective member’s capacity to pay and are not affected by the risk profile, gender, or historical usage rate (s). The initial NHIF Act specified that 6% of monthly basic pay be split between employer and employee as contributions, and further arrangements were made for students, clergy, organizations, private sectors, people, and other public servants.
Unemployment benefit:
For up to six months in any 12-month period, 33.3 percent of the insured’s final monthly wages are paid. Individuals may obtain unemployment benefits for up to 18 months during their working lives.
Unemployment grant:
A lump sum payment of up to 50% of total employee and employer payments to the social insurance scheme may be made.
The National Social Security Fund (NSSF) is a state-run social security system to which all private-sector employers are required to participate. The employer’s contribution is 20% of the employee’s cash pay; however, the employer has the right to collect up to half of this amount from the employee.
The Public Service Social Security Fund (PSSSF) plan, which is a specific fund for employers and workers in the public sector, has similar contribution rates. The employer and employee contributions to the PSSSF program are 15% and 5%, respectively.
Salary, earnings, bonuses, overtime pay, taxable benefits, allowances, and certain lump sum perks are examples of remuneration (revenue from employment). Profits or losses made by a company or trade. Income or profits derived from an individual’s status as a trust beneficiary.
In addition to wages or salaries, businesses may offer bonuses or gratuities to their employees as part of an incentive package. However, under the Employment Act, these are not legally required payments (other than in the Income Tax, Chapter 332, Revised Edition 2019 of the laws of Tanzania where they are taxable).
In Tanzania, there are no personal allowances.
These are non-cash perks provided by the company to employees. Benefits in kind are quantified according to the regulations and are included in an employee’s taxable income. They are quantifiable according to the following rules:
Provision of Premises/Housing to an Employee:
A benefit in kind connected to premises/housing is defined as the lesser of the premises’ Market Value Rent and the greater of the following:
15% of the employee’s total yearly salary and the expense claimed as a deduction by the employer for the premise.
Provide an employee with a motor vehicle
The motor vehicle benefit is not applicable if the employer does not claim a deduction for the vehicle’s ownership, maintenance, or operation.
Granting a loan to an employee
When an employer makes a loan to an employee at a lower interest rate than the statutory rate, the amount of benefit in kind is calculated as the difference between the following:
The amount of interest that would have been paid if the interest on the loan had been levied at the statutory rate, less the amount of interest paid on the loan at the supplied rate.
*Exception:
When an employer gives a loan with a duration of less than twelve months and the total amount of the loan and comparable loans outstanding at any point during the previous twelve-month period does not exceed three months’ basic pay of an employee, the benefit in kind is nil.
Other in-kind benefits
The market value will be used to determine additional in-kind benefits.
Dividend income is taxed by WHT, which is a final tax. The regular rate is 10%, although dividends paid by publicly traded corporations are taxed at a lower rate of 5%.
Dividend income from non-resident corporations is taxed at a rate of 10% if paid to a resident individual (and not in the nature of business income). On the dividend, a tax credit for foreign income tax can be claimed.
Interest paid to an individual (unless it is in the nature of business income to the individual) is classified as a final withholding payment, implying that the WHT is a final tax.
Pensions for the elderly (public and private sector programs): At the age of 60, you must have made at least 180 months of contributions. The contribution need is decreased for employees who get insured later in life, ranging from 165 months (if 45) to 45 months (if 55 to 59).
Employment must be terminated.
Early retirement: At the age of 55, with at least 180 months of contributions. The early pension must be equal to or more than the monthly minimum old-age pension.
The minimum monthly old-age pension is 40% of the legally mandated monthly minimum salary.
Depending on the economic sector, the legal monthly minimum salary ranges from 100,000 to 400,000 shillings.
Pension deferral: The pension may be postponed. There is no upper age limit.
The National Health Insurance Fund (NHIF) was formed with the primary goal of giving Central Government Personnel access to health care services. The Fund Act was extended further to cover private sector organisations and individuals who join the fund on a voluntary basis.
Contributions to the Scheme are generally decided by a prospective member’s capacity to pay and are not affected by the risk profile, gender, or historical usage rate (s). The initial NHIF Act specified that 6% of monthly basic pay be split between employer and employee as contributions, and further arrangements were made for students, clergy, organizations, private sectors, people, and other public servants.
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For resident people, the top marginal tax rate is 30%.
Non-resident persons are taxed at a fixed rate of 15% on work income, which is the ultimate tax in Tanzania.
Individuals with a company revenue of less than 100 million Tanzanian shillings (TZS) per year are subject to presumptive income tax rates.
When investment income reflects a ‘final withholding payment,’ the appropriate tax rate is the relevant withholding tax (WHT) rate. The disposition of an investment with a Tanzanian source is taxed at a rate of 10% if sold by a resident and 30% if disposed of by a non-resident. The sale of an investment with an overseas source by a resident is taxed at a rate of 30%.
Costs of employment
The employee’s statutory social security payment is the sole amount deducted from work income (e.g. to the NSSF).
Allowances for personal expenses
In Tanzania, there are no personal allowances.
Tax breaks for businesses
Individuals may claim a deduction for costs incurred entirely and solely in the development of revenue through business or investment, subject to certain restrictions.
Retirement fund is 40% of the legally mandated monthly minimum salary. There is also the National Health Insurance Fund (NHIF) which specifies that 6% of the monthly basic be split between employer and employee.
Unemployment benefit: For up to six months in any 12-month period, 33.3 percent of the insured’s final monthly wages are paid. Individuals may obtain unemployment benefits for up to 18 months during their working lives.
Unemployment grant: A lump sum payment of up to 50% of total employee and employer payments to the social insurance scheme may be made.
The National Social Security Fund (NSSF) is a state-run social security system to which all private-sector employers are required to participate. The employer’s contribution is 20% of the employee’s cash pay; however, the employer has the right to collect up to half of this amount from the employee.
The Public Service Social Security Fund (PSSSF) plan, which is a specific fund for employers and workers in the public sector, has similar contribution rates. The employer and employee contributions to the PSSSF program are 15% and 5%, respectively.
The Compensation Act was enacted to compensate employees who were wounded or were handicapped on the job.
While private-sector businesses must contribute 1% of their employees’ gross monthly income, public-sector employers must contribute 0.5% of their employees’ monthly wage.
When investment income reflects a ‘final withholding payment,’ the appropriate tax rate is the relevant withholding tax (WHT) rate. The disposition of an investment with a Tanzanian source is taxed at a rate of 10% if sold by a resident and 30% if disposed of by a non-resident. The sale of an investment with an overseas source by a resident is taxed at a rate of 30%.
Retirement fund is 40% of the legally mandated monthly minimum salary.
There is also the National Health Insurance Fund (NHIF) which specifies that 6% of the monthly basic be split between employer and employee.
Unemployment benefit: For up to six months in any 12-month period, 33.3 percent of the insured’s final monthly wages are paid. Individuals may obtain unemployment benefits for up to 18 months during their working lives.
Unemployment grant: A lump sum payment of up to 50% of total employee and employer payments to the social insurance scheme may be made.
The Public Service Social Security Fund (PSSSF) plan, which is a specific fund for employers and workers in the public sector, has similar contribution rates. The employer and employee contributions to the PSSSF program are 15% and 5%, respectively.
The Compensation Act was enacted to compensate employees who were wounded or were handicapped on the job.
While private-sector businesses must contribute 1% of their employees’ gross monthly income, public-sector employers must contribute 0.5% of their employees’ monthly wage.
Tanzania has a national health insurance program that is mandatory for all residents who are fully employed.
Here are examples of some benefits:
Paid parental leave is available.
Plans for private health insurance
Car, phone, health insurance, housing, or education stipends
Paid time off in addition
Performance-based incentives
Many benefits are likely to be included in your Tanzanian benefits management plan, but we recommend starting with those that are legally guaranteed. For example, the country observes 17 national holidays, and employees should be entitled to paid time off on those holidays. In most cases, all employees are entitled to at least 28 days of paid yearly leave. In Ghana, most female employees are entitled to at least 12 weeks of paid maternity leave. There is also 3 days of paternity leave.
Employment and Labour Relations Act, 2004
Tanzania Revenue Authority
This information is provided solely for informational purposes and should not be used as a substitute for professional advice in any jurisdiction. You should hire your own legal, tax, and accounting professionals as part of your worldwide payroll needs.
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