Tanzania: A Guideline to Payroll and Employer of Record

Establish your presence globally with Neeyamo as we help you go beyond borders to manage your international payroll and hire new talent in Tanzania.

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Overview

Tanzania is in East Africa, bordered by the Democratic Republic of the Congo, Burundi, Kenya, Uganda, Mali, Mozambique, and Rwanda. The prominent industries in the country include Agriculture, Manufacturing, Mining, and Services. 

Do your organization’s expansion plans require you to hire employees in Tanzania? Do you lack a physical entity in the country – a key requisite to hire local talent? Neeyamo assists organizations worldwide with onboarding and managing employees in Tanzania -processing payroll, managing local compliance requirements, benefits, and more.  

Tools And Instances

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Global Payroll

Neeyamo’s global payroll solution covering 180+ countries

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Global Work

A tech-based EOR solution to manage your extended workforce

Facts And Stats

Capital

Dodoma 

Currency

Tanzanian shilling 

Official Language

Swahili and English  

Fiscal Year

1 July - 30 June 

Date Format

DD/MM/YYYY

Country Calling Code

+255

Time Zone

East Africa Time (UTC+03:00) 

Global Payroll

Overview

Handling payroll for a widespread workforce can pose a significant challenge for any organization, and the added complication of compliance can make things worse. If companies spend more time processing payroll, it directly impacts day-to-day operations and their overall productivity.

Over the years, Neeyamo has observed these complexities and strived to provide a global payroll solution through a single technology platform - Neeyamo Payroll

Payroll Taxes

Payroll tax is the percentage amount retained from an employee's salary and paid to the government to invest in the general population's welfare. These are statutory in nature and are levied from both the employer and employee. Additional statutory contributions are made by employers towards aiding both short-term and long-term benefits for their employees.

Employee Taxes

The employee taxes in Tanzania are computed as follows: 

  • 10.00% - National Social Security Fund  
  • When applicable - Higher Education Student Loan Board  
  • 10.00% - Total Employee Cost  

The employee income taxes are computed in the following categories:

Mainland: 

0.00 TZS-270,000 TZS 0% 
270,001 TZS- 520,000 TZS 9% 
520,001 TZS-760,000 TZS 20.00% on the excess of 520,001 TZS + 22,500 TZS 
760,001 TZS- 1,000,000 TZS 25.00% on the excess of 760,001 + 70,500 TZS    
1,00,001 TZS and over 30.00% on the excess of 1,000,001 TZS + 130,500 TZS

 

Zanzibar:

0.00 TZS - 180,000 TZS 0%
180,001 TZS- 360,000 TZS 9%
360,001 TZS-540,000 TZS 20.00% on the excess of 360,001 TZS + 16,200 TZS 
540,001 TZS- 720,000 TZS 25.00% on the excess of 540,001 + 52,200 TZS 
720,001 TZS and over 30.00% on the excess of 720,001 TZS + 97,200 TZS 

 

Employer Taxes

The employer taxes in Tanzania are computed as follows: 

  • Skills Development Levy - 4.00%

  • Workers Compensation Fund - 1.00%

  • Workers Compensation Fund - 10.00%

  • Total Employment Cost - 15.00%

Payroll Cycle

Overview

Undoubtedly, payroll is a critical process for any organization. Pay cycle in Tanzania refers to the period for which an organization pays its employees, and this can vary depending on the pay frequency that the organization chooses to adopt.

Frequency

In Tanzania, employees can be paid daily, weekly, bi-monthly, or monthly. Employees who are paid monthly receive their salary by the end of the month. 

13th Month Cycle

There are no provisions in the law regarding 13th salaries. 

Global Work

Overview

An Employer of Record (EOR) service provider helps you eliminate the hassle of handling complexities while onboarding a new employee in an international location. They help bridge the gap that otherwise mandates organizations to have a local registered entity and a local bank account, prior to making a job offer to an international hire.

An EOR service provider acts as a legal employer, facilitates salary payments, and manages other statutory requirements such as health insurance, payroll taxes, and employee benefits ensuring compliance with local tax laws and regulations.

This allows organizations to focus on collaborating with the employee in Tanzania for operational tasks, with the knowledge that they have a cost-effective solution support their global payroll & HR requirements, as they continue their global expansion.

HR Mandates and Practices

Minimum Wage

The monthly minimum wage varies by industry, from 40,000 TZS for domestic workers, TZS to 400,000 TZS for sectors such as financial services, telecommunication, and international companies. 

Overtime

Overtime must be agreed upon between the employee and employer. However, the total number of hours a day cannot exceed 12 hours.   

In addition, overtime is limited to 50 hours in a 4-week period, and is paid at least 150% of the regular pay rate.   

The pay rate for work on public holidays is 200% of the regular pay. 

Data Retention Policy

Employers must maintain all tax and pay-related documents for a minimum of five years.  

Employers must keep information on remuneration and benefits for five years after the employee's termination. 

Hiring and Onboarding Requirements

Hiring

A new employee must be registered with the authorities within 80 days of the employee's start date. The company has to present its structure to the SII and await authorization to start operations.  

The following information is required to set up a new start: –  

  • Full Name 
  • RUT  
  • Date of Birth  
  • Address  
  • Salary  
  • Pension Insurance  
  • Health Insurance  
  • Other information about hiring 

Onboarding

Mandatory Documents: Expat employee  

  • Valid Passport and visa  
  • Six Passport size photographs  
  • Birth Certificate for all family members.  
  • Copy of the labour/tenancy contract  
  • Educational Degree certificates   
  • Professional qualification Certificates  
  • Medical Card/Health Screening tests  
  • National ID Card  

Optional Documents: Expat employee  

  • Pay slip  
  • Clear passport copies  
  • Travel Insurance  
  • Driving License  
  • Divorce Certificate (If applicable)  
  • Married Certificate (If applicable)  

 Mandatory Documents: Local employee  

  • Valid Passport and visa  
  • Six Passport size photographs  
  • Copy of the labour/tenancy contract  
  • Educational Degree certificates   
  • Professional qualification Certificates  
  • Medical Card/Health Screening tests  
  • Marriage Certificate (If applicable)  

Optional Documents: Local employee  

  • Birth Certificate  
  • Home Country national identity card  
  • Married Certificate  
  • Pay slip 

Probation

The probation period in Tanzania is not outlined in the law. However, the law states that an employee cannot claim unfair dismissal if terminated within the first six months of employment. 

Leave

Public Holidays

There are 15 public holidays in Tanzania.  

  • Jan. 1: New Year's Day
  • Jan. 12: Revolution Day
  • Apr. 7: Karume Day
  • Apr. 2: Good Friday  
  • Apr. 10: Easter Monday
  • Apr. 21: Eid al-Fitr
  • Apr. 26: Union Day
  • May 1: Labour Day
  • Jul. 7: Saba Saba Day
  • Aug. 8: Nane Nane Day
  • Sept. 26: Prophet Muhammad's Holiday
  • Oct. 14: Nyerere Day
  • Dec. 9: Independence Day
  • Dec. 25: Christmas Day
  • Dec. 26: Boxing Day

Sick Leave

Employees are entitled to 126 days of paid sick leave within a 36-month cycle. The first 63 days of sick leave are paid at 100% of the regular salary and, after that, 50% of the regular salary.   

To be entitled to sick leave and pay, the employee must provide a medical certificate. 

Maternity Leave

Mothers are entitled to 84 days of paid maternity leave. For the birth of more than one child, the entitlement is 100 days of paid maternity leave.   

The mother must inform her employer at least three months from the expected due date. 

Paternity Leave

Fathers are entitled to 3 days of paid paternity leave within the first seven days of the child's birth. 

Other Leave

  • Family care leave  

  • Jury Duty Leave & Voting Leave  

  • Bereavement Leave  

  • Military Leave 

Termination

Notice Period

  • During the first month of employment - 7 days' notice   
  • For an employee who is employed on a daily or weekly basis – 4 days   
  • For an employee who is employed on a monthly basis - 28 days  
  • It is also possible to pay the employee in lieu of notice. 

Severance Pay

To be eligible for severance pay, the employee must have worked for at least 12 months. Severance pay is equal to 7 days' pay for every year of employment and is capped at 10 years. 

Visa

Overview

To work in Tanzania as a third-party national, a work permit and residence permit must be obtained.

Class A: For third-party national employees who want to invest in the industry, mining, forest, social services, and business.

Class B: Foreigners employed by a company or institution with a desired profession.

Class C: For missionaries, students, and volunteers, residence permits must be applied for through the Directory of Immigration Services.

Visa Requirements

The employer must submit the employee's application to work in Tanzania. A filled-out application form, passport copy, passport photos, bank information proof, signed employment contract, curriculum vitae copy, and academic records.   

Once everything has been submitted, and an application fee has been paid, obtaining the visa usually takes up to 2 months. 

After the application is submitted, residence permits are typically issued within two business days, though in rare circumstances, they may take up to five days. 

Employee Background Checks

Legal and Background Checks

Background investigations in Tanzania generally involve determining whether an applicant is unqualified for a position due to a criminal conviction, motor vehicle violations, poor credit history, or misrepresentation of education or work history.

Last updated on April 30, 2023

If you have any queries or suggestions, reach out to us at irene.jones@neeyamo.com

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