Payroll and Benefits Guide Tanzania
Last updated: Mar 27, 2025
Contribution
| Employer Payroll Contributions | |
| Up to 20% | National Social Security Fund (NSSF) – applied to the Private Sector only. The employer can choose to cover this contribution or split it with the worker (making a combined rate of 20% NSSF total). |
| 15.00% | Public Service Social Security (PSSF) – applied to the Public Sector only. |
| 3.5% | Skills Development Levy (applicable only to employers with a minimum of 10 employees) |
| 0.5% | Workers Compensation Fund |
| Up to 24% | Total Employment Cost |
| Employee Payroll Contributions | |
| Up to 10.00% | National Social Security Fund (NSSF) – applied to the Private Sector only. Employers can choose to apply this contribution to workers or to cover part or all of this 10% (to reach the combined 20% total NSSF contribution). |
| 5% | Public Service Social Security (PSSF) – applied to the Public Sector only. |
| Up to 10.00% | Total Employee Cost |
| Employee Income Tax | |
| 15% | Flat rate for non-resident individuals |
| Mainland: | |
| 0.00% | 0.00 TZS-270,000 TZS |
| 8.00% | 270,001.00 TZS- 520,000.00 TZS |
| 20.00% on the excess of 520,001 TZS + 22,500.00 TZS | 520,001.00 TZS-760,000.00 TZS |
| 25.00% on the excess of 760,001 + 70,500.00 TZS | 760,001.00 TZS- 1,000,000.00 TZS |
| 30.00% on the excess of 1,000,001.00 TZS + 130,500.00 TZS | 1,00,001.00 TZS and over |
| Zanzibar: | |
| 0.00% | 0.00 TZS- 180,000.00 TZS |
| 9.00% | 180,001 TZS– 360,000 TZS |
| 20.00% on the excess of 180,001 TZS + 16,200 TZS | 360,001 TZS- 540,000 TZS |
| 25.00% on the excess of 360,001 TZS + 52,200 TZS | 540,001 TZS + 720,000 TZS |
| 30.00% on the excess of 720,001 TZS + 97,200 TZS | 720,000 TZS and Above |
Employer taxes
Employee taxes
Minimum Wage
General
The monthly minimum wage varies by industry, from 40,000 TZS for domestic workers, TZS to 400,000 TZS for industries such as financial services, telecommunication, and international companies.
MINIMUM WAGE (PER MONTH)
Payroll
Payroll Cycle
In Tanzania, employees can be paid daily, weekly, bi-monthly, or monthly. the payroll frequency depends on company policy.
Employees who are paid on a monthly basis receive their salary no later than the end of the month.
13th Salary
There are no provisions in the law regarding 13th salaries.
Working Hours
General
A full work week is 45 hours or up to 9 hours per day. In Tanzania, employees may be required to work 6 days a week.
Overtime
| Aspect | Regulation Details | Notes |
| Maximum Ordinary Hours | 9 hours per day or 45 hours per week. | Overtime is any work performed beyond these limits. |
| Absolute Daily Cap | Total original and extra work hours must not exceed 12 hours per day. | This effectively caps overtime at a maximum of 3 hours per day (9 ordinary + 3 overtime). |
| Maximum Overtime Cap | Overtime is limited to 50 hours in any four-week cycle (approximately $12.5$ hours per week). | This is the primary restriction on total overtime hours. |
| Compressed Workweek | By written agreement, daily hours can be extended to 12 hours per day (inclusive of a meal interval) without overtime pay, provided the weekly limit of 45 hours and 5 workdays is respected. | |
| Exemptions | Employees in senior managerial positions who manage other workers on behalf of the employer are typically exempt from the overtime rules. |
Mandatory Overtime Pay Rates
Overtime compensation is mandatory and is calculated as a minimum premium percentage of the employee’s ordinary rate of pay (which, following the 2025 amendments, may explicitly include payments for work done on any rest day).
| Day/Condition | Minimum Compensation Rate (Multiplier) | Total Pay Rate | Notes |
| Standard Overtime (Working Days) | 1.5 times the ordinary hourly rate. | 150% | Applies to hours worked beyond 9/day or 45/week. |
| Weekly Rest Day Work | 2 times the ordinary hourly rate (Double Pay). | 200% | This premium is the minimum for work on the designated Rest Day (usually Sunday). |
| Official Public Holiday Work | 2 times the ordinary hourly rate (Double Pay). | 200% | This premium is the minimum for work on an official Public Holiday. |
| Night Work Premium (8:00 PM to 6:00 AM) | +5% of the normal wage rate. | 105% | This is a separate premium that must be added to the employee’s pay for hours worked at night, and it is cumulative with the overtime rate if the work is also considered overtime. |
Compensation Method
-
Monetary Pay: The payment of the applicable premium (150% or 200%) is mandatory.
-
Time Off in Lieu (TOIL): The law generally does not provide for compensatory time off instead of monetary payment for overtime. The premium payment is the minimum statutory entitlement.5
Leave
Annual Leave (Vacation)
Employees who have been employed for at least 6 months are entitled to 28 days of consecutive leave per year.
PTO carryover
Unused leave shall be commuted for cash by 30th December of each year unless written approval to carry forward has been granted by the company.
Note:
- For Zapeo, 5 days carry over per cycle
Public Holidays
When a public holiday falls on a weekend, the following working day is given as a day off in lieu.
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 12 January 2026 | Monday | Zanzibar Revolutionary Day | Standard holiday |
| 20 March 2026 | Friday | Eid al-Fitr (Day 1) | |
| 21 March 2026 | Saturday | Eid al-Fitr Holiday (Day 2) | |
| 3 April 2026 | Friday | Good Friday | Standard holiday |
| 6 April 2026 | Monday | Easter Monday | Standard holiday |
| 7 April 2026 | Tuesday | Karume Day | Standard holiday |
| 26 April 2026 | Sunday | Union Day | Standard holiday |
| 1 May 2026 | Friday | International Workers’ Day (Labour Day) | Standard holiday |
| 27 May 2026 | Wednesday | Eid al-Adha (Eid al-Hajj) | |
| 7 July 2026 | Tuesday | Saba Saba (Dar es Salaam Trade Fair) | Standard holiday |
| 8 August 2026 | Saturday | Nane Nane (Farmers’ Day) | Standard holiday |
| 25 August 2026 | Tuesday | Mawlid (Prophet Muhammad’s Birthday) | |
| 14 October 2026 | Wednesday | Mwalimu Nyerere Day | Standard holiday |
| 9 December 2026 | Wednesday | Independence Day | Standard holiday |
| 25 December 2026 | Friday | Christmas Day | Standard holiday |
| 26 December 2026 | Saturday | Boxing Day | Standard holiday |
Sick Days
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 thereafter, 50% of the regular salary.
In order 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 3 months from the expected due date.
Paternity Leave
Fathers are entitled to 3 days of paid paternity leave within the first 7 days of the birth of the child.
PAID MATERNITY LEAVE (DAYS)
Termination
Termination Process
In Tanzania written notice must provided upon termination that includes the reason and the termination date. Termination can be due to economic reasons, redundancy, operations, bankruptcy, retrenchment and poor performance.
Termination due to poor performance requires a PIP (Performance Improvement Plan) with records, warning letter and recording of minutes for a minimum of 6 weeks to follow pursuant to the Employer guidance.
| Salary payment interval / date | Final payment on termination | Bank account/payment-method requirement |
|---|---|---|
| There is no statute setting a fixed “Xth day of the month” for all wages, but the Employment and Labour Relations Act (ELRA) No. 6 of 2004, Sect 28 (“Payment of Remuneration”) says wages must be paid on the agreed payday and the employer must specify the pay period (monthly, weekly, etc). | Section 45 of the ELRA deals with “Payment of wages and related benefits on termination” and provides that on termination the employer shall pay all outstanding remuneration and issue the certificate of service. The law says this must be “immediately” (or at latest when the employee asks). | The ELRA stipulates remuneration must be paid in money at the workplace (Sect 29). Payment by bank transfer or other methods is possible if agreed, but there is no statutory requirement found in the summary that all payments must be into a bank account only. |
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
The employee must have worked for at least 12 months in order to be eligible for severance pay. Severance pay is equal to 7 days’ basic pay for every completed year of employment and is capped at 10 years.
Probation Period
The probation period in Tanzania is set at 6 months. It is possible to extend it further if additional time is needed to assess the workers competency, up to a maximum period of 12 months.
Immigration
In order 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 who have a desired profession.
- Class C: For missionaries, students, volunteers
Residence permits must be applied for through the Directory of Immigration Services.
To apply to work in Tanzania, the application is submitted by the employer. A filled-out application form, passport copy, passport photos, bank information proof, signed employment contract, curriculum vitae copy, academic records.
Once everything has been submitted and an application fee has been paid, the process to obtain the visa usually takes up to 2 months.
VAT
General
18% standard rate.
Stay up to date on payroll & employment law changes
See how Papaya can help you automate your global payroll or EoR whilst staying 100% compliant with local labor laws
Payroll and Benefits Guide
in Tanzania
What’s covered in this guide:
- Employer/employee contributions
- Minimum wage
- Working hours
- Visa requirements
And more...
Public Holidays Calendar
| Date | Day | Holiday | Notes |
|---|---|---|---|
| 1 January 2026 | Thursday | New Year’s Day | Standard holiday |
| 12 January 2026 | Monday | Zanzibar Revolutionary Day | Standard holiday |
| 20 March 2026 | Friday | Eid al-Fitr (Day 1) | |
| 21 March 2026 | Saturday | Eid al-Fitr Holiday (Day 2) | |
| 3 April 2026 | Friday | Good Friday | Standard holiday |
| 6 April 2026 | Monday | Easter Monday | Standard holiday |
| 7 April 2026 | Tuesday | Karume Day | Standard holiday |
| 26 April 2026 | Sunday | Union Day | Standard holiday |
| 1 May 2026 | Friday | International Workers’ Day (Labour Day) | Standard holiday |
| 27 May 2026 | Wednesday | Eid al-Adha (Eid al-Hajj) | |
| 7 July 2026 | Tuesday | Saba Saba (Dar es Salaam Trade Fair) | Standard holiday |
| 8 August 2026 | Saturday | Nane Nane (Farmers’ Day) | Standard holiday |
| 25 August 2026 | Tuesday | Mawlid (Prophet Muhammad’s Birthday) | |
| 14 October 2026 | Wednesday | Mwalimu Nyerere Day | Standard holiday |
| 9 December 2026 | Wednesday | Independence Day | Standard holiday |
| 25 December 2026 | Friday | Christmas Day | Standard holiday |
| 26 December 2026 | Saturday | Boxing Day | Standard holiday |
Questions & Answers