NSSF is 20% total — 10% from you, 10% from the employee (on basic salary up to a cap). SDL (Skills Development Levy) is 4.5% of payroll from the employer. WCF (Workers’ Compensation Fund) is employer-funded at a rate that varies by sector. Budget roughly 15–17% employer-side on top of gross before PAYE.

Payroll and tax

PAYE applies to employment income. Bands are progressive: first TZS 270,000 at 0%, next TZS 1,080,000 at 9%, next TZS 1,080,000 at 20%, next TZS 3,600,000 at 25%, and above TZS 6,030,000 at 30%. Reliefs apply. Monthly remittance to the Tanzania Revenue Authority (TRA) is required. NSSF goes to the National Social Security Fund; SDL and WCF to the respective bodies. Late payment attracts penalties; TRA and NSSF are strict.

Employment and Labour Relations Act

Written contracts are required. Probation: max 6 months. Working hours: 8 per day, 40 per week (or 45 in some sectors); overtime is paid at 1.5×. One rest day per week; annual leave not less than 28 days. Maternity leave: 12 weeks at full pay; 3 days paternity. Termination: by notice (minimum 28 days for monthly paid, or as contract) or payment in lieu. Dismissal for cause must be fair and documented — hearing and chance to respond. Unfair termination can lead to reinstatement or compensation (up to 12 months’ pay). Severance: where the employer terminates otherwise than for cause, not less than 7 days’ pay per completed year of service.

Redundancy requires consultation and often severance. Avoid treating long-term contractors or casuals as non-employees; the Act can deem them employees with full rights.

Statutory benefits

NSSF (pension/savings), SDL (training levy), and WCF (injury compensation) are the main employer obligations. Employee pays 10% NSSF. Maternity and paternity are as above. Ensure NSSF, SDL, and WCF are remitted on time; back-dues and interest can be substantial.

EOR considerations

Your EOR must be registered for NSSF, SDL, WCF, and PAYE and issue Employment and Labour Relations Act–compliant contracts. Verify they remit to TRA, NSSF, and the other bodies monthly and that they calculate severance correctly. Labour courts and the Commission for Mediation and Arbitration handle disputes; the EOR should carry employment liability and have local legal support. Confirm who bears cost if rates or caps change.

Frequently Asked Questions

What does an employer pay on top of salary in Tanzania? NSSF 10%, SDL 4.5%, and WCF (sector-dependent). Total employer statutory add-on is roughly 15–17% before PAYE. Employee pays 10% NSSF.

Is severance mandatory on termination? Yes when the employer terminates otherwise than for cause. Minimum 7 days’ pay per completed year of service. Contract can provide more.

What notice period applies? Minimum 28 days for monthly paid employees, or as contract. Payment in lieu is acceptable if agreed.

Can we terminate for cause without a hearing? No. Dismissal for cause must follow a fair process — hearing and chance to respond. Otherwise you risk unfair termination claims and reinstatement or up to 12 months’ compensation.

Who remits NSSF and SDL when using an EOR? The EOR is the employer of record and must register and remit NSSF, SDL, WCF, and PAYE. Confirm registration and remittance before contracting.