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Hiring in Tanzania? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Tanzania?
Employment Norms in Tanzania
The United Republic of Tanzania is a South African coastal country. The country is known for its middle economy which is highly dependent on agriculture. However, Tanzania has progressed over the past decades. The country's economy has seen overall growth and is alluring to investors.
General Information:
- The Tanzanian currency is Tanzanian Shilling (TZS).
- Dodoma is the capital of Tanzania.
- Swahili and English are the official languages of Tanzania. Documentation can be in the official Tanzanian languages.
- As of 2021, the GDP of Tanzania was reported to be 67.84 billion US dollars.
The labor laws in Tanzania protect employees from any kind of discrimination in the workplace. It extends many health and social benefits such as minimum wage, leaves, social security, etc.
Table of Contents
- Agreements
- Onboarding Process
- Visa
- Minimum Wage
- Payroll Cycle
- Annual Bonus
- Health Benefits
- Working Hours and Overtime
- Leaves
- Social Security
- Taxes for Employers
- Taxes for Employees
- Probation
- Termination
- Severance Pay
- Employees or Contractors
- Final Words
AgreementsOnboarding ProcessVisaMinimum WagePayroll CycleAnnual BonusHealth BenefitsWorking Hours and OvertimeLeavesSocial SecurityTaxes for EmployersTaxes for EmployeesProbationTerminationSeverance PayEmployees or ContractorsFinal Words
Agreements
The language of the agreement can be English or Swahili. The employment agreements in Tanzania are of three types:
- Indefinite agreement: An indefinite or permanent employment agreement is the most widely used. It is mainly used for hiring part-time or full-time workers. This covers all the benefits provided by the employer.
- Definite agreement: A definite agreement is mainly for a specific time. The duration of the agreement depends on the agreement between the employer and the employee. The duration of such an agreement can be of up to two years.
- Work-specific agreement: This agreement is for a specific type of work only. Once the work is done, the agreement comes to an end.
Onboarding Process
The onboarding process in Tanzania is just like any other country:
- The HR team prepares a job description that includes all the details of the job in collaboration with the unit that has a job vacancy.
- Then the job description is uploaded on the official site of the company. It can be uploaded on other hiring platforms like LinkedIn.
- Candidates apply for the job by verifying their eligibility. They are further shortlisted based on rounds of screenings and interviews.
- Final shortlisted candidates then negotiate their terms and conditions with the employer. After the mutual agreement, the candidate is hired as an employee
Visa
Tanzania has three types of Visas:
- Short-term stay visa: It is an ordinary visa that is issued for 90 days. It includes purposes like tourism, family visits, business trips, etc.
- Long-term stay visa: This visa is valid for up to 12 months. The visa holder has to leave the country every three months and can not stay consecutively. This type of visa includes a student visa, work permits, etc.
- Transit visa: This visa is provided for crossing the country to enter another country. It is issued for about a week.
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Minimum Wage
The minimum wage in Tanzania ranges differently for different sectors. The minimum wage ranges between TZS 40,000 to TZS 400,000 per month.
Payroll Cycle
The payroll cycle in Tanzania can be monthly or bi-weekly. It can also be given on a daily or weekly basis as per the mutual agreement between the employer and the employee.
Annual Bonus
There is no legal provision for giving an annual bonus or 13th month's salary to employees in Tanzania.
Health Benefits
- It is the responsibility of the employer to maintain a healthy and hygienic environment at the workplace. Medical plans and social security are provided to the employees.
- The employee must declare his/her health conditions.
Working Hours and Overtime
- Work hours: The standard work hours in Tanzania is of 9 hours per day. An employee has to work 45 hours a week or 26 days per month.
- Break: An employee is entitled to lunch and a refreshment break in between regular work hours.
- Overtime: An employee must not work more than 50 hours of overtime in a month. The employer has to pay 150% of the regular work hours for overtime.
Leaves
An employer has to pay for the following leaves in Tanzania.
Sick Leave
- An employee is entitled to 126 days of paid sick leaves in Tanzania. The first 63 days are paid in full salary. The next 63 days are half-paid according to the salary of the employee.
Maternity leaves
- A pregnant female employee is entitled to get 84 days of paid maternity leave in case of single birth.
- In an employee is going to give birth to more than one child, then she can avail of 100 days of paid maternity leave.
- An additional 84 days leave is given if the child dies in the first year of birth.
- The employer has to pay for the maternity leave.
Paternity leaves
- A male employee is entitled to 3 days of paid paternity leave in Tanzania regardless of the number of births.
- The leave must be taken within 7 days of childbirth.
- The employer has to pay for paternity leave.
Annual leaves
- An employee is entitled to 28 days of paid annual leave in Tanzania.
Public Holidays (for the Calendar year 2023)
- New Year's Day (1st Jan)
- Zanzibar Revolution Day (12 Jan)
- Karume Day (7 Apr)
- Good Friday (7 Apr)
- Easter Sunday (9 Apr):
- Easter Monday (10 Apr)
- Eid ul Fitr (22 Apr)
- Eid ul Fitr Holiday (23 Apr)
- Union Day (26 Apr)
- Worker's Day (1 May)
- Eid al-Adha (29 Jun)
- Saba Saba Day (7 Jul)
- Farmers' Day (8 Aug)
- Maulid (27 Sep)
- Mwalimu Nyerere Day (14 Oct)
- Independence Day (9 Dec)
- Christmas Day (25 Dec)
- Boxing Day (26 Dec)
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Taxes for Employers
- National Social Security Fund (NSSF) - 10%
- Public Service Social Security Fund (PSSSF) - 15%
- Skills and Development Levy (SDL) - 4% (levied on companies that have at least 10 employees)
- Worker's compensation fund tariff - 0.5%
- Value Added Tax - 18%
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Taxes for Employees
- National Social Security Fund (NSSF) - 10%
- Public Service Social Security Fund (PSSSF) - 5%
An employee has to pay income tax as follows:
- up to TZS 270,000 - 0%
- above TSZ 270,000 - 8%
- above TSZ 520,000 - 20%
- above TSZ 760,000 - 25%
- above TSZ 1,000,000 - 30%
Probation
The probationary period in Tanzania is usually up to 6 months.
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Termination
The termination of an employee is complex in Tanzania. Termination can happen only by:
- voluntary resignation by the employee
- lapse of the employment contract
- on the grounds of misconduct
- incapacity to work
- incompatibility
A notice period of 7 to 28 days must be given before the termination, depending on the tenure of the employee.
Severance Pay
- In case of termination at a reasonable cause, an employee is entitled to 7 days' salary.
- The severance pay depends on the tenure of the employee.
- The employee is not entitled to any severance pay in case of resignation or termination on the grounds of misconduct.
Employees or Contractors
In case an employee is misclassified as a contractor or vise-versa, a penalty is imposed:
- An employer has to pay employment income tax on the behalf of the employee.
- An employer has to pay health insurance and social security contribution for the employee.
- A duty of payment of overhead surcharges is paid by the company if found guilty.
- The company has to pay all the related interests and sanctions on the behalf of a misclassified employee.
Final Words
Tanzania is a coastal country in the African continent. It has shown vigorous growth in overall development in the past decade. The country's economy is highly dependent on agriculture and tourism. However, with investment activities and liberalization in the laws, the country opens opportunities for new investors.
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