Payroll guide · Tanzania
Everything an employer needs to run compliant payroll in Tanzania — PAYE bands, statutory deductions, the computation order, filing deadlines and the mistakes that most often surface in an audit.
Tanzanian payroll carries four separate statutory obligations, two of which are employer-only levies that never appear on a payslip — and one of which depends on how many people you employ.
This guide covers PAYE, NSSF and PSSSF at 10% each side, the Skills Development Levy, the Workers Compensation Fund, and the computation order that makes employee NSSF deductible before tax.
Payroll obligations in Tanzania are administered by Tanzania Revenue Authority (TRA), alongside the social security and levy bodies set out below. Every employer is responsible for computing deductions correctly, remitting them on time and retaining the records — the obligation sits with the employer, not the employee, and it does not transfer to a bookkeeper or an accountant.
| Chargeable income (TZS) | Rate |
|---|---|
| 0 – 270,000 | 0% |
| 270,001 – 520,000 | 8% |
| 520,001 – 760,000 | 20% |
| 760,001 – 1,000,000 | 25% |
| Above 1,000,000 | 30% |
Monthly chargeable income in TZS, resident employees. The annual tax-free threshold is TZS 3,240,000.
| Deduction | Employee | Employer | Rules |
|---|---|---|---|
| NSSF / PSSSF | 10% | 10% | 20% in total on gross. Not applied below the TZS 270,000 threshold. The employee share is tax deductible. |
| NHIF | 3% | 3% | Public sector. Private sector optional pending operationalisation of the Universal Health Insurance Act. |
| Skills Development Levy | — | 3.5% | Payable only by employers with ten or more employees. |
| Workers Compensation Fund | — | 0.6% private / 0.5% public | Employer cost only. |
Our free calculator applies every deduction on this page — including lower earnings limits and relief caps — and shows the PAYE working band by band.
Open the Tanzania calculator| Relief | Value | Notes |
|---|---|---|
| Tax-free band | TZS 270,000/month | TZS 3,240,000 a year. |
| Employee NSSF | Fully deductible | Reduces chargeable income before the bands are applied. |
Getting the order right matters more than getting any single rate right. Applying a deduction after the bands instead of before it changes the tax for every employee on the payroll.
Gross pay less the employee NSSF contribution gives chargeable income. PAYE is then applied using the band table. SDL and WCF are employer levies and do not reduce net pay.
An employee on TZS 900,000 gross:
Employer cost on top of gross, assuming ten or more employees: NSSF 90,000, SDL at 3.5% of 31,500 and WCF at 0.6% of 5,400 — a total cost of employment of TZS 1,026,900.
| When | What is due |
|---|---|
| By the 7th of the following month | PAYE remitted to TRA and the monthly return filed |
| By the month end | NSSF or PSSSF contributions remitted |
| By the 7th | Skills Development Levy remitted where ten or more staff are employed |
| Quarterly | Workers Compensation Fund returns |
| Within 30 days of year end | Annual PAYE reconciliation |
TRA applies penalties and interest on late PAYE, SDL and WCF filings, and the social security funds carry their own penalties on unremitted contributions. SDL in particular is frequently missed by employers who cross the ten-employee threshold mid-year and do not notice.
These are the errors that turn up most often when a manual payroll is reviewed.
Our ROI calculator prices what manual payroll actually costs — the days lost at month-end, the leave nobody recorded, and the statutory penalty exposure you are already carrying.
Open the ROI calculatorYes. The employee share of NSSF is tax deductible, so chargeable income is gross pay less the employee contribution. PAYE bands are then applied to that figure.
Employers with ten or more employees, at 3.5% of gross payroll. It is an employer-only levy and never deducted from staff.
0.6% of gross payroll for private-sector employers and 0.5% for public-sector employers. It is an employer cost.
It is a public-sector obligation. Private-sector participation remains optional pending operationalisation of the Universal Health Insurance Act.
TZS 270,000 a month, or TZS 3,240,000 a year.
20% of gross — 10% from the employee and 10% from the employer, to NSSF or PSSSF depending on the scheme.
CromaHR computes every deduction on this page automatically, with rates that are effective-dated — so a retrospective run uses the rates in force for that period rather than today's. Returns are generated in the formats Tanzania Revenue Authority (TRA) actually accepts, and every run leaves a complete audit trail.
Because the platform was designed by a Certified Internal Auditor, the controls came first: maker-checker approval on payroll runs, role-based permissions, and a record of every change showing who made it, when, and what the value was before and after.
CromaHR supports payroll in 36+ countries. These guides cover the markets our customers ask about most.
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