Tanzanian payroll has more moving parts than many neighbouring markets — PAYE, social security (which fund depends on whether you are public or private sector), Workers Compensation Fund, and the Skills Development Levy. This guide walks through each.
Disclaimer. Statutory rates change. Confirm current figures on the TRA, NSSF, PSSSF, WCF, and OSHA portals before running payroll.
1. PAYE (Pay As You Earn)
PAYE in Tanzania is banded and remitted monthly to the TRA by the 7th of the following month. As of 2026 the bands are approximately:
- 0% on the first 270,000 TZS
- 8% on the next 250,000
- 20% on the next 200,000
- 25% on the next 280,000
- 30% above 1,000,000
Reliefs: limited mortgage and pension contributions are allowable.
2. NSSF / PSSSF
Tanzania operates two main social security funds:
- NSSF — for the private sector and parastatals.
- PSSSF — for the public sector.
Total contribution is 20% of gross monthly pay, typically split 10% employer + 10% employee, although the Act allows up to 15% from one side as long as the total is 20%.
Remittance: monthly, by the end of the following month.
3. WCF (Workers Compensation Fund)
The Workers Compensation Act 2008 created the WCF to cover workplace injury and disease. As of 2026:
- Private sector employers contribute 0.5% of gross monthly payroll.
- Public sector contributes 0.5%.
4. SDL (Skills Development Levy)
Levied on employers (not deducted from employees):
- 3.5% of gross monthly emoluments, due to the TRA monthly.
- Employers with fewer than 10 employees are exempt.
5. Other deductions
- Health insurance — many employers offer NHIF (Tanzania) or private cover; not mandatory.
- Pension — additional voluntary contributions on top of NSSF/PSSSF.
Worked example: a 5,000,000 TZS/month employee (private sector)
| Item | Employee | Employer |
|---|---|---|
| Gross | 5,000,000 | — |
| NSSF | 500,000 | 500,000 |
| WCF | — | 25,000 |
| SDL | — | 175,000 |
| PAYE (approx) | 1,000,000 | — |
| Net pay (approx) | 3,500,000 | — |
Common payroll mistakes
- Forgetting SDL. Easy to miss because it is employer-only.
- Wrong fund for the worker class. Public-sector employers must remit to PSSSF, not NSSF.
- Late NSSF remittance. Penalties are aggressive.
- Treating WCF as optional. It is not.
Key takeaways
- PAYE, NSSF/PSSSF, WCF, and SDL are all mandatory for most Tanzanian employers.
- SDL exemption applies only to employers with fewer than 10 staff.
- Confirm current rates monthly — this is a moving regulatory environment.