Tanzania's lower-middle-income economy has sustained significant growth, notably in its 4% annual expansion of the agricultural sector. This economic success is reinforced by active industry, strategic geography, and abundant natural resources. As an Employer of Record in Tanzania, you can leverage these factors to establish a strong presence and capitalize on the nation's thriving business environment.

Expand your team in Tanzania strategically with seamless hiring that aligns seamlessly with your business objectives. Simplify local employment intricacies through Gloroots's comprehensive Employer of Record (EOR) service. Our specialists manage compliance, payroll, tax obligations, and benefits, empowering you to concentrate on nurturing your team and driving company expansion in the vibrant Tanzanian market.

In Tanzania, the risks of misclassifying employees can result in substantial legal implications, jeopardizing essential legal protections. Opting for a PEO/EOR presents a proactive strategy to mitigate these risks, guaranteeing thorough compliance, accurate employee classification, and comprehensive benefits administration. Collaborating with seasoned professionals enables businesses to focus on their core operations confidently, as employment responsibilities are handled in accordance with Tanzanian regulations. This not only ensures legal compliance but also safeguards the workforce's well-being.

The initial step in delving into Tanzania's labor market involves acquainting oneself with its labor regulations and guidelines.    

Employment contract

In adherence to Tanzanian regulations, having an employment contract, whether formalized or not, is obligatory. The contract must encompass detailed information about the employer, along with specified terms and conditions. It is mandated that employment contracts in Tanzania be formulated in a language comprehensible to both parties, with Swahili or English being the most common choices. Essential information required by employment law includes:

• Company details: Name, registered office address, registration number, etc.
• Employee details: Date of birth, current address, nationality, job designation, etc.
• Start date of employment
• Nature of the employment
• Employee duties
• Duration of employment for determinate contracts
• Payroll cycle and monthly salary disbursement date
• Compensation structures
• Length of the probationary period, if applicable
• Leave details
• Notice period
• Applicable collective bargaining agreements

Working time

The standard workweek consists of 45 hours or a maximum of 9 hours per day. Employees in Tanzania might be obligated to work six days each week.

Overtime

Agreement between the employee and employer is essential for overtime, with a cap of 12 hours per day. Overtime is restricted to 50 hours within a 4-week span and requires compensation at a minimum rate of 150% of the regular pay. Regarding work on public holidays, the pay rate is set at 200% of the regular pay.

Public Holidays

Tanzania observes a total of 15 public holidays.

Minimum Wage

The monthly minimum wage fluctuates based on the industry, ranging from 40,000 TZS for domestic workers to 400,000 TZS for sectors such as financial services, telecommunications, and international companies.

Annual Leave

Workers with a tenure of at least 6 months are eligible for an annual leave period of 28 consecutive days.

Paid Sick Leaves

Employees have the right to 126 days of paid sick leave during a 36-month cycle. The initial 63 days of sick leave are compensated at 100% of the regular salary and, subsequently, at 50% of the regular salary. To qualify for sick leave and corresponding pay, the employee is required to furnish a medical certificate.

Maternity leaves

Mothers are eligible for 84 days of paid maternity leave, and if there is more than one child born, the entitlement extends to 100 days of paid maternity leave. The mother is required to notify her employer at least three months before the anticipated due date.

Paternity leaves

Fathers have the right to three days of paid paternity leave within the initial seven days following the birth of their child.

‍Tax and Social Security contribution:

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Employer

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Employee

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Employee Income tax

Termination 

In Tanzania, termination requires the issuance of written notice, specifying the grounds for termination and the effective termination date.

Severance Pay

To qualify for severance pay, the employee needs a minimum tenure of 12 months. Severance pay is calculated at the rate of seven days' pay for each year of employment and is capped at a maximum of 10 years.

Notice Period

In the initial month of employment, a notice period of 7 days is required. For employees engaged on a daily or weekly basis, a notice period of 4 days is applicable, while those employed on a monthly basis are subject to a 28-day notice. Alternatively, payment in lieu of notice is also an option.

Probation period

While Tanzanian law does not specify a probation period, it does establish that an employee cannot legally assert unfair dismissal if terminated within the initial 6 months of employment.