Employ Candidates Compliantly in Tanzania

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  1. Overview: Tanzania
  2. Global HR Compliance
  3. Global PEO and payroll
  4. Work permit for hiring expats via PEO
  5. Expand without a company set up
  6. Contractor vs. employee: which is better?
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Global PEO and Payroll in Tanzania

Getting your business up-and-running in Tanzania can be challenging, especially if you do not speak the native language. Establishing your own business entity in Tanzania is an option to be considered as you expand abroad. But before you invest valuable resources in setting up business in Tanzania, you should be fully aware of the risks involved.

Acumen’s Global PEO and Payroll solution was designed especially for companies like yours, to smooth the way for quick, easy and risk-free business operations in Tanzania, without having to establish a legal business entity.

Acumen International – Your Professional Employer Organization in Tanzania

Navigating the Tanzanian legal system and adhering to regulations governing employment and taxation can be challenging for businesses, especially if you are not a native Tanzanian speaker. Partnering with Acumen International as a global Professional Employer organization (PEO) provides you with the local knowledge and support you need to conduct business in Tanzania without concern for legal and compliance risks.

Whether you represent international client companies or you are taking your own business operations abroad, Acumen International’s Global PEO and payroll service allows you to hire and payroll local and expat employees in Tanzania. With Acumen in your corner, you can quickly and easily onboard and compensate your employees without risk of legal repercussions.

International Global Payroll and Taxation in Tanzania

Employment related taxes

Personal Income tax (PIT). Income tax is payable by individual’s resident in Tanzania (other than short-term residents) on their worldwide income. ‘Short-term residents’ and non-residents are taxable on income from a Tanzanian source. Personal services have a Tanzanian source if performed in Tanzania or performed outside Tanzania but where the payer is the government of Tanzania.

Residence (Local & Expat).

Tax resident employees. An individual is resident in Tanzania in any tax year if one has a permanent home in Tanzania and visits Tanzania in the year or has no permanent home but is present in the country for either 183 days in the year or an average of 122 days per year in the relevant year and the preceding two years.

Short-term resident. An individual is a short-term resident at the end of any income year if during the whole of one’s life one has been resident in Tanzania for not more than two years in total.

Non-tax resident employees. Non resident individuals are subject to tax on total (business, investment and employment) income derived in Tanzania.

Nontaxable payments. The following benefits are specifically exempt from tax:

  • The traveling costs for passage of the taxpayer, spouse and up to four children, if the individual is domiciled more than 20 miles from his or her place of employment and performs services for the employer only.
  • Cafeteria services on the business premises that are available on a nondiscriminatory basis.
  • Contributions to approved pension funds and provident funds.
  • The value of medical services granted on a nondiscriminatory basis to a full-time employee or a director providing full-time services, the spouse and four children.
  • Benefit for use of motor vehicle if the employer does not claim any deduction or relief with respect to the vehicle.

Social security contribution. There is a state social security scheme known as the National Social Security Fund (NSSF), which every employer in the private sector must contribute to.

Payroll Cycle in Tanzania. Wages payout on hourly, daily, weekly or monthly basis.

Non-payroll taxes in Tanzania

VAT is chargeable on all taxable goods and services supplied in, or imported into, Mainland Tanzania. The export of goods and certain services is eligible for zero rating. The Commissioner has the discretion to register (as intending traders) investors whose projects have not commenced production of taxable supplies but wish to be VAT-registered in order to reclaim the tax they incur on start-up costs. A business that only makes exempt supplies is unable to register for VAT and, consequently, unable to recover the VAT incurred on inputs.

Registered businesses must submit VAT returns, and pay any tax due, on a monthly basis.

There is also mandatory registration for professional service providers (e.g. lawyers and accountants) and government entities/institutions carrying out economic activities. A non-resident who carries on an economic activity in Mainland Tanzania without a fixed place (e.g. non-resident suppliers of B2C electronic services) and makes taxable supplies in excess of the VAT registration threshold is required to appoint a VAT representative.

The input tax claim time limit is six months. However, this time limit starts to run not only by reference to the date of the tax invoice/fiscal receipt but also by reference to the date of the time of supply.

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How Acumen’s International PEO and Payroll Service can Benefit Your Business in Tanzania

Compensating your local and expat workforce in Tanzania and closely adhering to Tanzanian taxation requirements can divert your attention and resources from activities that help your business grow. A reliable global employment solution like Acumen’s Global PEO and Payroll service can take a substantial burden off your shoulders so you can focus on running your company.

Outsourcing the administrative and compliance tasks involved in employee payroll is one approach, but we have a better solution. Acumen International offers a global PEO and payroll solution that goes beyond outsourcing. We hire and compensate your global workforce on your behalf, and take care of all the details of payroll while ensuring full compliance with Tanzanian labor and taxation laws.

It is important to note that Acumen does not provide international global payroll services as a standalone solution, but only as a part of our global PEO and Payroll solution.

Our comprehensive global PEO and payroll services are just some of the benefits of partnering with Acumen International. We make it easy for you to achieve your business goals in Tanzania by officially employing and compensating your best selected global talent – both locals and expats – without concerns for legal and compliance risks faced by global employers.

Disclaimer: Any of the above information is subject to changes imposed by Tanzania laws. To get the latest updates on taxation in Tanzania and in 190 countries worldwide, contact Acumen’s team of global employment experts.

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