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Employer of Record (EOR) in Tanzania

Employer of Record in Tanzania

Skuad’s Tanzania EOR solutions are designed to help your business expand in the new markets of Tanzania in which the business entity does not have to establish any branch office or subsidiary in Tanzania. Tanzania is one of the fastest developing economies of Africa and provides excellent opportunities for the growth of foreign businesses.

Skuad enables organizations to hire employees as per the local labor laws of Tanzania. Skuad’s comprehensive solutions enable customers to run payroll, HR taxes and other types of compliances in Tanzania. Talk to Skuad experts to know more about its customized EOR solutions.

Tanzania at a Glance

Population: 61,361,249 (2021 estimates)

Currency: Tanzanian shilling

Capital City: Dodoma

Languages spoken: The majority of the people speak Swahili and English.

GDP: 65.92 (In billion US Dollars)

Employment in Tanzania

What you must know before employing in Tanzania

Employment laws in Tanzania are very complex and difficult to understand and several other factors complicate the hiring processes in Tanzania. In Tanzania, it is very complicated to hire employees in adherence to the labor laws. Finding the right employee for each specific job is very difficult. Different aspects of employment laws in Tanzania can be understood with the help of the below-mentioned table.

To set up a local entity in Tanzania, a company needs to be very careful in dealing with all aspects of Tanzania’s employment regulations. Any new business entity needs to be very careful regarding the employment status as penalties for non-compliance are very strict. Tanzania has tax regulations, legal compliances and social insurance norms that need to be taken care of before employing any employee. New business entities can take the help of PEO’s or EOR’s who can take the burden of the payroll and other compliances on their shoulders and make sure that business entities have smooth functioning as far as employee hiring, payroll and termination of the employees are concerned. To learn more about Tanzania's employment policies and ensure your expansion efforts fall within the legal requirements, book a demo with Skuad experts today.

Entitlements Explanations
Statutory Working Hours Full-time employees can work 9 hours daily. These nine hours of work do not include 1 hour of the lunch break. Lunch break is applicable only if the employee works continuously for five hours. Lunch break is not paid. An employee can work 45 hours per week as per 9 hours of daily work and anything more than 45 hours need to be compensated as overtime hours.
In Tanzania, an employee can continuously work for 6 days but the 7th day must be a rest day.
Rules for over timing Overtime in Tanzania is allowed only through an individual or collective agreement. Overtime cannot exceed 50 hours in a four-week period.
An employee cannot work for more than 12 hours in a day (regular work hours and overtime hours).
The rate of overtime work is 150% of the employee’s basic wage and 200% for work during a public holiday.
Working on Sundays Employees are allowed to work on Sunday if they are given Sundaysonal pay.
Paid Public Holidays
  • January 1: New Year’s Day
  • January 12: Zanzibar Revolution Day
  • April 2: Good Friday
  • April 5: Easter Monday
  • April 26: Union Day
  • May 1: Labor Day
  • May 13 to May 14: Eid al-Fitr
  • July 7: Saba Saba
  • July 20: Eid al-Adha
  • August 8: Nane Nane (Farmer’s Day)
  • October 14: Nyerere Day
  • October 18: Milad-un-Nabi
  • December 9: Independence & Republic Day
  • December 25: Christmas Day
  • December 26: Boxing day
Medical Leave An employee is eligible for 126 days of medical leave in a period of 18 months.
Maternity Leave Maternity leave is provided and regulated under the Employment and Labor Relation Act 2004.
Female employees are entitled to12 weeks of fully paid maternity leave or 100 consecutive days (in case of multiple births) within a leave cycle of 36 months.
Pregnant employees should provide an employer with a medical certificate 3 months before proceeding on Maternity leave. Female employees are also not allowed to work within 6 weeks of childbirth unless certified by a medical practitioner.
An employer is liable to grant paid maternity leave to an employee four times during the entire tenure of her service.
Annual Leave Accrual Entitlement As per the Employer and Labor Relations Act (2004), an employee with less than six months of service tenure shall not be entitled to the paid leave under the provisions of this act.
Disclosure and Confidentiality of Personal Information An employer has all the rights to refuse to disclose information that:
  1. is legally privileged;
  2. is private information related to an employee without the consent of the said employee;
  3. if disclosed, will result in the contravention of any law or court order;
  4. is confidential and, if disclosed, might cause either the employee or the employer, substantial harm.

Contractors Vs Fixed-term employees

Different types of business entities have different types of employee requirements based on the nature of their business. Employers decide whether they want to hire a full-time employee or a contractor based on their needs. Skuad is one of the top-rated HR firms these days with a global presence, helping business entities in hiring contractors or full-time employees based on their needs. Skuad is one of the oldest HR firms that is working globally to help businesses in finding the right candidate for them and accordingly they take care of all the payroll processes, taxation and other legal compliances on behalf of the employer. Whether your organization requires contractors or full-time employees, Skuad’s EOR solution can cater to all your hiring requirements. Learn more by talking to Skuad experts.

Hiring in Tanzania

While hiring an employee in Tanzania, the employer should identify the vacancy and at the same time evaluate the need of hiring an employee for that particular job. Evaluation of the need for hiring an employee will lead to the hiring of the right employee in the long run. Experienced hiring companies like Skuad, develop an accurate job role description that clearly describes the position they are looking to fill so that potential applicants can understand the role being offered before giving an interview for the same.

Once the job description is made, then the recruitment plan is developed, followed by the selection of the right candidates and then conducting the interview for them to hire the right candidate. As expansion into a new country is not a simple matter, companies need to put significant effort into business operations, sales, and other HR-related factors. An EOR service such as Skuad can save you time, labor, and resources. Talk to Skuad experts to know more about hiring in Tanzania.

Hiring in Tanzania

1. Employment contract:

There are mainly three types of contracts under which an employer can hire an employee and which can be explained as follows:

  • Contract for a specified period of time – In this type of contract, the time duration is specified and in case the specified duration expires this type of contract automatically comes to an end. This type of contract can be for 1 month, three months, one year, two years, etc.
  • Contract for a specific task – This is a kind of contract in which an employee is hired to perform a specific task. Once the task is completed, the contract automatically comes to an end.
  • Contract for an unspecified period of time – In this type of contract the duration of the employment is unspecified and that is why some people refer to it as a permanent contract.

2. Basic content of the employment contract:

The basic terms that are captured in the contract are as follows:

  • Name, permanent address, gender and age of the employee
  • Place of recruitment
  • Job description
  • Date of commencement of the employment relationship
  • Duration and form of the contract
  • Hours of work are defined in the contract itself
  • Place of work
  • Remuneration decided is included in the contract
  • Methods of calculation and details of any benefits or payments in kind
  • Any other prescribed matter should also be mentioned in the contract

3. Tax authority – to be informed

A statement of estimated tax payable, which contains an estimate of the chargeable income and the tax payable, is due for submission within three months from the beginning of the accounting period. A final tax return must be submitted within six months from the end of the accounting period.

Payment of tax can be completed in four equal installments - each payment must not be later than three months, six months, nine months and twelve months from the beginning of the accounting period.

4. Employer should inform the employee about necessary details

Employers should inform all the employees in writing about the basic regulations of the employment like working hours, salary components, leave policy and also about the termination of the contract.

All the necessary information about the employment should be given to the employee by the employer in a written form which has all the terms and conditions and do’s and don’ts related to the employment. It is the responsibility of the employer to keep the employee well informed about all aspects of the employment.

5. Medical Examination

Employers in Tanzania sometimes compel prospective employees to undergo a medical examination before accepting an offer of employment or before the employment becomes operative. Employers' practice of compelling the hired employees to undergo medical testing is arbitrary, unproportional and contravenes the well-known principles of data protection as well as the constitutional right to privacy.

Fixed-term employment in Tanzania

The Employment and Labor Relations Act, 2004, allows both the employer and the employee to enter into a contract for a specified period of time. As per Regulation 11 of this act, a minimum term of twelve months is required for a fixed-term employment contract.

Hiring an employee on a fixed-term employment contract of a duration of under 12 months is illegal in Tanzania. Under Tanzanian law, it is considered a criminal offense. As per Regulation 35 of the General Regulations, any person, if convicted, shall be liable to pay a fine of up to one million shillings or be imprisoned for a period of one year or both.

Probation Period

As such there are no regulations or explicit provisions in the Employment and Labor Relations Act 2004 about probation periods. However, according to this act, a probationary period of 6 months is allowed to prevent a scenario where a worker with less than 6 months of employment brings an unfair termination claim against the employer. EOR service such as Skuad can save you time, labor, and resources. Talk to Skuad experts to know more about hiring in Tanzania.

Termination of employment

A contract of employment can be terminated by serving advance notice, but the period of notice shall not be less than 7 days. Lawful termination of employment under common law includes the following laws:

  1. Termination of employment by agreement – this type of termination occurs when both the employer and the employee agree to bring the contract of employment to an end, but as per the written agreement. If the contract between an employer and employee is for a period of one year, the contract will expire with the expiry of this period.
  2. Automatic termination – This type of termination occurs in exceptional cases such as the death of or loss of business of the employer.
  3. Resignation – This happens when an employee due to material breach of the contract by the employer decides to resign from the employment.
  4. Terminal pay in Tanzania – If the contract is for a specified term, the amount included in profits shall not exceed the amount which the employee would have received in respect of the unexpired period of such contract and shall be deemed to have accrued evenly in such unexpired period to the employee;

If the contract of an employer and employee is for an unspecified term and provides for compensation on termination thereof, such compensation shall be deemed to have accrued in the period immediately following such termination at a rate equal to the rate per annum of the profits from such contract received immediately prior to such termination given by the employer;

If the contract is for an unspecified term and does not provide for compensation on termination of the employment thereof, any compensation paid to the employee on the termination thereof shall be deemed to have accrued in the period immediately following such termination at a rate equal to the rate per annum of the gains and shall not exceed the amount of three years of remuneration at such rate decided by the employer for an employee.

EOR Solution in Tanzania

EOR Solution in Tanzania helps businesses expand into Tanzania. Proficient professionals at Skuad provide services like an employer of record and payroll services that help people in growing their business in Tanzania. Skuad’s dedicated HR platform enables organizations to hire the right candidate for big business concerns.

Outsourcing Employment through an employer of record

There are several methods for an employer to recruit their team members as per the job requirements. If the employer is planning to expand their business overseas, the employer can either have their own recruitment team or take the help of an EOR. EOR solutions like Skuad, help in managing the payroll of the employees and at the same time, they comply with all the employment and tax laws.

An employer of record service can employ multinational clients.

Types of Visas in Tanzania

Visa Category Explanation
Tanzania Tourist/ Ordinary visa Any Tanzanian embassy is authorized to issue this visa. It authorizes tourists to visit certain designated areas of Tanzania.
Tourist visa This visa is needed if you are just going for a holiday to Tanzania.
Tanzania Business Visa Business visas in Tanzania are issued to those who intend to visit Tanzania for establishing business and professional contacts and also to those who are making arrangements for investment in Tanzania during their startup period. The validity of this type of visa can range from 1 to 6 months. The fee for this visa is determined administratively.
Tanzania Multiple-Entry Visa This type of visa is issued to those who need to make frequent visits to Tanzania.
Tanzania Transit Visa This type of visa is issued to those who want to pass through Tanzania while visiting some other country.
Tanzania Referred Visas Special permission and clearance are required for this visa. The Director of Immigration Services and the Principal Immigration Officer, in Dar es Salaam and Zanzibar respectively, are authorized to grant clearance or permission for this visa.

Talk to us and get more information and guidance related to types of visas and work visa requirements in Tanzania. Skuad can handle all your visa requirements and ensure the expansion process is not delayed.

Work Permit in Tanzania

In Tanzania, besides visas, several procedures are needed to issue work permits of classes “A” and “B”. All those foreigners who intend to reside in Tanzania for investment, business or any other acceptable purpose are issued residence permits.

Apart from visas, three different categories of work and resident permits are also issued by Tanzania:

a) Class A permit – is for foreign investors.

b) Class B permit – is for foreign employees with specialized skills who are filling a position for which there are no eligible workers in Tanzania.

c) Class C permit – is issued to missionaries, volunteers, students, researchers and more.

Most employees will need to get a class B work permit to work in Tanzania.

Processing time of work permit

A work permit is valid for 24 months and can be renewed for up to a maximum period of 60 months.

It takes almost two months after the application is given to the concerned authorities to obtain the work permit.

Things you must know to set up payroll in Tanzania

There is a huge ongoing competition between business entities who want to establish their business in Tanzania. Business entities need to follow all the rules and regulations while setting up their business. Companies usually achieve their targets if they take the help of some global payroll company who will take care of the hiring of the employees as well as their payroll structure.

Skuad has global tie-ups with many multinational companies and they cater to the needs of all the business entities in finding the best talent for their organization.

Taxes in Tanzania

The top cost-effective marginal rate of tax for resident individuals is 30%. Nonresident individuals are subject to tax at a flat rate of 15% on employment income. To understand how payroll and taxes are managed in Tanzania and expedite your expansion, talk to Skuad experts and book a demo.

Payable by the Employee

Grossed Income Tax Rate (%)
Up to TZS 1,620,000 0%
TZS 1,620,001 – TZS 4,320,000 14%
TZS 4,320,001 – TZS 6,480,000 20%
TZS 6,480,001 – TZS 8,640,000 25%
Over TZS 8,640,001 30%

Incorporation: How to set up a subsidiary in Tanzania

Skuad provides a one-stop solution for all new business opportunists to successfully launch their business by giving them the right employees at the best rates. Skuad manages all the paperwork, keeping in view the deadlines, and helps in making the business more productive and successful. To make use of Skuad’s EOR services for setting up a subsidiary in Tanzania and finding a bespoke solution for your expansion, get in touch with Skuad experts.

Professional Employer Organization (PEO)

A PEO assists in the process of hiring and recruiting remote talent in foreign countries, but there are certain differences in the kind of services that they provide.

Companies enter into a co-employment contract with PEOs, meaning that any employees that you hire through a PEO will be on your company’s payroll. On the other hand, an EOR is a legal employer on record of all the employees hired through their services.

EOR provides general risk management and insurance, worker compensations, etc. as required by the local labor laws of the country. However, if you choose PEO services, you will be required to provide for your employees’ insurance cover yourselves. When you partner with a PEO, you will still need to figure out the local laws for compliance. But an EOR will manage all the legal documentation required for hiring employees in a foreign country.

While PEOs can assist you with HR management, Skuad’s Employer of Record Tanzania solutions can help you in growing and benefit from the business opportunities in Tanzania by assuming all the legal responsibilities of being an Employer of Record, without the hassle of setting up a separate legal entity.

Employment contracts and compliances

Putting together the offer letter and employment contracts is the most important step of the employment relationship. An EOR takes into consideration all the local employment laws, country-specific norms, and other statutory requirements. The EOR also takes care of all types of legal compliance requirements.

Skuad provides both PEO and EOR solutions for companies. Hire Skuad’s EOR solution for Tanzania to take care of all the compliance and HR-related tasks, from onboarding to termination. Talk to Skuad experts to learn more.

Conclusion

EOR is the best thing for the new business people who are trying to set their new business in Tanzania. It is very easy for employers to remove all the cultural and language barriers if they hire the employees as per the job role defined for them. Skuad’s EOR provides the most cost effective solution for all the business people. An EOR makes sure global payroll technology is best used to hire the right employees and ensures that all the employees are paid on time and that too in the local currency of Tanzania. Book a demo today.

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