TAX RATES ON PAYEE (PAY AS YOU EARN), SOCIAL SECURITY FUND, WCF (WORKERS COMPENSATION FUND, AND SDL (SKILLS AND DEVELOPMENT LEVY)
A: Resident Individual Income Tax (Tanzania Mainland)
| Monthly Income | Tax Rate |
| (i) Where the total income does not exceed 270,000/= |
NIL |
| (ii) Where the total income exceeds 270,000/= but does not exceed Tshs. 520,000/= |
8% of the amount in excess of Tshs. |
| (iii) Where the total income exceeds 520,000/= but does not exceed 760,000/= |
Tshs. 20,000/= plus 20% of the amount |
| (iv) Where the total income exceeds 760,000/= but does not exceed 1,000,000/= |
Tshs. 68,000/= plus 25% of the amount |
| (v) Where the total income exceeds 1,000,000/= |
Tshs. 128,000/= plus 30% of the |
Note: Threshold per annum: Annual Income of Tshs. 3,240,000/= is not taxable
Worked example:
Income of Tsh. 520,000/= Tax is (520,000-270,000) x 8%=Tsh. 20,000/=
Income of Tsh. 760,000/= Tax is 20,000 + (760,000-520,000) x 20%=Tsh. 68,000/=
Income of Tsh. 1,000,000/= Tax is 68,000 + (1,000,000-760,000) x 25%=Tsh. 128,000/=
Income of Tsh. 1,240,000/= Tax is 128,000 + (1,240,000-1,000,000) x 30%=Tsh. 200,000/=
B: Resident Individual Income Tax (Tanzania Zanzibar)
| Monthly Income | Tax Rate |
| (i) Where total income does not exceed Tshs 150,000/= | NIL |
| (II) Where total income exceeds Tshs 150,000/= but does not exceed 360,000/ | 13% of the amount in excess of Tshs 150,000/= |
| (ii) Where total income exceeds Tshs 360,000/= but does not exceed Tshs 540,000/= | Tshs 27,300/= plus 20% of the amount in excess of Tshs 360,000/= |
| (iii) Where total income exceeds Tshs 540,000/= but does not exceed Tshs 720,000/= | Tshs 63,300/= plus 25% of the amount in excess of Tshs 540,000/= |
| (iv) Where total income exceeds Tshs 720,000/= | Tshs 108,300/= plus 30% of the amount in excess of Tshs720,000/= |
NOTE:
- Income of a non-resident employee of a resident employer is subject to withholding tax of 15%. However, the total income of non-resident individual is chargeable at the rate of 20%.
- The monthly income include basic salary, overtime, bonus, commission, allowances e.g. house allowance or transport allowance and benefits in kind received in lieu of employment but after deducting the contribution to the approved retirement Fund
C: Skills and Development Levy (SDL)
Rate is 5% of the monthly gross emolument for Tanzania Mainland and Zanzibar.
There are Exempted employers from SDL which are the following:
- A government department or a public institution which is wholly financed by the Government
- Diplomatic Missions
- The United Nations and its organizations
- International and other foreign institutions dealing with aid or technical assistance
- Religious institutions whose Employees are solely employed to administer places of worship, to give religious instructions or generally to minister religion
- Charitable organizations
- Local Government Authority
- Farm employers whose employees are directly and solely engaged in farming
NOTE:
- The gross emoluments include wages, salary, leave pay, sick pay, payment in lieu of leave, fees
- Commission, gratuity, bonuses, any subsistence, travelling or entertainment allowances
D: WORKERS COMPENSATION
All employers in the public and private sectors in Mainland Tanzania are required to contribute to the Fund.
| CONTRIBUTION | RATE |
| Employers in Public sector | 0.5% of employees’ earnings |
| Employers in Private sector | 1% of employees’ earnings |
E: SOCIAL SECURITY FUND
Contributions to the Fund, The contribution payable by the employer to the Fund shall be 20% of the employee’s monthly salary whereby 5% will be deducted from the employee’s salary and 15% will be contributed by the employer. The stipulated rate of contribution may change by order of the Minister responsible for Finance published in the Gazette.