Employer of Record in Tanzania

An Employer of Record, or EOR, is a company that legally hires employees on your behalf in Tanzania. This means you can build a team in the country without setting up a local legal entity, which saves you time and money. The EOR handles all the essential HR tasks like payroll, taxes, benefits, and compliance with Tanzanian labor laws. Providers like Rivermate simplify your expansion into new markets.

How an Employer of Record (EOR) Works in Tanzania

Using an EOR to hire in Tanzania is a straightforward process. The EOR acts as the legal employer, taking on the administrative and legal responsibilities of employment. This allows you to focus on managing your employee's day-to-day work and growing your business.

Here is how it typically works:

• You Find the Talent: You recruit and select the candidate you want to hire in Tanzania.
• The EOR Hires Them: The EOR then legally hires the employee under their local Tanzanian business entity.
• Contracts are Handled: A compliant employment contract is drafted and signed, outlining all terms and conditions according to local law.
• Onboarding is Managed: The EOR onboards your new hire, collecting all necessary tax and banking information to set up payroll.
• Payroll and Benefits are Administered: The EOR manages all aspects of payroll, including taxes, social security contributions, and any required benefits.
• Ongoing Compliance: The EOR stays up-to-date with Tanzania's labor laws to ensure you remain compliant.

Why use an Employer of Record in Tanzania

Using an EOR in Tanzania makes international expansion simple and efficient. It removes the significant legal and administrative burdens that come with hiring in a new country. You can enter the Tanzanian market and build a team without the need to establish a local entity, which can be a complex and costly process.

Here are some key benefits:

• Enter the Market Faster: You can hire employees and start operations in a fraction of the time it would take to set up your own company.
• Ensure Legal Compliance: EORs are experts in local labor laws, managing everything from employment contracts to termination procedures, reducing your legal risks.
• Simplify Payroll and HR: All payroll, tax withholdings, and social security contributions required in Tanzania are handled for you. For official tax information, you can refer to the Tanzania Revenue Authority (TRA) website.
• Focus on Your Business: By outsourcing HR and legal tasks, you can concentrate on your core business goals and managing your team's success.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Tanzania includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Tanzania.

Hiring in Tanzania is straightforward when you understand the local labor laws. The primary law governing employment is the Employment and Labour Relations Act of 2004. This guide simplifies what you need to know to hire talent in the country.

Employment contracts & must-have clauses

You must provide a written employment contract to every employee who works for you for more than six days in a month. The contract can be for a fixed period or an indefinite period.

Make sure each contract includes these essential clauses:

• Full names and addresses of you and your employee
• Job title and description
• Start date
• Place of work
• Working hours
• Wages and how you will calculate them
• Leave entitlements
• Notice period for termination

Probation periods

You can include a probation period in the employment contract to assess a new employee's suitability. The maximum initial probation period is 12 months. You can extend this period with the employee's agreement if you need more time for assessment. During probation, either you or the employee can end the contract with a shorter notice period, typically seven days.

Working hours & overtime

The standard workweek in Tanzania is 45 hours, with a maximum of 9 hours per day. Any work beyond these hours is overtime.

Here are the key points on overtime:

• You must pay overtime at a rate of 1.5 times the employee's regular wage.
• On public holidays, the overtime rate is 2 times the regular pay.
• An employee cannot work more than 50 overtime hours in a four-week period.
• The total number of hours worked in a day, including overtime, cannot exceed 12.

Public & regional holidays

Your employees are entitled to paid days off for public holidays. If an employee has to work on a public holiday, you must provide them with a different paid day off.

Here is a list of public holidays in Tanzania for 2025:

*Subject to moon sighting

Hiring contractors in Tanzania

You can hire independent contractors for specific projects or specialized skills. This offers flexibility and can be cost-effective since you do not pay for employee benefits like paid leave or social security contributions.

However, you must correctly classify workers. Misclassifying an employee as an independent contractor can lead to serious penalties. The authorities will look at the reality of the working relationship, not just the contract.

An Employer of Record (EOR) helps you avoid misclassification risks. An EOR legally employs workers on your behalf. This means the EOR handles all employment responsibilities, including:

• Compliant local contracts
• Payroll and taxes
• Social security contributions
• Employee benefits

Using an EOR allows you to work with talent in Tanzania without setting up a local legal entity and ensures you comply with all local labor laws.

Navigating compensation and payroll in Tanzania requires a clear understanding of the local laws. You need to follow regulations for taxes, social security, and employee benefits. This ensures you pay your team correctly and on time while staying compliant.

Payroll cycles & wage structure

You have flexibility in how often you pay your employees in Tanzania. You can run payroll daily, weekly, bi-weekly, or monthly to suit your company's policy. Just be sure to pay on the agreed-upon date.

An employee's compensation includes a few key components:

• Basic Salary: This is the foundation of an employee's pay.
• Allowances: You may offer allowances for things like housing, meals, and transport.
• Bonuses: While not required, you can offer bonuses based on your company's performance and policies.

Overtime & minimums

The standard work week in Tanzania is 45 hours. You can spread this over five or six days. Any work beyond 45 hours is overtime.

• Pay overtime at 150% of the employee's normal rate.
• For work on public holidays or rest days, pay 200% of the normal rate.

Minimum wage in Tanzania varies by industry. The government sets these rates, and you must pay at least the minimum for your sector.

Employer taxes and contributions

As an employer, you contribute to several funds for your employees.

Employee taxes and deductions

Employees also have deductions from their pay. You are responsible for withholding these amounts and sending them to the proper authorities.

In Tanzania, your employee benefits package and leave policies are about more than just compliance. They show your team you value their well being. A strong package helps you attract and keep the best talent. The Employment and Labour Relations Act of 2004 is the main law that guides what you need to provide. This includes paid time off and contributions to social security.

Statutory leave

You must provide several types of paid leave.

• Annual Leave: Employees get 28 consecutive days of paid annual leave each year. They can take this after working for at least six months.
• Sick Leave: Employees can take up to 126 days of paid sick leave in a 36 month cycle. The first 63 days are at full pay, and the next 63 are at half pay. A medical certificate is required.
• Maternity Leave: Female employees receive 84 days of paid maternity leave. This increases to 100 days for multiple births. An employee can take this leave up to four times with the same employer.
• Paternity Leave: Male employees get at least 3 days of paid leave.

Public holidays & regional holidays

Your employees are entitled to paid days off for public holidays. If they work on a public holiday, you must pay them overtime.

Some holiday dates are subject to moon sighting.

Typical supplemental benefits

Here is a look at both required and common extra benefits.

How an EOR can help with setting up benefits

Setting up a competitive benefits plan in a new country can be complex. An Employer of Record (EOR) makes it simple. We handle the details to make sure you comply with all of Tanzania's labor laws.

An EOR helps you:

• Enroll employees in the required social security funds.
• Create a benefits package that is both compliant and attractive to local talent.
• Manage payroll and ensure all contributions are made correctly and on time.
• Stay updated on any changes to labor laws, so you don't have to.

We take care of the administrative work. This frees you up to focus on growing your business and supporting your team.

When an employment relationship in Tanzania ends, you need to follow a clear process. This process, known as termination and offboarding, is guided by the Employment and Labour Relations Act of 2004. It's a system designed to be fair to both the employer and the employee. To stay compliant, you must handle final pay, benefits, and company property return according to these regulations.

Notice Periods

When terminating an employment contract in Tanzania, you must provide a written notice. The length of this notice period depends on how often the employee is paid.

• Daily or weekly employees: 4 days' notice.
• Monthly employees: 28 days' notice.

If an employee is in their first month of employment, the notice period is at least 7 days. You can choose to pay an employee their salary for the notice period instead of having them work.

Severance Pay

Employees in Tanzania may be entitled to severance pay when their employment is terminated. This applies in cases like redundancy, but not for summary dismissal due to serious misconduct.

To be eligible, an employee must have at least one year of continuous service with you. The severance amount is calculated as at least seven days' basic wage for each full year of service, up to a maximum of ten years.

How Rivermate Handles Compliant Exits

At Rivermate, we manage the entire offboarding process to ensure you comply with Tanzanian law. We handle the complexities so you can focus on your business.

Here’s how we help:

• Clear Communication: We make sure the employee understands the reasons for termination and has a chance to respond.
• Proper Documentation: We provide all termination notices in writing, clearly stating the reasons and the effective date.
• Final Payments: We calculate and process all final dues, including outstanding wages, accrued leave, and any applicable severance pay.
• Legal Compliance: Our team stays up-to-date on Tanzanian labor laws to ensure every step of the termination process is fair and lawful.

Tanzania's visa and work permit system has specific rules you need to follow. If you want to hire foreign talent, you need to understand how it works. This guide breaks down the essentials for you.

Employment visas & sponsorship realities

Getting a work permit for a foreign employee in Tanzania is a multi-step process. The most common route is the Class B work permit, which is for professionals with specific skills.

Here’s what you need to know:

• You need a local entity. To sponsor a foreign worker, you must have a legally registered company in Tanzania. This is a key requirement.
• An Employer of Record (EOR) can help. If you don’t have a local entity, an EOR can act as the legal employer for your team members in Tanzania. They handle the sponsorship, payroll, and compliance.
• The process takes time. Be prepared for the work permit application process to take between four and eight weeks. Delays can happen, especially if your paperwork isn’t in order.

What an EOR can and can’t sponsor

An EOR can sponsor most professional roles, but there are some realities to keep in mind:

• Focus on skilled positions. The Tanzanian government wants to ensure that foreign workers are not taking jobs that could be filled by local talent. You'll need to demonstrate that the role requires specialized skills.
• Succession planning is key. You’ll need to provide a plan that shows how you intend to train a Tanzanian citizen to eventually take over the role filled by the foreign worker. This is a mandatory part of the application process.
• Some roles may be harder to justify. While there aren't specific industries that are off-limits, it can be more challenging to get a work permit for a role that is not highly specialized.

Practical routes to getting a work permit

1. Direct sponsorship. If you have a registered entity in Tanzania, you can directly sponsor the employee's Class B work permit.
2. Using an EOR. If you don’t have a local entity, an EOR is the most practical route. They will sponsor the work permit on your behalf.

Here is a simplified table of the main work permit classes:

Business travel compliance

For short-term business trips, your team members will likely need a business visa. This is for activities like attending meetings, negotiating contracts, or conducting training.

Here are the key things to know:

• A business visa is not a work permit. It is for short-term activities and is typically valid for up to 90 days. You cannot use a business visa for long-term employment.
• You can apply online. Tanzania has an e-visa system that simplifies the application process.
• You’ll need supporting documents. Be prepared to provide a letter of invitation from a Tanzanian company, proof of return flights, and details about the purpose of the visit.

Key requirements for a business visa

• A passport with at least six months of validity.
• A completed visa application form.
• A recent passport-sized photo.
• An invitation letter from a host company in Tanzania.
• Business registration documents of the host company.

By understanding these realities, you can better navigate the process of bringing foreign talent to Tanzania.