Tanzania is the 2nd largest economy in East Africa which is on a steady growth path due to its thriving trade and investments. The political stability in the country gives a major boost to foreign direct investments. The importance of foreign trade to the economy of Tanzania is reflected in the combined value of imports and exports, which equals 42% of the country’s GDP. In the recent times, the government has introduced a slew of reforms to invite foreign investment, including redrawing tax codes and starting an investment promotion board.

Currency: Tanzanian Shilling

Principal Languages: Bantu Swahili; English

Government: Unitary Presidential Democratic Republic

Capital City: Dodoma

Major Cities: Dar es Salaam, Mwanza, Mbeya

Employment Contracts

Employment contracts in Tanzania can be for an indefinite period of time, for a mentioned or fixed period of time for managers and professionals, or for short-term projects. Contracts for a fixed duration cannot be for less than 12 months.

A contract with an employee must be in writing if the employee is to work outside Tanzania. The usual requirements of a contract do not apply when an employee works lesser than 6 days during a month.

Work/Time Regulations

The standard workday comprises 9 hours, which includes an hour of meal break, and the regular standard workweek is for 45 hours. A collective agreement may allow averaging of daily working hours over an agreed period that does not exceed more than a year. A written agreement may allow employees to perform work up to 12 hours during a day without receiving any payment for overtime. However, it comes with the condition that such a schedule should not be for more than 5 days or 45 hours and cannot involve more than 10 hours of overtime in a week. Employees are not allowed to work in excess of 50 overtime hours in a period of 4 weeks.

Night work is any work done between 8 p.m. and 6 a.m. Remuneration for night work is 5% higher than the regular rate, and at a 5% premium of the overtime rate when an employee is working overtime. Employers face restrictions if they make pregnant employees work at night.

More than 9 hours during a working day is treated as overtime, and workers are not allowed to work longer than 12 hours during a 24 hour period. Payment of overtime is at 1.5 times the regular pay rate. Employees are not allowed to work more than 10 hours of overtime during a week or more than 50 hours of overtime within any period of 4 weeks. If an employee works on a public holiday, remuneration for his or her work is twice the usual rate.


The public holidays on which all employees receive paid leave in Tanzania include:

  • Jan. 1: New Year's Day
  • Jan. 12: Zanzibar Revolutionary Day
  • April 7: Karume Memorial Day
  • April 26: Union Day
  • May 1: Labor Day
  • July 7: Saba Saba Day (Industrial Day)
  • Aug. 8: Farmer's Day
  • Oct. 14: Nyerere Day
  • Dec. 9: Independence Day
  • Dec. 25: Christmas Day
  • Dec. 26: Boxing Day

Tanzania also acknowledges the religious festivals of Id ul Haji, Eid el Fitr, Maulid Day, Easter, Good Friday, and Easter Monday. The specific dates of Islamic holidays change every year.

Annual Leave
Full-time employees are entitled to at least 28 consecutive days of paid leave every year. This leave does not include public holidays that may occur within the leave period. An employee who has not completed 6 months of service does not get this paid leave benefit.

At the end of every 2nd year, employers provide a travel assistance allowance to help employees pay for transportation costs when taking leave. The law does not stipulate the amount of assistance that should be paid. Instead, the employer and employee must negotiate this amount and include the terms of the arrangement in a collective bargaining agreement, human resources manual, or employment contract.

An employer cannot require or permit an employee to work during any period of annual leave. An employer may determine when annual leave is to be taken. An employer is required to pay remuneration to employees before the commencement of their leave. The law prohibits payment in lieu of leave whether an employee consents or not.

Maternity Leave
Pregnant employees are allowed to go on 84 days of paid maternity leave. An employee may start her maternity leave from 4 weeks prior to the probable date of childbirth. No employee may start work before a gap of 6 weeks post childbirth unless a medical practitioner certifies her fitness for work.

To be eligible for maternity leave, the employee needs to work for a minimum of 6 months for one employer, and she should not have taken the same leave within the last 3 years. An employee gets an additional 84 days paid maternity leave if the child dies within a year of birth or is stillborn. An employee giving birth to 2 or more children at the same time receives 100 days of paid maternity leave.

The social security system provides maternity benefits. To qualify for benefits, the insured needs to make 36 or more months of contributions which must include 12 or more months of contributions in the 36 months immediately preceding the expected childbirth date. The benefit is calculated as 100% of a pregnant employee’s average daily wage during the 6 months prior to the 20th week of pregnancy. Pregnant employees also receive postnatal and prenatal care from the 24th week of pregnancy until 2 to 12 days after childbirth.

Paternity Leave
An employee gets at least 3 days of paid paternity leave during the 7 days after childbirth if he has not taken similar leave within the last 3 years. An employer is entitled to up to 4 terms of paid paternity leave during the course of his employment with the same employer.

Sick Leave
All employees are entitled to a minimum sick leave of 126 days in any leave cycle. The first 63 days of leave are paid at full wages and any sick leave taken after 63 days is remunerated at half wages.

An employer is not required to pay an employee for sick leave if the employee fails to submit a medical certificate or if the employee is entitled to paid sick leave under any law, fund, or collective agreement.

Bereavement Leave
An employee is entitled to a minimum of 4 days of paid leave for death or sickness of a child, spouse, parent, or other close loved-one.


Tanzania's social security system funds pensions for old-age, survivors, and disability, and provides benefits on account of funeral, medical care, work injury, and maternity. Benefits are paid through employer contributions (10% of payroll), the insured person (10% of income), and voluntary contributions.

Employees who have made 180 or more months of contributions to the social security system are entitled to start taking their pension at age 60; employees who have left the country qualify for the pension at any age. An early pension is also available in the age bracket between 55 and 59 after contributions for 180 months. An old age grant is payable at the age 60 if contributions are for less than 180 months. Old-age grants are not payable when a beneficiary lives abroad.

Medical Insurance
The social security system offers medical benefits, but it does not include any cash benefits. Inpatient and outpatient health care are available for employees and their dependents.

Worker’s Compensation
Employees get coverage under worker's compensation once they are enrolled under the National Social Security Fund or the Parastatal Pension Fund. Benefits provided are:

  • The Temporary Disablement Benefit (TDB), which is 60% of the Average Insurable Daily Earnings (AIDE) based on the last 6 months of contributions before the month of accident/disease. TDB is payable for not more than 26 weeks starting from the date of the accident or illness.
  • The Permanent Disablement Benefit (PDB), provides benefits on account of permanent disability at a 100% rate. The amount to be paid is 70% of the average earnings based on the last 6 months' contribution before the month of accident or illness.

Employers in mainland Tanzania need to pay the Workers Compensation Fund tariff at the rate of 1% of monthly cash payments (wages, salaries, sick pay, commission, fees, leave pay, payment in lieu of entertainment, leave, bonuses and any subsistence, travelling or other allowances) to employees in the private sector.

Survivor Benefits
Survivor benefits are death benefits for an insured person due to an employment injury. Survivors get a pension equal to 60% of the expired person's average monthly income. If survivors qualify for another survivors' benefit under a different Act, they receive a benefit that is greater of the two or more.

How GPS can Help

With our Global PEO/Employer of Record services, companies can expand into Tanzania and hire their employees without having to establish a branch office or subsidiary in Tanzania.

  • Your candidate is hired via our Tanzania PEO. If needed, we can also help you find the right talent in any country with our comprehensive global staffing services.
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Spin Off/M&A Support

  • Ensure continuity of payroll, benefits and HR support when acquiring or spinning off a business with employees overseas.

24/7 Support in 150+ Countries

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Ready for Growth When You Are
When ready, we can seamlessly transition you from the PEO/EOR model to your own legal entity and provide ongoing international HR, finance, legal, compliance and staffing support. Learn more about our end-to-end international expansion services.