Hiring in Tanzania: the work permit, the contract and what comes off pay, step by step

Move someone who is already in Tanzania

A work permit cannot be transferred. It is valid only for the purpose it was issued for. A Class B residence permit lapses when the holder stops working in the employment it names. The employer it names reports that to immigration within 30 days. A foreign national who moves to a new employer needs permits for the new employment.

A Tanzanian citizen needs no permit. Their move turns on the notice their current contract sets, which is at least 28 days in writing for monthly-paid staff.

Check the role is open to a non-Tanzanian

The Labour Commissioner approves a work permit only once satisfied that efforts were made to find a local expert. The person must have the qualifications, knowledge and skills the job needs. Where a professional body regulates the post, such as accountancy, engineering, medicine or banking, the application includes its certification.

The Commissioner takes account of the regional and bilateral agreements Tanzania has signed. An employer of non-citizens files a return on them with the Labour Commissioner for each half of the year, naming the Tanzanian nationals who succeed those who leave.

Set the contract up right

A contract of employment is in writing. It runs for an unspecified period, for a specific task, or for a fixed term in the cases the Act lists. Those cases include extra work not expected to last beyond 12 months, a graduate trainee for up to 24 months, a specific project, seasonal work, and a non-citizen whose work permit runs for a set time. Where an employer materially breaches a fixed term, an arbitrator or the Labour Court can order it to pay the remuneration for the rest of the term.

From the first day, the employee has written particulars: the job description, the place of work, the hours, the form and length of the contract, and the pay and how it is worked out. The employer keeps them for five years after employment ends. The employer also registers each employee with a health insurance scheme, under the Universal Health Insurance Act.

Ordinary hours are up to 45 a week over six days, and nine a day. Overtime is worked only by agreement, up to 50 hours in any four weeks, and no day runs past 12 hours. It is paid at one and a half times the basic wage at least. Work on the weekly rest day or a public holiday is paid at twice the basic wage. Between working days there are at least 12 consecutive hours' rest, unless a written agreement shortens it. Each week carries at least 24 hours' rest. More than five hours' continuous work earns a break of at least 60 minutes.

Minimum wages are set by sector. Where no sector rate applies, the minimum is TZS 175,000 a month. In the private sector, an employee is also owed a leave travel allowance once in every two years of continuous service.

Know the employee test before you engage a contractor

Tanzania's Employment and Labour Relations Act treats as an employee anyone under a contract of employment. It also covers anyone who undertakes to work personally for someone who is not their client or customer.

The Labour Institutions Act presumes that someone who works for another person is an employee, whatever their contract says, where any one of several signs is present. The other person controls how they work or their hours. They are part of the organisation. They have worked for that person for at least 45 hours a month on average over the last three months. They depend on that person economically, use tools that person provides, or work only for that person. The presumption holds until the contrary is proved.

A non-citizen does not work for reward in Tanzania without a valid work permit or a certificate of exemption. A role that needs a work permit goes through employer of record.

Know what comes off pay each month

The NSSF takes 20% of the wage each month. Up to 10% can be deducted from the employee, and the employer pays the rest, or all of it. Contributions are paid within a month of the month's end. A late contribution has 5% added for each month or part of a month it is late. Foreign employees on the mainland are covered too.

The employer pays the Workers Compensation Fund 0.5% of employees' earnings, by the end of the month after. None of it comes from pay. An employer with 10 or more employees pays the skills development levy at 3.5% of gross pay.

Income tax is withheld on monthly bands. For a resident, nothing is due on the first TZS 270,000. Then 8% is due up to TZS 520,000, 20% up to TZS 760,000, 25% up to TZS 1,000,000 and 30% above it. For a non-resident employee, income tax is withheld at 15% of gross employment income, and that is the final tax on it. Income tax and the skills levy are paid within seven days of the month's end.

Know the leave your people are entitled to

End employment on the law's terms

Notice is in writing, with the reasons and the date. It is at least seven days in the first month, then four days for staff paid by the day or the week and 28 days for monthly-paid staff. It is not given during leave, or run alongside it. The employer can pay the notice period instead.

Once employment reaches six months, a termination rests on a valid and fair reason and follows a fair procedure. The reason is the employee's conduct, capacity or compatibility, or the employer's operational requirements. Where a termination is unfair, compensation runs from 6 to 12 months' remuneration for an unfair procedure, and from 12 to 18 for an unfair reason. It runs up to 20 months for both, and up to 24 where the termination was for discrimination or harassment.

A retrenchment needs notice as soon as it is contemplated, the relevant information disclosed, and consultation on the reasons, the selection and severance pay.

Severance is owed once service reaches a year and the employer ends the employment. It is at least seven days' basic wage for each completed year, up to ten years. It is not owed on a fair termination for misconduct, at retirement, or when a fixed term runs out.

On termination, the employee is paid the remuneration due, leave pay, notice pay, severance and any transport back to the place of recruitment. A certificate of service is issued.

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