PAYE Tax in Tanzania — A Complete Employer Guide (2026)
PAYE (Pay As You Earn) is Tanzania's monthly income tax, withheld by employers on every employee's salary. The brackets are graduated — 0%, 9%, 20%, 25%, 30% — and the rules around bonuses, allowances, and non-residents trip up most first-time employers. Here's the 2026 guide.
PAYE brackets (2026)
Up to TZS 270,000/month: 0%. Then graduated bands: 9%, 20%, 25%, 30%. NSSF and NHIF deductions reduce taxable income. Use our free PAYE calculator to see exact figures.
Compliance
Withhold from each employee's salary monthly. Pay TRA by the 7th of the following month. File monthly return (form ITX-200). Issue P9 forms annually. Maintain payslip records for 5 years.
Common mistakes
Forgetting that NSSF deductions reduce PAYE-taxable income (saves the employee money). Mis-classifying allowances (housing, transport, medical) — most are taxable, some have caps. Treating part-time staff as exempt — they're subject to PAYE if income exceeds TZS 270,000/month.