HESLB loan deductions from your salary: 15 percent, timing and checks

The rule: at least 15 percent of basic salary

The 2016 amendments to the HESLB Act set the deduction. Once HESLB confirms that an employee is a loan beneficiary, the employer must deduct monthly instalments of not less than 15 percent of the beneficiary's basic salary, wages or remuneration. The law treats it as a statutory deduction and makes it a first charge over non-statutory deductions, so it comes before a SACCOS contribution or a bank loan.

Basic salary TZS 600,000: at least TZS 90,000 a month.
Basic salary TZS 1,000,000: at least TZS 150,000 a month, the example HESLB gives itself.

The percentage is of basic salary. Allowances that are not part of basic pay are not the base the Act names.

When repayment starts

Repayment becomes due when you complete your studies, or when they end for any other reason. The Act obliges you to start repaying after two years from that date, and lets you start earlier if you want to. HESLB describes it the same way: repayment starts within or after 24 months. Under the Act, the deduction starts when your employer reports you and HESLB confirms the loan.

What your employer must do

The Act gives every employer four duties:

• tell HESLB within 28 days when it employs anyone with a degree or diploma;
• after HESLB confirms the person is a beneficiary, deduct at least 15 percent of basic salary each month;
• pay each deduction to HESLB within 15 days after the end of the month;
• inform HESLB of the employee's status, rank and later changes of name, address, job and salary.

An employer that does not deduct or does not pay over the deductions in time is charged 10 percent of the amount due for each month it remains unpaid. Failing to notify HESLB without a reasonable excuse is an offence with a fine of not less than TZS 1 million.

What you must do

The duties are not only your employer's. The Act says a beneficiary who gets a job must tell the employer about the loan and make sure the deduction is arranged. After your studies, HESLB asks you to write to it with your location and employment status. HESLB says a beneficiary should be given a loan statement after completing studies, and its beneficiary portal is linked from heslb.go.tz. Keep the statement with your payslips.

Self-employed or between jobs

If you work for yourself, the Act requires you to agree an instalment plan with HESLB. The monthly amount must be not less than TZS 100,000 or 10 percent of your taxable income, whichever is greater. HESLB's own page states the TZS 100,000 minimum. If you are between jobs, keep HESLB informed of your address and status, so the loan record follows you to the next employer.

Check the HESLB line on your payslip

Look for a deduction named HESLB or Bodi ya Mikopo. Check three things:

• the amount is at least 15 percent of your basic salary, not of your gross pay with allowances;
• it appears every month once it has started;
• the total paid matches your HESLB statement after a few months.

If the line is missing more than two years after you finished studying, ask HR whether they reported you to HESLB within 28 days. If money is deducted but not shown on your statement, raise it with HR first and then with HESLB, with your payslips as evidence. How to read every line of a Tanzanian payslip.

A note for Zanzibar graduates

HESLB is the Union loans board. Zanzibar has its own Higher Education Loans Board (ZHELB), linked from the HESLB website. If your loan came from ZHELB, its own repayment rules apply.

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