How to read your payslip in Tanzania: PAYE, NSSF and HESLB

Your right to a payslip

Under section 27 of the Employment and Labour Relations Act, every payment of pay must come with a written statement of particulars. The Employment and Labour Relations (General) Regulations, 2017 say every employee is entitled to this statement, and list what it must contain:

• your name;
• the date, month and year of the payment;
• the employer's name or logo;
• your employment or check number;
• statutory deductions;
• other deductions;
• gross or basic salary;
• net salary.

The Act says pay is made on the agreed pay day, in cash unless you agree to another method, such as a cheque or a direct deposit into an account you have named in writing. The regulations say pay is made monthly, or for another period the parties agree. Ask for your payslip every pay day and keep them all. You will need them for loans, visa applications, NSSF checks and any dispute.

Basic pay, allowances and gross pay

Basic pay, or basic wage, is the part of your pay for the hours you ordinarily work. The Act says it does not include allowances, overtime pay, extra pay for Sunday, rest day or public holiday work, or night work pay. Many rights are calculated on the basic wage, including overtime, leave pay and severance, so check that your basic pay is shown separately.

Gross pay is your total pay before deductions: basic pay plus allowances and any overtime for the month. Net pay is what reaches you after deductions. When an employer quotes a salary, ask which of the three it means.

NSSF: your pension contribution

If you work in the private sector on Tanzania Mainland, NSSF says the total contribution is 20% of your wage, and your own share cannot be more than 10%. The common arrangements are 10% from you and 10% from the employer, or 5% from you and 15% from the employer. Only your share appears as a deduction. Public servants on the Mainland contribute to PSSSF instead. Read the full NSSF guide.

PAYE: how income tax is worked out

PAYE is the income tax your employer must deduct from your taxable pay. TRA says approved pension contributions are taken off gross pay first, so PAYE is worked out on gross pay minus your pension contribution, up to the limits TRA describes. TRA publishes these monthly rates for a resident individual on the Mainland:

• up to TZS 270,000: nil;
• over TZS 270,000 up to TZS 520,000: 8% of the amount above TZS 270,000;
• over TZS 520,000 up to TZS 760,000: TZS 20,000 plus 20% of the amount above TZS 520,000;
• over TZS 760,000 up to TZS 1,000,000: TZS 68,000 plus 25% of the amount above TZS 760,000;
• over TZS 1,000,000: TZS 128,000 plus 30% of the amount above TZS 1,000,000.

If you have a second job, TRA says your secondary employer withholds tax at the highest individual rate, and you must tell each employer which job is your primary one.

HESLB: student loan repayment

If you received a higher education loan, HESLB says your employer must deduct 15% of your basic salary each month and send it to the Board. HESLB also says employers must report newly employed diploma and degree graduates within 28 days of employment, and that repayment starts after 24 months from completing or leaving studies. An employer that fails to deduct and remit on time is charged 10% of the monthly deduction. Self-employed graduates repay at least TZS 100,000 a month.

TRA's guidance lets pension contributions reduce taxable pay. A HESLB repayment is a loan repayment, so in the example below it comes out after tax, as in our take-home pay calculator. If your payslip treats it differently, ask payroll to explain.

A worked example

The salary in the example is invented. Use the take-home pay calculator for your own figures, and enter any HESLB, loan or union deductions as other deductions.

Costs your employer pays, not you

Some payroll costs are paid by the employer on top of your pay and should not be deducted from you:

• the employer's NSSF share;
• the Skills and Development Levy, which TRA says employers with ten or more employees pay at 3.5% of total monthly emoluments;
• the Workers Compensation Fund contribution, which WCF says employers pay at 0.5% of employees' earnings, and which WCF says must not be deducted from employees' wages.

Some payslips show these lines for information. That is fine, as long as they do not reduce your net pay.

Deductions your employer may not make

Section 28 of the Act says an employer may only deduct from your pay if the deduction is required or permitted by a written law, a collective agreement, a wage determination, a court order or an arbitration award, or if you agree in writing to a deduction for a debt.

A deduction to repay the employer for loss or damage is allowed only if the loss happened at work through your fault, the employer has told you in writing the cause, amount and calculation, you had a fair chance to challenge it, the amount is not more than the actual loss, and total deductions of this kind do not exceed one quarter of your pay in money. An employer may not make you repay pay, except an overpayment caused by a calculation error, and may not make you sign for more than you actually received.

Check every payslip

Each month, compare your payslip with your contract and your own records:

• Is the basic pay the figure in your contract?
• Are overtime, night hours and public holiday work paid? Check the hours rules.
• Is the NSSF share no more than 10% of your wage?
• Does the PAYE match the TRA bands for your taxable pay?
• Do you recognise every other deduction, and did you agree to it in writing?

If something is wrong, raise it in writing with payroll or human resources and keep a copy. If it is not corrected, a pay dispute can be referred to the Commission for Mediation and Arbitration within 60 days of the dispute arising. Read the CMA guide.