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Income Tax Calculator In Tanzania

Estimate your income tax in seconds with our PAYE calculator using accurate TRA PAYE rates. Ideal for anyone needing a PAYE calculator or simply learning how to calculate income taxes in Tanzania.

TSh
Gross Income
TSh 600,000
Take-home Pay
TSh 564,000
PAYE Tax
TSh 36,000
Effective Rate: 6.0%
Marginal Rate: 20%

Your monthly income of TSh 600,000 falls under the 20% tax bracket, resulting in an effective tax rate of 6.0%. Your net PAYE tax is TSh 36,000.

Note that PAYE is calculated after deducting NSSF or PSSSF contributions from your gross income. You can also estimate the tax on your salary using our salary calculator.

PAYE Summary

Overview of your monthly PAYE figures

ItemAmount
TimeframeMonthly
Gross IncomeTSh 600,000
PAYE TaxTSh 36,000
Take-home PayTSh 564,000
Effective Tax Rate6.0%
Marginal Tax Rate20%

Understanding PAYE in Tanzania

Pay As You Earn (PAYE) is a system of income tax collection in Tanzania where employers deduct tax from employees' salaries before paying them. This ensures continuous tax collection throughout the year.

PAYE applies to employment income including salaries, wages, bonuses, overtime pay, and other benefits. The tax is calculated based on progressive tax brackets, meaning higher earners pay higher rates.

All employers in Tanzania are required to register for PAYE and deduct tax from their employees' salaries before remitting it to the Tanzania Revenue Authority (TRA).

Tanzania uses a progressive tax system with the following monthly brackets for Tanzania Mainland:

TSh 0 - 270,0000% (NIL)
TSh 270,001 - 520,0008% of excess above TSh 270,000
TSh 520,001 - 760,000TSh 20,000 + 20% of excess above TSh 520,000
TSh 760,001 - 1,000,000TSh 68,000 + 25% of excess above TSh 760,000
Above TSh 1,000,000TSh 128,000 + 30% of excess above TSh 1,000,000

Note: Annual income threshold of TSh 3,240,000 is not taxable (equivalent to TSh 270,000 monthly).

Individual traders who are not under presumptive tax regime must comply with specific requirements:

  • Keep proper records of all business transactions
  • File provisional returns on or before 31st March
  • Pay tax based on taxable income for the year
  • File final returns with audited financial statements by 30th June
  • Submit returns to TRA within the specified deadlines

These individuals pay tax using the same progressive rates as PAYE employees, calculated on their annual taxable income.

Important: Under the presumptive system, individuals are not obliged to file returns but can pay by installments if the assessed amount exceeds TSh 50,000 per year.

Provisional Returns (Form ITX200.01.E)

Estimated tax must be filed within 3 months of the year beginning, with payments in 4 installments:

1st Payment:On or before 31st March
2nd Payment:On or before 30th June
3rd Payment:On or before 30th September
4th Payment:On or before 31st December

Final Returns (Form ITX201.01.E)

Must be filed within 6 months after the tax year ends (between 1st January and 30th June).

The Commissioner may extend filing deadlines upon written application with appropriate terms and conditions.

The Income Tax Act requires every individual liable for tax to maintain comprehensive documentation:

  • All documents necessary for accurate tax determination
  • Records must be retained for at least 5 years from the end of the relevant tax year
  • Documents not in official languages must be translated by TRA-approved translators
  • Business and investment financial information
  • Supporting calculations and supplementary documentation

Tip: Keep copies of all completed returns and supporting documents for your own records.

Return Form Components

The return form consists of seven pages plus supplementary pages for:

  • Gains from realization of shares and securities
  • Gains from realization of assets (excluding shares, securities, or trading stock)
  • Repatriated income of domestic permanent establishment
  • Income from general insurance business
  • Income from life insurance business
  • Income from mining operations

Submission Guidelines

  • Round down revenue figures, round up tax credits and deductions to nearest shilling
  • Don't delay submission even if some information is missing - estimate and indicate
  • Sign and date the declaration before submission
  • Include all supporting calculations, supplementary pages, and audited accounts
  • You are responsible for filing a correct return - penalties apply for false information

Important: Contact your nearest TRA Office or Call Centre if you need assistance completing your return or require supplementary pages.

Before calculating PAYE tax, certain deductions are made from gross income:

  • NSSF Contributions: National Social Security Fund contributions (worker's portion)
  • PSSSF Contributions: Public Service Social Security Fund (for public servants)
  • LAPF Contributions: Local Authorities Provident Fund (for local government employees)
  • Other approved pension schemes

The standard NSSF contribution rate is 10% of basic salary (5% employee + 5% employer), with a maximum monthly contribution ceiling.

PAYE tax is then calculated on the income remaining after these deductions.

Employers in Tanzania have several PAYE-related responsibilities:

  • Register for PAYE with Tanzania Revenue Authority (TRA)
  • Deduct correct amount of PAYE tax from employee salaries
  • Remit PAYE tax to TRA by the 15th of the following month
  • Submit monthly PAYE returns
  • Issue P9A forms (tax deduction cards) to employees
  • Submit annual returns and reconciliation

Penalties: Late payment or non-compliance attracts penalties and interest charges from TRA.

Employers must keep proper records of all PAYE transactions for audit purposes.