What PAYE is
PAYE — Pay As You Earn — is the mechanism by which employers withhold employees' income tax from their pay each period and remit it to the Tanzania Revenue Authority (TRA). The employee's tax is collected gradually across the year rather than in one lump sum.
The employer's responsibilities
- Calculate the correct PAYE on each employee's taxable pay for the period.
- Withhold it from net pay and keep it separate from the business's own funds.
- Remit it to TRA by the applicable deadline, with the required return.
- Keep accurate records, including each employee's TRA TIN.
How PAYE is calculated (in principle)
PAYE is generally applied to taxable employment income using a set of income bands, so higher earnings are taxed at higher marginal rates, with certain amounts exempt or treated separately. The specific bands, rates and thresholds are set by law (the Income Tax Act and annual Finance Acts) and change over time.
Because these figures change, this guide deliberately does not quote rates. Always use the current figures published by TRA, or software that maintains them for you.
Keeping PAYE right without a rate spreadsheet
KaziPeople maintains effective-dated PAYE rules for Tanzania that are reviewed against current law before publishing, and applies the correct rules for each payroll period. You get PAYE computed automatically, payslips that show it, and the TRA return files you need — without maintaining a rate spreadsheet yourself.
This article is general information for employers, not tax or legal advice. Statutory rules change; confirm current obligations with a qualified adviser or the relevant authority (e.g. the TRA and the funds). KaziPeople maintains effective-dated payroll rules reviewed against current law before publishing.