Tanzania SDL and WCF Explained
If you employ staff in Tanzania, you'll likely pay the Skills Development Levy (SDL) and the Workers Compensation Fund (WCF) on top of salaries. This guide explains what each one is, how the rates work, and who's liable — so you know what to budget.
The short answer: SDL is 3.5% of total gross monthly payroll for employers with 10 or more staff. WCF is 0.5% of cash paid to employees for every employer, regardless of size. Both are employer costs, not deductions from pay.
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Maintained by David M at Delta Tech Solutions · Figures last checked 19 October 2026 · Next check due 19 April 2027
Content updated 21 October 2026
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What the Skills Development Levy Is
The Skills Development Levy (SDL) is a payroll levy charged at 3.5% of the total emoluments paid to all employees during the month. It rests on section 14 of the Vocational Education and Training Act, Cap. 82, and the Tanzania Revenue Authority administers it. The money goes towards vocational education and training. SDL is due from any employer who employs ten or more employees, and it is not due below that.
What the Workers Compensation Fund Is
The Workers Compensation Fund (WCF) is a mandatory insurance scheme that compensates employees for workplace injuries and occupational diseases. The employer pays 0.5% of the cash paid to employees, at a unified rate for all sectors. WCF applies to all employers regardless of size, so there is no employee threshold to cross. Even a business below the ten-employee threshold contributes, and the fund pays out when a worker is injured or contracts an occupational disease at work.
How the Two Bases Differ
The two levies do not share a base. Your employer pays SDL on the total emoluments for everyone on the payroll that month, and WCF on the cash paid to employees, so both grow as you hire and as wages rise. On a growing payroll both rise as you hire and as wages increase, but the SDL figure moves with total emoluments and the WCF figure follows cash paid out. Treat both as variable costs that scale with the payroll rather than fixed monthly amounts.
| Levy | Rate | Base | Who pays |
|---|---|---|---|
| SDL | 3.5% | Total gross monthly emoluments | Employer with 10+ employees |
| WCF | 0.5% | Cash paid to employees | Every employer |
The Ten-Employee Threshold
SDL is due from any employer who employs ten or more employees, and it is not due below ten. The threshold counts employees, not a portion of payroll, so the question is how many people are on the books. Once you cross it, the levy applies to the whole payroll, not only to the tenth employee onward. A business below the threshold pays no SDL; one with ten pays 3.5% on the full monthly emoluments.
Who Bears the Cost
Your employer does not take either levy out of your wages. Both SDL and WCF are employer-borne on-costs, paid on top of gross salary. An employee's payslip therefore shows gross pay and any employee deductions, such as PAYE, but it will not show an SDL or WCF line. The employer's cost per head is higher than the gross salary the employee sees, because the employer pays the levies on top.
What SDL and WCF add to a 1,000,000 TZS payroll
On a 1,000,000 TZS payroll, SDL comes to 35,000 TZS at 3.5% and WCF comes to 5,000 TZS at 0.5%. Those two figures sit on top of the NSSF employer contribution, which is 10% in the private sector. PSSSF employer contribution is 15% in the public sector. The example assumes ten or more employees, because below ten the SDL figure falls away while WCF is still due.
Baraka's firm in Arusha crossed ten staff last year, and that is the month SDL started to appear on his returns. WCF has been due since his first employee.
Filing and Administration
SDL is a levy administered by the Tanzania Revenue Authority, which collects it alongside the other payroll taxes. PAYE is remitted by the 7th of the following month, so the employer's monthly payroll calendar carries a fixed early deadline. Keeping clear records of emoluments and cash paid to employees makes both levies straightforward to support if the authority asks questions. WCF is paid into the fund rather than to TRA.
Results are estimates provided for information only and do not constitute financial, legal or tax advice. Consult a qualified professional before making financial decisions.
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Tanzania SDL and WCF Explained FAQs
Do SDL and WCF use the same base?
No. SDL is calculated on the month's total emoluments for everyone on the payroll; WCF is calculated on cash paid to employees. Both move as you hire and as wages change, but only SDL follows headcount.
What happens to SDL once a business reaches ten employees?
It starts at ten employees and applies to the whole payroll from then on, not just to the tenth salary. Nine employees means no SDL; ten means 3.5% of the entire month's emoluments.
Are SDL and WCF deducted from employees' pay?
No. Both are employer-borne — they're paid on top of salaries and never deducted from the employee.
When must SDL be paid?
SDL is a monthly levy paid to TRA with the monthly return. Confirm the current filing date with TRA, because a late return can attract penalties and interest.
Is WCF charged on all employees?
The employer pays WCF on the cash paid to employees, not the employee. It applies to all employers, but the Fund's rules determine which workers are covered; confirm the position with WCF.