When you enter the benefits planning stage of your company’s global growth journey, you’ll have several factors to consider, such as labor laws and market standards. If you plan strategically, you can use your benefits program to achieve success in Tanzania.
Tanzania employee benefits plans
Your company’s benefits packages can bolster growth in key ways. During recruitment, competitive benefits can persuade job seekers to apply for your vacancies.
Internally, employee provisions can improve team morale and increase retention rates. Higher retention leads to a more experienced workforce and fewer onboarding costs over time. Possible benefits include:
- Transportation allowances
- Company cell phones
- Data and internet allowances
- Meal vouchers
- Housing allowance
Required benefits in Tanzania
While some benefits are optional, others are compulsory. The country’s labor laws require employers to provide a series of provisions, including:
- Annual leave
- Paid sick leave
- Time off for public holidays
- Maternity leave
- Paternity leave
- Social security contributions
Collective agreements exist within some industries that require additional minimum requirements.
Designing Tanzania employee benefits plans
Benefits requirements and employee expectations vary around the world, but you can follow these fundamental steps to create a competitive plan in any country.
1. Evaluate your finances
Your company will need to dedicate resources to benefits. Assess your earnings and expenses to determine how much you’re willing and able to spend.
2. Research other employers
To compete with other companies, you’ll need to provide benefits that are standard in the labor market. Research local employers to learn about their packages to identify commonalities that job seekers may expect.
3. Select benefits
Based on your research, choose provisions for your team. First, allocate funding to the required benefits as needed, then use your remaining budget for optional provisions.
Average cost of benefits
Factors such as industry, location, and size can influence how much a company puts toward its program. With so much variation, a national average cost isn’t a useful parameter.
Creating a sustainable budget is the best way to guide your spending. You can dedicate a specific percentage of your revenue to benefits. As your company grows, your budget will automatically scale with it.
How to calculate employee benefits
Benefits calculations will vary depending on the provision. Calculations for benefits such as bonuses and allowances are simple. You can set an amount and distribute it evenly among your workforce.
Other calculations, such as social security contributions, are more complex. Employers are responsible for making contributions to the social security fund for every employee at 10 percent of the employees’ salaries, and employees contribute another 10 percent from their salaries.
How are employee benefits taxed in Tanzania?
Generally, benefits in cash and in kind are subject to income tax. Employers should tax benefits in kind according to market value. The country’s laws outline additional valuation regulations regarding:
- Housing benefits
- Company cars
- Preferential loans
For example, the value of a company car is determined by the engine size and age of the vehicle. It’s essential to understand these regulations to ensure compliance with income tax laws.
Employee health benefits
Tanzania provides low-cost and free health care via the NHIF, a government health fund; however, companies may provide private health insurance as a fringe benefit.
How Globalization Partners can help scale your teams in Tanzania
Globalization Partners’ global employment platform helps you build and scale an international team quickly and easily, ensuring all benefits offered to candidates are compliant and in line with local regulations. Learn more about our platform and request a proposal today.