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Overview:

The Government of the United Republic of Tanzania has introduced a revised statutory minimum wage regime for private sector employees through the Labour Institutions (Minimum Wage for Private Sector) Order, 2025, which takes effect on 1 January 2026. This Order replaces the 2022 Minimum Wage Order and introduces a broader, more structured wage framework covering sixteen (16) sectors and forty-six (46) sub-sectors.

From an employer's perspective, this reform is not merely a payroll adjustment exercise. It is a compliance, workforce planning, and governance matter that requires careful review of salary structures, employment contracts, budgeting assumptions, and HR policies. Employers who act early will reduce legal exposure, maintain employee trust, and ensure continuity of operations.

This guide provides practical clarity on what the new Order requires and how employers should prepare for implementation.

Legal Context and Purpose of the Order

The Minimum Wage Order is issued under the Labour Institutions Act, Cap. 300 [R.E. 2023], empowering the Minister responsible for labour matters to prescribe legally binding wage floors for private sector employment.

The intent of the Order is threefold:

• To protect employees from unduly low wages
• To standardise minimum pay across sectors
• To promote fair and sustainable labour practices in line with prevailing economic conditions

Importantly, the prescribed wages represent minimum statutory thresholds, not recommended or average wages. Employers remain free to pay above these rates, but payment below the prescribed minimum is unlawful.

Scope of Application

The Order applies to:

• All private sector employers operating in Tanzania
• All employees, regardless of job title, contract type, or location, provided they fall within the covered sectors

The framework applies equally to:

• SMEs and large enterprises
• Local and foreign-owned companies
• Urban and rural operations

No exemption is provided based on company size or profitability.

Sector-Based Minimum Wage Structure

The Order prescribes minimum wages payable in hourly, daily, or monthly rates, depending on the sector and nature of work. Employers must first correctly classify their business activities and job roles, as misclassification is a common source of non-compliance.

The minimum wage framework applies across the following sixteen (16) sectors:

• Agriculture
• Health
• Telecommunication
• Domestic Work or Services
• Hotel and Hospitality Services
• Private Security Services
• Energy
• Transport and Shipping
• Construction
• Mining
• Private Schools and Education
• Trade and Finance
• Industrial
• Sports, Arts, Entertainment, and Gaming Activities
• Waste Collection, Processing, and Disposal Activities
• Other Sectors or Areas Not Specifically Classified

Where an organisation operates across multiple sectors, the applicable wage must be determined based on the actual duties performed by the employee, not merely the employer’s primary business registration.

Core Employer Obligations

Mandatory Wage Alignment

Employers paying below the new prescribed minimums are legally required to adjust wages by January 2026. Any payment below the applicable minimum after this date constitutes a breach of employment law and may attract enforcement action.

Protection of Existing Better Terms

The Order expressly protects employees who are already earning:

• Wages above the prescribed minimum, or
• More favourable employment terms

Employers must continue offering such terms. The new minimum wage cannot be used as a basis to reduce salaries or benefits.

Review of Employment Contracts and Policies

Employers are expected to:

• Review employment contracts for wage compliance
• Amend contracts or collective bargaining agreements where necessary
• Align internal HR policies, salary scales, and payroll systems with the new requirements

This exercise should be properly documented to demonstrate compliance during labour inspections or audits.

Allowances and Related Employment Standards

Beyond basic wages, the Order reinforces additional employment standards that employers should not overlook, including:

• Leave travel assistance: Employees who have served continuously with the same employer are entitled to travel assistance once every two years.
• Subsistence allowances: Employees assigned duties outside their normal workstation are entitled to subsistence allowances, subject to mutual agreement.
• Truck driver allowances: Employers must agree with drivers on allowances covering mileage, extended time away from base, and loading or unloading duties.

These provisions should be clearly addressed in contracts, HR policies, or operational guidelines to avoid disputes.

Practical Implementation Guidance for Employers

From an HR and governance perspective, employers are strongly advised to adopt a structured compliance approach:

1. Conduct a payroll and job classification audit against the new sector rates
2. Update payroll systems to reflect revised minimums before the end of January 2026
3. Revise employment contracts and salary scales where required
4. Communicate changes clearly to employees to manage expectations and maintain trust
5. Plan financially for increased labour costs in the 2026 budget cycle
6. Maintain clear records to demonstrate compliance during inspections

Early action reduces last-minute risk and positions the organisation as a responsible and trustworthy employer.

Strategic Importance for Employers

While compliance is mandatory, the new Minimum Wage Order should also be viewed strategically. Proper implementation can:

• Improve employee morale and retention
• Reduce wage-related disputes
• Strengthen the employer’s reputation with regulators, clients, and partners
• Support long-term workforce sustainability

Employers who treat this as a governance and people-management issue, rather than a simple legal obligation, are likely to achieve better outcomes.

Conclusion

The Labour Institutions (Minimum Wage for Private Sector) Order, 2025, effective 01 January 2026, introduces a comprehensive and enforceable minimum wage framework for Tanzania’s private sector. Employers are legally required to align wages, contracts, and HR practices with the new standards within the prescribed timeframe.

Proactive compliance will not only ensure adherence to the law but will also reinforce fair employment practices, organisational stability, and positive employee relations.

Summary of Minimum Monthly Wages by Sector

1. Agriculture Sector

• Crop or animal production and related activities: TZS 175,000
• Forestry activities: TZS 185,000
• Fishing and fish farming (aquaculture): TZS 300,000

2. Health Sector

• Hospitals: TZS 250,000
• Health centres / Polyclinics / Pharmacies: TZS 240,000
• Dispensaries: TZS 230,000

3. Telecommunication and Communications Sector

• Programme, advertising and media services: TZS 289,000
• Telecommunication services: TZS 644,000
• Call centres: TZS 380,000

4. Domestic Work or Services Sector

• Domestic workers employed by diplomats and major businessmen: TZS 328,000
• Domestic workers employed by entitled officers: TZS 265,000
• Non-resident domestic workers (excluding diplomats and entitled officers): TZS 160,000
• Other domestic workers: TZS 80,000

5. Hotel and Hospitality Services

• Five-star and four-star hotels: TZS 375,000
• Three-star hotels: TZS 225,000
• One- and two-star hotels, guest houses, bars and restaurants: TZS 195,000
• Tourist luggage porters: TZS 225,000
• Tour guides: TZS 320,000
• Hunting and related activities: TZS 200,000

6. Private Security Services

• International companies: TZS 292,000
• Domestic companies: TZS 197,000

7. Energy Sector

• International companies: TZS 765,900
• Domestic companies: TZS 297,000

8. Transport and Shipping Sector

• Aviation services: TZS 498,000
• Freight clearing and forwarding: TZS 464,000
• Inland transport services: TZS 398,500
• Postal and courier services: TZS 287,500

9. Construction Sector

• Contractors Class I: TZS 515,000
• Contractors Class II – IV: TZS 464,500
• Contractors Class V – VII: TZS 398,500

10. Mining Sector

• Mining and mineral prospecting: TZS 695,000
• Primary mining licence holders: TZS 397,600
• Dealer licence holders: TZS 595,000
• Broker licence holders: TZS 333,500

11. Private Schools and Education Sector

• Pre-primary and primary schools: TZS 276,500
• Secondary schools: TZS 281,300
• Colleges and vocational training institutions: TZS 281,500
• Higher education institutions: TZS 300,700

12. Trade and Finance Sector

• General business activities: TZS 200,500
• Commercial banks: TZS 733,000
• Community service banks: TZS 698,400
• Micro-credit financial institutions: TZS 699,000
• Insurance companies: TZS 699,700
• Other financial institutions: TZS 699,500

13. Industrial Sector

• All industrial activities: TZS 200,000

14. Sports, Arts, Entertainment and Gaming Activities

• All activities: TZS 287,500

15. Waste Collection, Processing and Disposal Activities

• All activities: TZS 188,500

16. Other Sectors or Areas Not Specifically Classified

• Minimum applicable wage: TZS 175,000

This article is intended for general guidance only and does not constitute legal advice. Employers are encouraged to seek professional HR or legal support for sector-specific interpretation and implementation.