PSSSF or NSSF: Which Fund Your Employee Belongs To

This page is the fund-membership operating file: which of the two mandatory social-security funds an employee belongs to, and what leaves payroll once that is settled. It is not a benefits calculator and not a pension-claim guide.

• Immigration stay for a foreign hire: residence permits
• Entry pass against working status: business visa and residence
• Premises registration for the same staff: OSHA registration
• Site approvals before anyone is hired: building permits

As at 14 September 2026. Membership is confirmed on the fund’s own register (nssf.go.tz or psssf.go.tz), and rests on Cap. 50 and on Act No. 2 of 2018.

The dividing line is the employer, not the employee

Tanzania has run one public-service fund and one private-sector fund since 1 August 2018, when the public-service statute folded PPF, PSPF, LAPF and GEPF into PSSSF and the accompanying amendments left NSSF holding everyone else on the Mainland.

Membership turns on the legal character of the employing entity. A ministry, an executive agency, a local government authority and a public institution staffed under the public service all report to PSSSF. A company incorporated under the Companies Act Cap. 212 reports to NSSF, whether the shareholder is a Tanzanian family, a foreign investor or the Treasury Registrar. Nationality, job title, contract length and salary band change nothing.

Parastatals sit on the awkward edge. A body corporate created by its own Act, staffed on public-service terms, belongs with PSSSF. A state-owned company hiring under ordinary contracts of service does not. Where the constituting instrument is silent, take the answer from the fund’s registration desk in writing, not from the shareholding, and not from what a predecessor payroll officer assumed.

Non-citizen staff: the permit desks run first

Before a foreign employee reaches either fund, two other desks decide whether the post may exist. The Non-Citizens (Employment Regulation) Act No. 1 of 2015 puts the work permit with the Labour Commissioner. The residence permit sits with the Immigration Department under the Immigration Act Cap. 54. GN No. 487A of 2025 reserves defined activities for citizens, and a role inside a reserved activity is not rescued by a willing employer or a generous salary.

Once both permits issue and the contract runs, the non-citizen becomes an ordinary member of the employer’s fund, in practice NSSF, since private employers hire almost all expatriates. No blanket exemption applies to foreign staff. Where a home-country scheme or a bilateral arrangement is relied on, put that position to the registration desk and keep the written reply in the member file. A schedule that quietly omits the expatriate line is the version that fails an inspection.

Mainland, Zanzibar and the Union line

Social security is not a Union matter. An employer registering with the Business and Property Registration Agency contributes for island-based staff to the Zanzibar Social Security Fund under Zanzibar’s own legislation. Neither Mainland fund covers those posts; confirm the split with that fund directly.

The line follows where the employment sits, not where the head office is. A Mainland company running a Zanzibar branch with local staff carries two social-security registrations and two schedules. PAYE remains a Union tax collected by TRA in both places; ask ZRA which non-Union payroll charges attach to the island establishment before the first run.

The funds side by side

What leaves payroll each month

Section 12 of Cap. 50 places the duty to remit on the registered employer, at 20% of the employee’s wage. How that 20% is carried is a matter for the contract: the fund accepts 10% and 10%, or 15% and 5%, or the employer bearing the lot with nothing deducted from staff. PSSSF takes the same headline 20%, fixed at 15% from the employer and 5% from the member.

Section 14(1) adds a sum equal to five per cent of the amount outstanding for each month, or part of a month, that contributions run late. On an arrears file this accumulates faster than most boards expect. The fund has opened penalty-waiver windows before; apply into one rather than budgeting on the assumption that relief will arrive unasked.

Three further lines leave the same payroll. PAYE under the Income Tax Act Cap. 332 reaches TRA within seven days of month end. The Skills and Development Levy, charged under the Vocational Education and Training Act Cap. 82 at 3.5% of gross emoluments on employers with ten or more employees, rides on that same monthly return. Workers Compensation Fund contributions under Cap. 263 run at 0.5% of the gross wage bill and are employer-borne. Confirm the live schedule on tra.go.tz before a payroll template is frozen.

Registering the employer and the member

1. Settle the entity’s character first. Read the instrument that created it and the terms on which it appoints staff. Nothing after this step is cheap to unwind.
2. Ask both funds whether a registration already stands in the employer name. Predecessor records surface at the worst moment.
3. Register the employer with the correct fund and take the employer number in writing.
4. Register each employee individually. The number attaches to the person, not the job, for a working life.
5. Check every joiner for an existing number before requesting a new one: an old card or payslip carries it.
6. Open the WCF and TRA payroll lines that same week, so month one closes on one consistent set of schedules.
7. Run the first return on the fund’s portal, reconciled line by line against the same month’s PAYE schedule.
8. Draw the compliance certificate once contributions are current, and diarise its expiry; tender desks ask for it.

The papers each desk asks for

Employer side: certificate of incorporation or the establishing instrument; the BRELA extract or its island equivalent; TIN certificate; business licence; the memorandum where a public institution’s status is disputed; a schedule of employees with wages; and a letter naming the payroll signatory.

Member side: the NIDA number, or passport with work and residence permits for a foreign hire; birth certificate; the contract of service; a signed beneficiary nomination; and bank details. PSSSF additionally wants the appointment letter evidencing public-service terms. A member registered against an expired travel document is a claim that stalls two decades later.

Illustrative arithmetic on a twelve-person payroll

Illustrative arithmetic, not a quotation. A Dar es Salaam manufacturer employs twelve people. Gross monthly payroll is TZS 18,000,000.

NSSF at 20% comes to TZS 3,600,000. On a 10% and 10% basis the employer funds TZS 1,800,000 and deducts the same figure from staff. WCF at 0.5% is TZS 90,000. The Skills and Development Levy at 3.5%, the headcount being above ten, is TZS 630,000. Both of those are employer-borne.

Employer cash above gross payroll is therefore TZS 2,520,000 a month, 14% of the wage bill, before any PAYE is withheld on the employee side. Let the fund line slip three months and section 14(1) adds TZS 180,000 for each of them: TZS 4,140,000 is now owed in place of TZS 3,600,000. Every charge here is statutory and payable to a fund or to TRA; none is a professional fee.

When a member crosses the line

An employee moving from a ministry into a private company does not surrender the PSSSF record. Contributions already made stay credited; new ones run to NSSF from the first payroll of the new employment. The reverse works identically. Bringing two records together at claim time is business between the funds, not something the employer arranges.

The employer’s duty is narrow: register the joiner with its own fund, record the earlier membership number on the form, and stop guessing. Issuing a fresh number because a new hire could not recall the old one is the commonest avoidable defect in a Tanzanian member file. It splits one career into two short ones at the point where the qualifying period, 180 months of contributions, decides pension against lump sum.

Where this file stalls

• A state-owned company placed with PSSSF because the Government holds its shares, then reassigned on inspection with arrears owed elsewhere.
• Expatriates left off the schedule in the belief that a work permit substitutes for membership.
• Island-based staff carried on a Mainland schedule for years, with no island registration behind them.
• A duplicate number issued to a joiner whose dormant record sits under a maiden name or an old spelling.
• Contribution schedules that will not reconcile to the same month’s PAYE return, so neither desk accepts the other’s figure.
• Arrears found at a tender, when the compliance certificate is refused and the bid dies on a technicality nobody costed.

What has moved since the merger

The structural change is settled: four legacy public funds closed into PSSSF on 1 August 2018, and members in private employment were carried across. What has shifted since is the cost of employment around them, not the membership rule.

The Workers Compensation Fund contribution for private employers was reduced to 0.5%. The Skills and Development Levy came down to 3.5% in the Finance Act 2023. The PSSSF benefit formula was revised after objections to its first version, so a member near retirement should request a written projection rather than apply a formula found in a forum. Headline rates at both funds have held at 20% throughout: a position to verify yearly, not a fixture.

Mandate-holders this file does not replace

Each fund owns its own register and neither gives the other’s answer. The Social Security Regulatory Authority sets scheme and benefit standards; confirm its current mandate before relying on an old circular. WCF owns employment-injury cover and takes no pension receipt in its place. TRA owns PAYE and the levy. The Labour Commissioner owns work permits and employment standards under the Employment and Labour Relations Act Cap. 366. OSHA owns premises registration where the workplace qualifies. Health insurance is a separate obligation, discharged by neither fund.

Zatra prepares, structures and coordinates the registrations and the monthly file. It does not practise law, audit, or issue a membership determination: that decision is the fund’s, issued in writing, and no outcome is promised.

What to confirm before you act

• The instrument that created your entity, and the appointment terms it prescribes for staff.
• Any dormant record held at either Mainland fund under your employer name.
• Each joiner’s earlier membership number, before any new one is requested.
• Whether a post offered to a non-citizen sits inside GN No. 487A of 2025.
• Whether island-based staff belong on a Mainland schedule at all.
• The contribution split you are applying, confirmed with the fund rather than inherited from a predecessor.
• The compliance certificate on file and the date it expires.