Dissertation (MA Business Administration)The aim of this study was to assess the challenges facing PAYE tax payers taking SUMATRA Dar Es Salaam as a case study. The specific objectives of this study were to assess the administration of PAYE tax, the extent of tax burden and measures to improve payment of PAYE tax. This study employed a triangulation of approaches such as case study and cross sectional design. A total of 48 respondents -workers were randomly sampled to get data on the problem. Data collection was done through interview where structured questionnaires were used. The pre testing was done before embarking on a comprehensive data collection. The results were analyzed through the use of SPSS -15 and then outputs have been presented in terms of frequency tables and figures or charts. The study found that administration of PAYE depended on the salary scale, tenure and position. The PAYE had significant burden among staff since it impeded their ability to deliver service morally, consume variety of food bundles and saving as well. This study has found that PAYE has an impact to employees if is not well planned and hence it is recommended that serious initiatives should be taken into account to reduce the rate and monitor moral hazard existing in tax management.