There is a widely held view that off-farm income in developing countries tends to reduce poverty, leading to the conclusion that policies should focus on the further diversification of income options of rural households. However, much off-farm employment might be initiated rather as a survival strategy but as a sustainable way to reduce poverty in the long run. Using a rich data set from Tanzania, this study examines the potential income increases generated by off-farm income with a particular focus on off-farm income contributed by women. The findings indicate that women’s contributions to household income through off-farm activities are limited and smaller as compared to those of men. Investigating the possible reasons, fetching water and collecting firewood as well as the number of dependants limit women’s time that can be spent on off-farm activities.