Uganda PAYE Calculator 2025/26

Uganda's Pay As You Earn (PAYE) system is administered by the Uganda Revenue Authority (URA) under the Income Tax Act (Cap. 340 as amended). All employers must register with URA, deduct PAYE monthly from employee salaries, and remit it to URA by the 15th of the following month. Penalties apply for late filing and payment. Uganda's tax year runs from 1 July to 30 June, matching the Government fiscal year. Employees who receive income from a single employer below the annual threshold have their PAYE handled entirely at source.

Uganda uses a five-band progressive monthly tax structure for resident individuals. The first UGX 235,000 per month is completely tax-free. Income from UGX 235,001 to UGX 335,000 is taxed at 10%; UGX 335,001 to UGX 410,000 at 20%; UGX 410,001 to UGX 10,000,000 at 30%; and amounts exceeding UGX 10,000,000 per month are taxed at 40%. Non-resident individuals pay a flat rate of 30% on all Uganda-source employment income, with no tax-free band. The annual tax-free threshold for residents is UGX 2,820,000.

A notable feature of Uganda's payroll is that the National Social Security Fund (NSSF) employee contribution (5% of gross salary) is NOT deductible from taxable income. This differs from neighbouring Kenya, Tanzania, and Rwanda where social security contributions reduce the PAYE taxable base. In Uganda, PAYE is calculated on the full gross salary before NSSF deduction. The employer contributes an additional 10% of gross salary to NSSF — an employer cost separate from employee deductions. Local Service Tax (LST) is a separate annual levy based on monthly take-home salary after PAYE, with employee bands ranging from UGX 5,000 to UGX 100,000 per year and usually collected in four equal instalments in the first four months of the financial year.

Uganda's economy is one of East Africa's most diversified, with agriculture, services, and growing manufacturing sectors. The country has a population of approximately 47 million people and a GDP of around $47 billion. Mobile money via MTN MoMo is deeply embedded in Ugandan commerce and is widely used for payroll disbursement, especially in the informal sector. Uganda's VAT rate is 18%, with registration required for businesses exceeding UGX 150 million annual turnover.