Employment in Uganda is governed mainly by the Employment Act, 2006, alongside the National Social Security Fund Act, the Income Tax Act and the Workers Compensation Act. Here is what employers need to know about leave, pay, tax, payroll contributions and ending employment.
The Employment Act sets minimum paid leave. Annual leave and sick pay apply to employees who normally work at least 16 hours a week, and annual leave starts once the employee has 6 months of continuous service.
7 days on full pay for each 4 months of continuous service, taken at an agreed time in the calendar year. It cannot be given up in exchange for money.
After 1 month of service, an employee who is sick or injured receives full wages and benefits for the first month of absence. If the sickness continues past the second month, the employer may end the contract.
On full wages, paid by the employer. At least 4 weeks must follow the birth or miscarriage.
On full wages, taken immediately after the birth or miscarriage.
Employees returning from maternity or paternity leave have the right to their previous job, or for maternity leave a suitable alternative on no less favourable terms. If illness linked to the pregnancy or birth makes an earlier return inadvisable, the right to return remains available for 8 weeks after the birth. An employer may ask for a medical certificate and for written notice of the date of return.
Set up each Ugandan leave type in IceHrm with its own accrual, carry forward and approval rules, such as 7 days of annual leave for every 4 months worked. Employees see their live balance before they apply, and managers see who is away on a shared calendar. Leave management →
Uganda has no effective general minimum wage: the last general statutory minimum dates from 1984 and is far below market pay. Wages are set by contract and, in some sectors, by collective agreement.
Longer normal hours can be agreed, but total hours may not exceed 10 a day or 56 a week, except averaged over 3 weeks for shift work.
For hours beyond 8 a day or 48 a week, unless a written agreement provides otherwise.
Double the normal hourly rate for overtime worked on a gazetted public holiday.
Capture attendance and overtime in IceHrm and feed the hours straight into payroll, so overtime and public holiday rates reflect what was actually worked. Time & attendance →
Employers deduct PAYE from employees’ pay each month and pay it to the Uganda Revenue Authority (URA). The tax year runs from 1 July to 30 June. Residents are taxed on worldwide income; non-residents are taxed on Ugandan-source income with no tax-free band.
| Annual chargeable income | Rate | Tax on this income |
|---|---|---|
| UGX 0 – UGX 2,820,000 | 0% | Nil |
| UGX 2,820,001 – UGX 4,020,000 | 10% | 10% of the amount over UGX 2,820,000 |
| UGX 4,020,001 – UGX 4,920,000 | 20% | UGX 120,000 plus 20% over UGX 4,020,000 |
| UGX 4,920,001 – UGX 120,000,000 | 30% | UGX 300,000 plus 30% over UGX 4,920,000 |
| Over UGX 120,000,000 | 40% | UGX 34,824,000 plus 40% over UGX 120,000,000 |
Employees also pay Local Service Tax to the local council where they live, from UGX 5,000 to UGX 100,000 a year depending on income. The employer deducts it from pay over four months, finishing no later than 15 November.
The main statutory payroll cost for employers is the National Social Security Fund (NSSF). The employer deducts the employee’s share and pays both shares to the NSSF each month.
Of each employee’s gross pay.
Of gross pay, deducted by the employer. Voluntary contributions above the standard rates are allowed.
Employers are liable for work injuries under the Workers Compensation Act, and many insure this risk. Premiums depend on the insurer and the work.
Build Ugandan pay the way you already structure it, with your own salary components, deductions and formula columns, such as NSSF and Local Service Tax columns. Want to know how well IceHrm handles payroll calculations for Uganda? Contact us or see Payroll →
Before dismissing an employee for misconduct or poor performance, the employer must explain the reason in a language the employee understands, allow them to bring a person of their choice, and hear their response. In any claim, the employer must prove the reason for dismissal, or it is treated as unfair.
| Continuous service | Notice |
|---|---|
| During probation | 14 days |
| More than 6 months, less than 1 year | 2 weeks |
| 1 year, less than 5 years | 1 month |
| 5 years, less than 10 years | 2 months |
| 10 years or more | 3 months |
After 6 months of continuous service, severance allowance is due when an employee is unfairly dismissed, dies in service, resigns because of physical incapacity, or when the contract ends because of the employer’s death or insolvency or the employer’s failure to pay wages. The Act leaves the amount to be negotiated between the employer and the employees or their union, so check any collective agreement. No severance is due on justified summary dismissal, at the end of probation, or when the employee unreasonably refuses equivalent re-employment.
Final pay includes any accrued annual leave. Outstanding annual leave cannot be counted as part of the notice period.
Uganda’s public holidays combine national, Christian and Muslim observances. Islamic holiday dates follow the lunar calendar and are confirmed by the government close to the day.
The government occasionally declares additional one-off public holidays, for example for national events.
Leave groups give each office its own holiday calendar, so you can add the Eid dates and any one-off holidays as soon as they are announced. Holiday calendars →
Employers must give each employee written particulars of employment no later than 12 weeks after they start, confirm any agreed changes in writing, and keep a copy to show a labour officer on request.
A probationary period can last up to 6 months and may be extended by up to 6 more months with the employee’s agreement. An employee can only be placed on probation once with the same employer. Either side can end a probationary contract with 14 days’ notice, or the employer can pay 7 days’ wages instead.
Send contracts and written particulars for e-signing, keep them on the employee’s record ready for a labour inspection, and track onboarding with task lists so nothing is missed on day one. Documents & e-signing →
This guide is general information to help you plan HR processes, not legal, tax or financial advice. Employment law and rates change regularly and awards, enterprise agreements and state rules may give employees more than the minimums shown here. Always confirm current requirements with the official sources or a qualified adviser.
Configure leave types, accrual rules and public holidays for Uganda, keep employee records and contracts in one place, and run payroll with your own salary components. Want to know how IceHrm handles payroll calculations for Uganda? Talk to us.
Start Free Trial Explore Features Contact Us