What PAYE is in Uganda
PAYE (Pay As You Earn) is the income tax an employer deducts from an employee's pay every month and sends to the Uganda Revenue Authority (URA). It is not a separate tax. It is the way the Income Tax Act collects tax on employment income, so you pay through the year instead of in one lump sum after it ends. Your employer works out the tax on what it pays you, withholds it, and files a monthly return with URA by the 15th of the following month.
A Uganda PAYE calculator does the same arithmetic a payroll system does: it adds up your taxable pay for the month, applies the monthly bands from the rate schedule, and subtracts the result. Most payslips also show two other deductions that are not income tax: the National Social Security Fund (NSSF) contribution and, for part of the year, Local Service Tax (LST). The calculator above handles all three so you can see the full path from gross pay to take-home pay.
The legal basis
- Income Tax Act: employment income is taxable under the Act, and the rates for individuals are set out in its rate schedule. Employers must withhold tax from employment income under the PAYE rules.
- Income Tax (Amendment) Act, 2026: part of the 2026/27 budget package. It raised the monthly tax-free threshold from UGX 235,000 to UGX 335,000 and replaced the 10% and 20% lower bands with 20% and 25% bands, effective 1 July 2026. EY's tax alert on the 2026 amendment Acts and RSM's Uganda Tax Guide 2026/27 both publish the same new schedule.
- National Social Security Fund Act: requires employers to remit 15% of an employee's gross monthly wages to NSSF, made up of 5% deducted from the employee and 10% paid by the employer.
- Local Governments Act: lets local governments, such as KCCA in Kampala, levy Local Service Tax on people in gainful employment, on a scale set by income.
Uganda PAYE rates for 2026/27 (residents)
From 1 July 2026, resident individuals pay PAYE on monthly employment income at these rates. The annual figures in brackets are what the law states; payroll uses the monthly equivalents.
| Monthly chargeable income (UGX) | PAYE |
|---|---|
| Up to 335,000 (4,020,000 a year) | Nil |
| 335,000 – 410,000 | 20% of the amount above 335,000 |
| 410,000 – 485,000 | 15,000 + 25% of the amount above 410,000 |
| 485,000 – 10,000,000 | 33,750 + 30% of the amount above 485,000 |
| Above 10,000,000 (120m a year) | 33,750 + 30% of the amount above 485,000, plus 10% of the amount above 10,000,000 |
Anyone on more than UGX 485,000 a month pays UGX 13,750 less PAYE each month than under the old bands. Workers between 235,000 and 335,000 now pay nothing.
Old resident bands (2025/26 and earlier)
These applied up to 30 June 2026 and are still on the URA PAYE rates page at the time of writing. Use the 2025/26 option in the calculator to check pay for June 2026 or earlier, or to see how much the change saves you.
| Monthly chargeable income (UGX) | PAYE |
|---|---|
| Up to 235,000 | Nil |
| 235,000 – 335,000 | 10% of the amount above 235,000 |
| 335,000 – 410,000 | 10,000 + 20% of the amount above 335,000 |
| 410,000 – 10,000,000 | 25,000 + 30% of the amount above 410,000 |
| Above 10,000,000 | As above, plus 10% of the amount above 10,000,000 |
Non-resident individuals
Non-residents get no tax-free band. The first shilling is taxed at 10%. The published sources for 2026/27 show this schedule unchanged:
| Monthly chargeable income (UGX) | PAYE |
|---|---|
| Up to 335,000 | 10% of the whole amount |
| 335,000 – 410,000 | 33,500 + 20% of the amount above 335,000 |
| 410,000 – 10,000,000 | 48,500 + 30% of the amount above 410,000 |
| Above 10,000,000 | As above, plus 10% of the amount above 10,000,000 |
You are generally resident for a year if you have a permanent home in Uganda, are present for 183 days or more in any 12-month period that starts or ends in the year, or average more than 122 days a year over the current and two previous years. Government of Uganda employees posted abroad are also resident.
NSSF and Local Service Tax
NSSF is a savings scheme, not a tax, but it comes off the same payslip. The employee pays 5% of gross monthly wages and the employer adds 10%, so 15% goes into your account each month. Both are due by the 15th of the following month. Your 5% does not reduce PAYE: in Uganda, PAYE is worked out on gross taxable pay, and NSSF is deducted alongside it. The employer's 10% is a cost to the employer and is not taxed as your income.
Local Service Tax is a small annual tax collected by your local government. Employers usually deduct it in four equal instalments over the first four months of the financial year (July to October). The amount depends on your monthly income:
| Monthly income (UGX) | LST per year (UGX) |
|---|---|
| 100,000 or less | Nil |
| 100,001 – 200,000 | 5,000 |
| 200,001 – 300,000 | 10,000 |
| 300,001 – 400,000 | 20,000 |
| 400,001 – 500,000 | 30,000 |
| 500,001 – 600,000 | 40,000 |
| 600,001 – 700,000 | 60,000 |
| 700,001 – 800,000 | 70,000 |
| 800,001 – 900,000 | 80,000 |
| 900,001 – 1,000,000 | 90,000 |
| Above 1,000,000 | 100,000 |
The scale above is from KCCA's Local Service Tax guidance. Other districts use the same statutory scale, but check with your local government if your payslip differs. In the calculator, choose "Deduct 1/4 instalment" for a payslip between July and October.
How the Uganda PAYE calculator works
- Add up taxable pay for the month: basic salary plus taxable allowances and benefits, such as housing, transport, lunch or a bonus paid that month. Leave out exempt items like medical reimbursements.
- Apply the bands for your residency and tax year. Each slice of income is taxed only at the rate for that slice.
- Add the 10% surcharge on any amount above UGX 10,000,000 a month.
- Work out NSSF at 5% of gross pay (and 10% for the employer).
- Subtract PAYE, NSSF and any LST instalment from gross pay, then add back exempt payments to get take-home pay.
Take-home pay = gross pay − PAYE − NSSF (5% of gross) − LST instalment + exempt payments
For a resident on more than UGX 485,000 a month in 2026/27: PAYE = 33,750 + 30% × (gross − 485,000), plus 10% of anything above 10,000,000.
Worked example: UGX 1,500,000 a month
Grace is a resident employee in Kampala. Her basic pay is UGX 1,200,000 and she gets a UGX 300,000 transport and housing allowance, so her gross taxable pay is UGX 1,500,000 a month. This is the calculator's default.
| First 335,000 at 0% | UGX 0 |
| Next 75,000 (335,000–410,000) at 20% | UGX 15,000 |
| Next 75,000 (410,000–485,000) at 25% | UGX 18,750 |
| Remaining 1,015,000 at 30% | UGX 304,500 |
| PAYE | UGX 338,250 |
| NSSF employee (5% × 1,500,000) | UGX 75,000 |
| Take-home pay (outside July–October) | UGX 1,086,750 |
| LST instalment in July–October (100,000 ÷ 4) | UGX 25,000, which leaves UGX 1,061,750 |
| Employer's NSSF (10%) | UGX 150,000 |
Under the 2025/26 bands Grace's PAYE would have been 25,000 + 30% × 1,090,000 = UGX 352,000, so the change saves her UGX 13,750 a month, or UGX 165,000 a year.
More examples to check your payslip
- UGX 400,000, resident, 2026/27: 20% × 65,000 = UGX 13,000 PAYE (it was UGX 23,000 under the old bands).
- UGX 3,568,000, resident: 33,750 + 30% × 3,083,000 = UGX 958,650, down from UGX 972,400. This matches the example published by payroll provider Workpay.
- UGX 12,000,000, resident: 33,750 + 30% × 11,515,000 = 3,488,250, plus 10% × 2,000,000 = 200,000, for UGX 3,688,250.
- UGX 1,500,000, non-resident: 48,500 + 30% × 1,090,000 = UGX 375,500.
Common mistakes and edge cases
- Deducting NSSF before PAYE. Several online tools do this, which understates tax. In Uganda the employee's 5% NSSF does not reduce taxable pay.
- Using the old bands after July 2026. Payroll software that was not updated keeps the 235,000 threshold. If your July 2026 or later payslip shows PAYE on pay below UGX 335,000, or 30% starting at 410,000, ask payroll to check.
- Forgetting benefits in kind. A company car, free housing, employer-paid utilities or a cheap loan above UGX 1 million are taxable. Add their monthly value to "taxable allowances".
- Treating all allowances as exempt. Housing, transport and lunch allowances paid in cash are normally taxable. Exempt items include medical costs paid or reimbursed by the employer, genuine travel reimbursements, meals in a staff canteen open to all staff, and benefits worth under UGX 10,000 a month.
- Bonuses and arrears. A bonus is taxed in the month it is paid, so it can push that month's PAYE into a higher band. Enter it in the allowances box for that month.
- Second employers. If you have two jobs, each employer applies the bands separately, so the tax-free band may be used twice. You may owe the difference when you file an annual return.
- Gratuity. For employees with at least 10 years' service, 25% of gratuity is exempt and the rest is taxable.
Who this calculator is for, and who it is not for
It suits employees of private companies, NGOs and government bodies who are paid monthly in Uganda, and employers who want a quick check before running payroll. It is less suitable for:
- Self-employed people and business owners, who pay income tax through provisional and annual returns rather than PAYE.
- Members of the armed forces, police and prisons services, whose employment income has its own rules and who are exempt from LST.
- Diplomats and staff of some international organisations, who may be exempt under treaties or host-country agreements.
- Casual and daily workers, whose pay periods are not monthly.
Checking your payslip
Put your gross pay and allowances into the calculator for the month on your payslip, pick the right tax year and residency, and compare PAYE, NSSF and LST line by line. Differences of a few shillings come from rounding. Bigger gaps usually mean a benefit you forgot, an exempt allowance treated as taxable, or old bands still in the payroll system. You can see your NSSF statement on the NSSF app or self-service portal, and the PAYE your employer has filed for you in your URA account.
Frequently asked questions
What are the new PAYE rates in Uganda for 2026/27?
For residents, from 1 July 2026: nil up to UGX 335,000 a month, 20% from 335,000 to 410,000, 25% from 410,000 to 485,000, and 30% above 485,000, with an extra 10% on income above UGX 10 million a month.
How much salary is tax-free in Uganda?
A resident employee pays no PAYE on monthly pay up to UGX 335,000 from July 2026 (UGX 4,020,000 a year). Before that the threshold was UGX 235,000. Non-residents have no tax-free band.
How do I calculate PAYE in Uganda?
Add up your taxable monthly pay, then apply each band in turn. For a resident earning more than UGX 485,000 in 2026/27, PAYE is 33,750 plus 30% of the amount above 485,000. A PAYE calculator for Uganda like the one on this page does this automatically and shows each band.
Is NSSF deducted before PAYE in Uganda?
No. PAYE is calculated on gross taxable pay. Your 5% NSSF contribution is deducted separately and does not lower your tax.
What percentage is NSSF in Uganda?
15% of gross monthly wages: 5% from the employee and 10% from the employer, paid by the 15th of the following month.
How much is Local Service Tax in Uganda?
Between UGX 5,000 and UGX 100,000 a year depending on monthly income. Anyone earning more than UGX 1,000,000 a month pays the maximum of UGX 100,000, usually in four instalments from July to October.
What PAYE rate do non-residents pay in Uganda?
10% on the first UGX 335,000 a month, 20% from 335,000 to 410,000, and 30% above 410,000, plus 10% on income above UGX 10 million. There is no tax-free band.
How much tax do I pay on UGX 1,000,000 a month in Uganda?
A resident pays 33,750 + 30% × 515,000 = UGX 188,250 PAYE in 2026/27, plus UGX 50,000 NSSF. Take-home pay is UGX 761,750 before any LST instalment (LST is UGX 90,000 a year at this level).
Is this PAYE calculator official?
No. It is a free estimate based on published rates. Your employer and the Uganda Revenue Authority determine the final tax.