Uganda Employer of Record & Payroll
What is the main language spoken in Uganda:
Uganda is a multilingual country with over ±70 languages spoken. The most spoken language in the capital city is Luganda, followed by English (also the official language since 1962). Most spoken after Luganda and English is Swahili.
The three major indigenous language families are Bantu, Central Sudanic, and Nilotic.
What type of employment contracts can you offer in Uganda:
- Fixed Term
- Indefinite term
- Be in writing
- Be in the official local language and the local currency
- Include salary/compensation, benefits and termination requirements
- Have specific working terms and conditions
- Can be eligible for organizational perks and/or other benefits
- Tend to be more focused [as only one employer] and familiar with the specific business – due to e.g. ongoing company training etc.
- Probationary period is 6 months [maximum] but it may be extended for a further period of not more than 6 months with the agreement of the employee.
WHAT INCOME IS TAXABLE IN Uganda:
Any individual who works and lives in Uganda for more the 183 days a year will be subject to local taxes in Uganda. They maintain a permanent home in Uganda. The tax years from effectively from 01 July to 30 June the following year. They may not be present for more than 122 days in the tax year and the two preceding tax years after that.
Any income earned in the form of cash, wages, salary, overtime, leave pay or payment in lieu of leave, commissions, gratuity, bonus or any amount that has benefited the employee.
What income is exempt from taxes in Uganda:
- Pensions
- Emoluments payable to employees of the East African Development Bank with effect from 01st July 1997
- Official employment income of persons employed by the Uganda Police Forces, Ugandan Army, Ugandan Prison / Correctional Services, or within a civil capacity.
Standard working hours: Number Overtime to be paid?
- Standard working hours: 8 hours per day and 48 hours per week.
- Overtime limit: Total working hours should not exceed 10 hours per day or 56 hours per week (except for shift workers).
- Rest day: Employees are entitled to 24 hours of uninterrupted rest each week, which can be taken on a customary rest day (Sunday) or a day agreed upon by both the employer and the employee.
- Overtime pay: If employees work more than 8 hours a day or 48 hours a week, they should receive a minimum of 1.5 times their regular hourly rate on weekdays.
- Public holidays: Employees should receive double their normal hourly rate for working on public holidays.
Mandatory contributions?
Employee
| Contribution Type | Contribution Rate |
|---|---|
|
Social security |
5% of gross earnings |
Employer
| Contribution Type | Contribution Rate |
|---|---|
|
Social security |
10% of gross earnings |
What is the Maternity and Paternity policy within Uganda:
- In most cases:
- Entitled in Uganda by law
- 12 weeks / 60 working days [minimum of 4 weeks to be post birth]
- 4 days paid leave per year for paternity leave
What type of leave is allowed in Uganda:
- 7 days, full pay for four months of continued service that can be used during the calendar year.
- 15 Public Holidays per annum as per government gazette.
- Must complete the first month of continuous service to be entitled. Sick pay will then be paid out for sickness or injury (must be proven by a qualified medical practitioner) for the first month at full pay. If during the second month of sickness the employee has not returned to work then the employer is entitled to terminate the contract of employment.
Do I need to pay a mandatory bonus annually OR is it discretionary in Uganda:
There is no statutory requirement to provide a bonus or 13th salary in Uganda.
In fact bonuses are not that common, but if paid, are generally relative to seniority and levels of performance.
What Gratuity / Severance payments do you need to provide for Uganda:
Severance Pay
- Unfair dismissal from work
- Termination due to physical incapacity that wasn’t caused by an employee’s misconduct
- Termination due to the death or insolvency of the employer
- Termination by a labor officer, due to the inability or refusal of the employer to pay any wages due
CAN YOU GIVE FRINGE BENEFITS IN Uganda:
Yes, you can but keep in mind that Fringe Benefits will be subject to employee PAYE tax. Only benefits that cannot be converted to cash will not be subject to tax. If the employer covers some of the employees expenses i.e. mobile phone then it must be subject to PAYE tax and either the employer will cover this portion for the employee or the employee will bear the PAYE tax.
Mandatory Probation period of Uganda:
Limited to six months, although it can be extended for another six months with an employee’s consent.
Is 13th month pay (Bonus) mandatory?
Not mandatory, applicable as per contract.
What are the Corporate and VAT / Sales tax rates in Uganda:
Corporate Tax Rates: 30% [in general]
VAT / Sales Tax Rates: 18% [on most goods and services]
Public Holidays in Uganda:
- January 1 - New Year's Day
- January 26 - NRM Liberation Day
- February 16 - Archbishop Janani Luwum Day
- March 08 - International Women's Day
- April 07 - Good Friday
- April 10 - Easter Monday
- April 21 - Eid-Ul-Fitr
- May 01 - Labor Day
- June 03 - Martyrs' Day
- June 09 - National Heroes' Day
- June 29 - Eid Al Adha
- October 09 - Independence Day
- December 25 - Christmas Day
- December 26 - Boxing Day
What Industries we support in Uganda:
- Non-Governmental Organization’s (NGO) / Non- profit
- Engineering & Construction
- Government / Development Agencies
- Oil & Gas
- FMCG & Manufacturing
- Private Equality, Finance, Insurance & Banking
- Mining
- Agriculture
The information provided above is for an “informative decision” and may change at any given time without prior notice. We always suggest speaking to one of our Sales Consultants before engaging in country.
