Hiring Talent And Managing Payroll In Uganda

Hiring in Uganda? Read on to find out the employment norms (like taxes, payroll and benefits) and EOR (Employer on Record) norms in Uganda.

Employment Norms in Uganda

Uganda is a country in East Africa with a flourishing free market economy. Its economic freedom score of 54.2 makes it an ideal destination for business expansion in Africa. Although agriculture is its main source of GDP, you can expect economic blooms through investment in business sectors. Its low market competition supports financial success. But, beware of its employment norms as their violation can cause legal implications.

General Information:

The Uganda currency is the Ugandan shilling (UGX).
Kampala is the capital of Uganda
English and Swahili are spoken in Uganda. However, its official language is English.Documentation can be done in English and Swahili.
According to World Bank, the GDP of Uganda is USD 40.53 billion in 2021.

The Employment Act of 2006 guides employment norms in Uganda. It sets employment standards and provides labor laws applicable to all employees.

Table of Contents

Select Section

Agreements
Onboarding Process
Visa
Minimum Wage
Payroll Cycle
Annual Bonus
Health Benefits
Working Hours and Overtime
Leaves
Social Security
Taxes for Employers
Taxes for Employees
Probation
Termination
Severance Pay
Employees or Contractors
Final Words

Agreements Onboarding Process Visa Minimum Wage Payroll Cycle Annual Bonus Health Benefits Working Hours and Overtime Leaves Social Security Taxes for Employers Taxes for Employees Probation Termination Severance Pay Employees or Contractors Final Words

Agreements

In Uganda, Contracts can be made either orally or in written form.
However, the employer must provide written contact before starting employment for it to be legally binding.
Contracts are binding upon both parties. Upon breach, they can be enforced through judicial bodies or Labour Office.
The terms and conditions of the agreement should comply with the Employment Act
In case of inconsistency with Ugandan labor law, the contract becomes null and void
The contract should specify employment duration, hours, and other terms and conditions.
There is no language specification in contract drafting. However, the most preferred language is English for documentation.
In Uganda, contracts are fixed-term, permanent, probationary, casual, and seasonal.

Onboarding Process

Unlike other countries, Uganda does not have specific laws regarding onboarding.
However, onboarding is advisable to make employees comfortable with the work environment.
During onboarding, employees may receive the necessary training required for the job.
Also, employees may be informed about workplace health and safety measures.
Certain companies in Uganda prefer Nondisclosure agreements and security and confidentiality agreements while onboarding new employees.
With legal assistance from EOR services, onboarding employees in Uganda can be more manageable.

Visa

Uganda has 3 types of Visas.

eVisa

Uganda provides 3 types of electronic visas.
It applies to traveling, business handling, study purpose, and transit pass.

Diplomatic and Official Visa

It is granted to diplomats, consular, and other officials who visit Uganda for official or business purposes.

Multiple-Entry Visa

It is designed for people who often require to visit Uganda.
This visa can be obtained for 6, 12, or 24 months.

Tarmack helps you easily hire international talent as your full time employees without opening international subsidiaries. Find out more about our Employer of Record services

Learn More

Minimum Wage

Uganda has The standard minimum wage in Uganda is 6,000 Ugandan shillings per month.

Payroll Cycle

In Uganda, the standardized payroll cycle is monthly.

Annual Bonus

In Uganda, payment of 13th-month pay or bonus is customary.

Health Benefits

Occupational Health and Safety Act 2006 regulates health benefits and safety in Uganda.
A full-time employee of Uganda enjoys medical care and sickness benefits. However, health benefits vary depending on the employer and the type of work.
In Uganda, the Work compensation Act 2006 provisions compensation for industrial injuries
Similarly, Industrial death is compensated with 60 months' salary in Uganda.
For accidental disability, compensation depends on the degree of severity.

Working Hours and Overtime

Work hours:In Uganda, the standard working hours are 8 hours per day, making 40 hours a week. The workweek is from Monday to Friday.
Break:According to Section 53(6) of the Employment Act, employees working more than 8 hours, enjoy a 30-minute break.
Overtime:In Uganda, Overtime payment is mandatory. An employee can work overtime for a maximum of 56 hours per week. Overtime work is compensated at 150% of the hourly rate. However, overtime work during gazetted holidays is compensated at 200% of the hourly rate.

Leaves

Sick Leave

Employees can avail of 2 months of sick leave per year in Uganda.
The employer pays for the first month of leave, while the second month remains unpaid.

Parental leaves

Employees in Uganda can avail of maternity leave of 60 days. Out of which at least 28 days leave must be taken after child delivery. Employees receive 100% salary during maternity leave and this is paid by the employer.
4 days of paternity leave is granted to fathers after the child's birth. The employer pays 100% of the salary for this tenure.

Annual leaves

Employees get 21 days of paid annual leaves. Paid time off is given to employees who have completed four months at their work.

Public Holidays (for the Calendar year 2024)

Dates may change as per traditional calendars or official changes.

January 1 - New Year's Day
January 26 - NRM Liberation Day
February 16 - Archbishop Janani Luwum Day
March 8 - International Women's Day
March 29 - Good Friday
March 31 - Easter Sunday
April 1 - Easter Monday
April 10 - Eid al-Fitr
May 1 - Labor Day
June 3 - Martyr's Day
June 10 - National Heroes' Day
June 17 - Eid al-Adha
October 9 - Independence Day
December 25 - Christmas Day
December 26 - Boxing Day

Public Holidays (for the Calendar year 2025)

Dates may change as per traditional calendars or official changes.

January 1 - New Year's Day
January 26 - NRM Liberation Day
February 16 - Archbishop Janani Luwum Day
March 8 - International Women's Day
April 19 - Good Friday
April 21 - Easter Sunday
April 22 - Easter Monday
March 30 - Eid al-Fitr
May 1 - Labor Day
June 3 - Martyr's Day
June 10 - National Heroes' Day
June 7 - Eid al-Adha
October 9 - Independence Day
December 25 - Christmas Day
December 26 - Boxing Day

If you structure your global talent acquisition strategy well, you will definitely enhance your talent quality and availability through a distributed workforce. Tarmack offers end to end recruiting services to help you achieve this.

Schedule Consultation

Taxes for Employers

Uganda's employers must pay various taxes, including income tax, social security contributions, and payroll taxes. Generally, the employer's tax is about 10.30% of the employee's salary.

Employer payroll tax

National Social Security Fund- 10%
Workman's compensation insurance- 0.30%

Did you know that as a part of the Employer of Record service, Tarmack offers global payroll across 100+ countries? Not just that, we even offer this global payroll service on a standalone basis. So if you're looking for a payroll provider for one or more countries, you're at the right place.

Learn More

Taxes for Employees

Income tax in Uganda is charged progressively. The tax rate ranges from 0-30% in Uganda and it is different for residents and non-residents.

The progressive tax rate for Residents in Uganda is as follows.

UGX 0- 2,820,000: 0%
UGX 2,820,001 - 4,020,000: 10%
UGX 4,020,001 - 4,920,000: 20%
UGX 4,920,001 - 120,000,000: 30%
UGX 120,000,001 & above: 40%

The progressive tax rate for non-residents in Uganda is as follows.

UGX 0 - 4,020,000 - 10%
UGX 4,020,001 - 4,920,000 - 20%
UGX 4,920,001 - 120,000,000 - 30%
UGX above 120,000,001 - 40%

Employee Payroll Tax

National Social Security Fund- 5%

Probation

The probationary period for employees is 6 months.

Ready to convert your contractor to a full time employee?

Every now and then, that contractor you hired does such a good job that you want to hire them as a full time employee. Convert such contractors into your full time employees by using Tarmack's Employer of Record service. Doesn't matter where the contractor is. Our service covers 150+ countries around the globe!

Talk To Us

Termination

In Uganda, termination is guided by the terms and conditions of the contract.
A contract can be terminated voluntarily by the employee and upon mutual consent. It can also get terminated due to the expiry of the contract.
There is no provision for will-termination by the employer in Uganda.
The notice period of termination depends on the length of the contract.
6-12 months = 2 weeks
12 months- 5 years = 1 month
5-10 years = 2 months
Above 10 years = 3 months

Severance Pay

The contractual agreement in Uganda determines the severance pay.
However, severance pay is given to the employee who has continuously worked for at least 6 months.

Employees or Contractors

In Uganda, people can be hired as employees or contractors.
Employees and contractors enjoy different facilities and have separate legal provisions.
Misclassifying employees and contractors can lead to legal implications and penalties.
In Uganda, the misclassification of employees and contractors is investigated by Uganda Revenue Authority to ensure compliance with tax law.

Final Words

Employment Norms in Uganda are complex due to various legal procedures and implications. Besides, violating employment and labor norms can cause penalties under Employment Act. Thus, consulting a legal advisor or EOR services is ideal before starting a business in Uganda.