PAYE in Uganda: Tax Bands and What's Deducted From Your Salary

Uganda raised its PAYE tax-free amount on 1 July 2026, so many lower earners now pay nothing. If you earn UGX 335,000 a month or less, you pay no PAYE at all, up from a UGX 235,000 limit before.

Above that, tax rises in steps from 20% to 30%, with an extra 10% only on very high salaries. Below are the bands, how URA works out your tax and what NSSF changes, confirmed straight from URA's own site in November 2026.

Uganda's PAYE tax bands from 1 July 2026

These are the monthly bands for resident individuals in formal employment, taken directly from URA's own PAYE rates page, matching the annual bands in the Income Tax (Amendment) Act 2026 (EY tax alert, Uganda Tax Amendment Acts 2026; confirmed by MRT Tax Advocates' summary of the 2026 amendments):

Before 1 July 2026, the tax-free band stopped at UGX 235,000 a month and the next band was taxed at 10%. That lower band is gone: the change merges it into one bigger tax-free amount and goes straight to 20%. URA has confirmed the new table applies from the July 2026 payroll.

The annual version of the same bands, the one written into the law, is: nil up to UGX 4,020,000; 20% up to UGX 4,920,000; UGX 180,000 plus 25% up to UGX 5,820,000; UGX 405,000 plus 30% up to UGX 120,000,000; and above UGX 120,000,000, that same 30% plus a further 10% surcharge on the excess.

Two unrelated 2026 tax bills caused confusion for payroll teams this year. President Museveni sent the Income Tax (Amendment) Bill and the Excise Duty (Amendment) Bill back to Parliament in July over a betting-winnings withholding clause and a rise in plastics excise, not the PAYE bands. Parliament fixed those clauses and he signed both in August 2026. The table above hasn't moved: URA's PAYE rates page shows exactly the same figures, checked again in November 2026.

How to work out your own PAYE

1. Start with your gross pay: basic salary plus taxable allowances and benefits. Housing, transport and similar cash allowances are usually taxable. Only a short list of exemptions, like some medical and pension benefits, are left out.
2. Find your band in the table above.
3. Take the fixed amount for that band, then add the percentage on the part of your pay inside the band, not your whole salary.
4. That's your PAYE. Your employer deducts it and NSSF separately, then pays you the rest.

One thing catches people out: in Uganda, you can't deduct your NSSF contribution before working out PAYE. URA taxes your full gross pay, and NSSF comes off separately, unlike some other East African countries where pension contributions lower your taxable income. PwC's Uganda tax summary, which lists the deductions allowed against employment income, doesn't include NSSF, and payroll providers using the 2026 bands confirm PAYE is worked out on full gross pay. Zambia works the same way: ZRA's PAYE bands apply to gross pay, and NAPSA comes off separately.

Worked examples in UGX

Say you're a receptionist in Mbale on UGX 300,000 a month. You're under the UGX 335,000 threshold, so you pay zero PAYE. Your NSSF (if your employer is enrolled) is 5% of UGX 300,000 = UGX 15,000, and that's the only deduction from your pay.

Say you're a sales assistant in Jinja on UGX 450,000 a month. You fall in the 25% band:

• PAYE = UGX 15,000 + 25% × (450,000 − 410,000) = UGX 15,000 + UGX 10,000 = UGX 25,000
• NSSF employee share = 5% × 450,000 = UGX 22,500
• Take-home = 450,000 − 25,000 − 22,500 = UGX 402,500

Say you're an office administrator in Kampala on UGX 2,000,000 a month. You're in the 30% band:

• PAYE = UGX 33,750 + 30% × (2,000,000 − 485,000) = UGX 33,750 + UGX 454,500 = UGX 488,250
• NSSF employee share = 5% × 2,000,000 = UGX 100,000
• Take-home = 2,000,000 − 488,250 − 100,000 = UGX 1,411,750

If you earn more than UGX 10,000,000 a month, only the part above that carries the extra 10%. Your whole salary isn't suddenly taxed higher. Use our Uganda PAYE calculator rather than doing the sums by hand, especially if your pay includes irregular allowances or bonuses.

NSSF: what comes off on top of PAYE

Every employer in Uganda, however many staff it has, must register employees aged 16 to 55 with the National Social Security Fund, unless the employee is on the government pension scheme (NSSF Uganda, membership and contributions). The split is:

• Employee: 5% of gross monthly pay, deducted by the employer.
• Employer: 10% of gross monthly pay, paid on top. It doesn't come out of your salary.
• Total remitted to NSSF: 15% of gross pay.

Contributions are due to NSSF by the 15th of the next month. As the examples above show, NSSF and PAYE are two separate deductions, each worked out from your gross pay. You don't subtract one before working out the other.

Payslip problems to look out for

• Don't confuse "gross pay" with "basic salary." If your contract lists a basic salary plus separate allowances, URA generally treats most cash allowances as part of chargeable pay for PAYE purposes. Ask your HR or payroll office which allowances, if any, your employer treats as exempt, rather than assuming your basic salary alone is taxed.
• A bonus or arrears payment can push a single month into a higher band, even if your normal monthly pay sits lower. That's correct under the law, PAYE is worked out per pay period, but it means your December bonus month can look like a much bigger tax bite than your January pay. The surcharge above UGX 10,000,000 only ever applies to the amount over that line, not the whole bonus.
• Employers who don't register for PAYE or NSSF, or who deduct from staff but don't pay it over, are the ones who get into trouble with URA and NSSF, not the employee. If you're not sure your deductions are being paid, ask for your NSSF statement. It should show matching payments from your employer.
• If you're newly employed or self-employed, you need a Tax Identification Number before your employer can run PAYE properly on your pay, or before you can file your own returns. See our guide on registering for a URA TIN online. If you're the one about to run payroll (hiring your first baker or shop assistant, say), our guide to what it costs to start a small bakery in Uganda covers the same PAYE and NSSF duties from the employer's side.

With more of your pay now tax-free, decide in advance what to do with the extra rather than letting it disappear into daily spending. You could top up your savings or look at investment options for small investors in Uganda. And if a chunk of your take-home goes on mobile money fees, check what you pay on MTN MoMo and Airtel Money transactions in Uganda. Small fees add up over a month, just like tax bands do.

For more on personal finance in Uganda and other Uganda money guides, see our full library.

Frequently asked questions

How much is PAYE in Uganda?

It depends on your monthly pay. Nothing on the first UGX 335,000. Above that: 20% on the next UGX 75,000, 25% on the next UGX 75,000, then 30% on everything up to UGX 10,000,000, and a further 10% only on pay above UGX 10,000,000. Use the band table above, or the calculator linked earlier, to get your exact figure.

What is the tax-free threshold in Uganda?

UGX 335,000 a month (UGX 4,020,000 a year), up from UGX 235,000 a month before 1 July 2026. If your gross monthly pay is at or below this, you pay no PAYE.

Does NSSF reduce how much PAYE I pay?

No. URA calculates your PAYE on your full gross pay before NSSF is deducted. Your 5% employee NSSF contribution comes off separately and doesn't lower your taxable income.

Who deducts PAYE and NSSF: me or my employer?

Your employer. They work out PAYE and your 5% NSSF share from your gross pay, add their own 10% NSSF contribution on top, and remit all of it to URA and NSSF on your behalf. You just see the net figure land in your account.

Do casual or part-time workers pay PAYE in Uganda?

Yes, if you're formally employed and paid above the threshold for that pay period. PAYE applies to each payment, not just to permanent staff. Someone paid UGX 400,000 for a short contract in a month falls into the same bands as a permanent employee earning that much.

Is there a new withholding tax on mobile money in Uganda?

Yes, but it's a different tax from PAYE. Since the 2026 tax changes, telecom companies withhold 10% from the commissions they pay mobile money agents and airtime dealers, as a final tax, so agents don't owe further income tax on that commission (PwC Uganda: Withholding taxes, reviewed 22 October 2026). It doesn't touch the fee you pay to send or withdraw money, and it doesn't change the PAYE table above.

Has the top PAYE rate changed in the reform?

The main top rate is still 30%, but the extra 10% on income above UGX 120,000,000 a year (UGX 10,000,000 a month) stayed in place through the 2026 changes. So very high earners still pay an effective 40% above that line.