Navigating Uganda’s payroll tax system in 2025 demands accuracy and timeliness. Employers must handle:
- Progressive PAYE
- Annual LST (4 installments)
- Monthly NSSF contributions
SunPro Systems streamlines compliance, reducing risk and administrative workload—allowing you to focus on your workforce, not paperwork.
1. Pay-As-You-Earn (PAYE)
PAYE is a monthly income tax deducted at source by employers and remitted to the Uganda Revenue Authority (URA).
Resident Employees (monthly taxable income):
- Up to UGX 235,000: 0%
- UGX 235,001–335,000: 10% on amount above 235,000
- UGX 335,001–410,000: UGX 10,000 + 20% on amount above 335,000
- UGX 410,001–10,000,000: UGX 25,000 + 30% on amount above 410,000
- Above UGX 10,000,000: 30% up to 10M + 10% on excess
Non-Residents: Pay 10% from day one, followed by similar band structure but no 235,000 threshold.
Due date: Employers must remit by the 15th of the following month, with penalties for late payment
2. Local Service Tax (LST) (KCCA).
LST is a local government tax deducted by employers, payable in four equal installments between July and October.
Annual Rates by Monthly Income:
- UGX ≤ 100,000: 0
- 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
Payment deadline: Second installment by 15th November; underpayment attracts 50% surcharge or penalties up to imprisonment.
LST is an allowable deduction when calculating PAYE.
3. National Social Security Fund (NSSF).
NSSF contributions secure retirement savings.
- Employee: 5% of gross monthly salary
- Employer: 10% of gross monthly salary
- Total: 15%, no upper salary limit
- Due date: Contributions remitted monthly by the 15th of the following month
- Optional excess contributions are allowed for volunteers or the self-employed