PAYE in Uganda 2026: Tax Bands and What's Deducted From Your Salary

Uganda raised the PAYE tax-free threshold from UGX 235,000 to UGX 335,000 a month on 1 July 2026, and restructured the bands above it. If you earn UGX 335,000 or less a month you now pay no PAYE at all. Above that, you pay 20% on the next slice, 25% on the slice after that, then 30% on everything up to UGX 10,000,000 a month, with an extra 10% surcharge only on pay above that. This piece walks through the exact bands, how URA calculates your tax, and what NSSF does (and doesn't) change about your bill, checked against the Uganda Revenue Authority's rules and a professional tax alert in October 2026.

Uganda's PAYE tax bands from 1 July 2026

These are the monthly bands for resident individuals in formal employment, worked out from 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 second band was taxed at 10%. That lower band is gone — the amendment folds it into one bigger tax-free threshold and moves straight to 20%. URA itself has confirmed the new table takes effect 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.

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 specific exemptions, like certain medical and pension benefits, are excluded).
2. Find your band in the table above.
3. Apply the fixed amount for that band, then add the percentage on the portion of your pay that falls 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: Uganda doesn't let you deduct your NSSF contribution before calculating PAYE. URA taxes your full gross pay first, and NSSF comes off separately afterwards — unlike some other East African systems where pension contributions reduce your taxable income. PwC's Uganda tax summary, which lists the deductions available against employment income, doesn't include NSSF as one of them, and payroll providers working through the 2026 bands confirm PAYE runs on the full gross figure. 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 above UGX 10,000,000 a month, only the slice above that threshold carries the extra 10% — it isn't your whole salary suddenly taxed higher. Run your own figure through our Uganda PAYE calculator rather than doing the arithmetic by hand, especially if your pay includes irregular allowances or bonuses in a given month.

NSSF: what comes off on top of PAYE

Every employer in Uganda, regardless of how many staff they have, must enrol employees aged 16 to 55 in the National Social Security Fund — unless the employee is on the government pension scheme instead (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 following month. As the examples above show, NSSF and PAYE are two separate deductions calculated independently from your gross pay — you don't subtract one before working out the other.

What to watch 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 remit it, are the ones who get into real trouble with URA and NSSF — not the employee. If you're unsure your deductions are actually being paid over, ask for your NSSF statement; it should show matching entries from your employer.
• If you're newly employed or self-employed, you'll need a Tax Identification Number before your employer can run proper PAYE 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 rather than receive it — hiring your first baker or shop assistant, say — our guide to what it actually costs to start a small bakery in Uganda covers these same PAYE and NSSF duties from the employer's side.

With more of your gross pay now tax-free, it's worth deciding in advance what you'll do with the difference rather than letting it disappear into daily spending — whether that's topping up savings or looking at investment options available to small investors in Uganda. And if a chunk of your take-home still goes out the door in mobile money fees, check what you're actually paying on MTN MoMo and Airtel Money transactions in Uganda — small percentage fees add up over a month the same way 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 in 2026?

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 for 2026?

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 per payment, not just to permanent staff. Someone paid UGX 400,000 for a short contract in a given month falls into the same bands as a permanent employee earning that much.

Has the top PAYE rate changed in the 2026 reform?

The core top rate is still 30%, but the extra 10% surcharge that used to apply 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 face an effective 40% on income above that line.