Employer of Record in Uganda

Businesses can only operate smoothly in Uganda if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Uganda below, to avoid any compliance issues.

Employment Contract Requirements

Uganda's 1995 Constitution and the 2006 Employment Act define employee protections and workers' rights, ensuring equal pay for equal work and prohibiting discrimination based on age, religion, gender expression, and race. Common hiring process inquiries may include minimum wage, overtime rates, and guaranteed paid leave.

Onboarding Process

We can help you get a new employee started in Uganda quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Uganda

According to Ugandan labour laws, the standard working hours are eight hours per day and a total of 48 hours per week.

Overtime in Uganda

Employers can ask employees to work overtime, but the combined work hours, including overtime, should not surpass 10 hours per day or 56 hours per week, with exceptions for shift workers. Overtime is compensated at 150% of the regular rate on regular weekdays and at 200% of the regular rate on public holidays.

Probation Period in Uganda

Probation periods are not mandatory but serve as an opportunity for employers to assess a new employee's performance and suitability for the position. The probation period can last up to six months, providing sufficient time for both parties to evaluate the employment relationship.

Fiscal Year in Uganda

1 July - 30 June is the 12-month accounting period that businesses in Uganda use for financial and tax reporting purposes.

Payroll Cycle in Uganda

The payroll cycle in Uganda is usually monthly, with employees being paid at the end of the month.

Minimum Wage in Uganda

The minimum wage for employees in Uganda is typically 850 UGX per hour, amounting to ~136,000 UGX per month for a typical 48 hour work week.

Bonus Payments in Uganda

In Uganda, there is no mandatory requirement for employers to provide bonuses or 13th month salaries. In fact, bonuses are not widely offered in Ugandan workplaces.

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 10% on top of the employee salary in Uganda.

Employee Payroll Tax Contributions

In Uganda , the typical estimation for employee payroll contributions cost is around 5%.

Individual Income Tax Contributions

In Uganda, the individual income tax ranges from 0% to 30%. Income tax is calculated according to progressive rates.

Pension in Uganda

The National Social Security Fund (NSSF) is Uganda's main source of public pensions, funded through contributions from both employers and employees. Employers are mandated to contribute 10% of their employees' salaries, while employees themselves contribute 5% of their earnings.

In Uganda, employers hiring international workers must navigate the application process for various work permits like Class D for professionals or Class G for investors. Processing times typically range from 4 to 6 weeks, and employers must provide comprehensive documentation to ensure compliance with immigration regulations.

Mandatory Leave Entitlement in Uganda

The annual leave entitlement in Uganda is 21 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Uganda

Public holidays in Uganda may vary each year, but some of the major and recurring public holidays typically observed in the country include:

Paid Time Off in Uganda

Employees become eligible for annual leave after six months of employment, and those working at least 16 hours a week are entitled to 21 working days of paid leave. This entitlement accrues at a rate of seven days for every continuous four-month period of service, once they complete 12 months of continuous employment.

Maternity Leave In Uganda

Female employees are granted 60 working days (equal to eight and a half weeks) of fully paid maternity leave, with the first four weeks being compulsory following childbirth or miscarriage.

Paternity Leave In Uganda

Male employees are entitled to four fully paid working days of paternity leave in a year following the birth of their child or the miscarriage of their spouse, covered by the employer.

Sick Leave In Uganda

An employee working a minimum of 16 hours per week becomes eligible for sick leave after one month of service. During the first month of illness or injury, they are entitled to receive full pay for their sick leave.

Parental Leave In Uganda

Uganda's labor laws do not provide a shared parental leave policy.

Termination Process in Uganda

Terminations in Uganda are not straightforward. Unlike in some countries, employers in Uganda are not permitted to terminate employment at will. Instead, terminations must be justified by valid grounds.

• Voluntarily by the employee
• By mutual agreement
• By the expiration of the contract
• Unilaterally by the employer based on:
• Probation period
• Objective grounds
• Disciplinary dismissal
• Performance due to unsuitability for the job

Notice Period in Uganda

In Uganda, the minimum notice period for termination is 2 weeks, and it will increase according to the length of employment as follows:

• 2 weeks notice for service of more than 6 months but less than 1 year.
• 1 month notice for service of more than 12 months but less than 5 years.
• 2 months notice for service of more than 5 years but less than 10 years.
• 3 months notice for service of 10 years or more.

Severance in Uganda

Ugandan employment law outlines a broad spectrum of circumstances under which an employee is eligible for severance pay, including:

• Unfair dismissal from work
• Termination due to physical incapacity that wasnt caused by an employees misconduct
• Termination due to the death or insolvency of the employer
• Termination by a labour officer, due to the inability or refusal of the employer to pay any wages due