How deductions are made from a Ugandan salary
- PAYE: monthly bands on gross pay, with no deduction for NSSF.
- NSSF: 5% of gross from the employee and 10% from the employer.
- Local Service Tax (LST): a fixed yearly amount set by your monthly pay, collected in instalments in the first four months of the financial year (July to October). In those months it is subtracted from pay before PAYE.
So PAYE is slightly lower in the four LST months and higher for the rest of the year; the calculator adds up all twelve months.
URA PAYE rates for residents from July 2026
| Monthly pay | Rate on the band | Tax at top of band |
|---|---|---|
| Up to UGX 335,000 | 0% | UGX 0 |
| UGX 335,000 to UGX 410,000 | 20% | UGX 15,000 |
| UGX 410,000 to UGX 485,000 | 25% | UGX 33,750 |
| Over UGX 485,000 | 30% | n/a |
On top of these bands, every shilling of monthly pay above UGX 10,000,000 pays an extra 10%, so the marginal rate there is 40%. Before July 2026 the threshold was USh 235,000 and the bands were 10%, 20% and 30%.
Worked example: USh 1,000,000 a month
PAYE = UGX 33,750 + 30% × (UGX 1,000,000 − UGX 485,000) = UGX 188,250
| Item | Per year |
|---|---|
| Gross salary | UGX 12,000,000 |
| PAYE (8 normal months and 4 LST months) | −UGX 2,232,000 |
| NSSF (5%) | −UGX 600,000 |
| Local Service Tax | −UGX 90,000 |
| Net pay | UGX 9,078,000 |
Pay of exactly UGX 1,000,000 falls in the LST band ending at that figure, so the yearly LST is UGX 90,000, collected as UGX 22,500 a month for four months. Because it reduces PAYE in those months, LST costs less than its face value: without it net pay would be UGX 9,141,000, only UGX 63,000 more.
Local Service Tax bands
Set by the Local Governments Act, the yearly LST for employees depends on monthly gross pay. Nothing is due at USh 100,000 a month or less.
| Monthly gross pay | LST per year |
|---|---|
| UGX 100,000 to UGX 200,000 | UGX 5,000 |
| UGX 200,000 to UGX 300,000 | UGX 10,000 |
| UGX 300,000 to UGX 400,000 | UGX 20,000 |
| UGX 400,000 to UGX 500,000 | UGX 30,000 |
| UGX 500,000 to UGX 600,000 | UGX 40,000 |
| UGX 600,000 to UGX 700,000 | UGX 60,000 |
| UGX 700,000 to UGX 800,000 | UGX 70,000 |
| UGX 800,000 to UGX 900,000 | UGX 80,000 |
| UGX 900,000 to UGX 1,000,000 | UGX 90,000 |
| Over UGX 1,000,000 | UGX 100,000 |
Members of the army, police and prisons service are exempt. LST is paid to the local government where you work, such as Kampala Capital City Authority.
NSSF contributions in Uganda
The National Social Security Fund takes 15% of gross pay for each employee: 5% deducted from the worker and 10% paid by the employer. There is no ceiling. Unlike in Kenya or Tanzania, the employee's 5% is not deductible for PAYE, so tax is charged on the full gross.
At UGX 1,000,000 a month the employee share is UGX 50,000 and the employer adds UGX 100,000, which is credited to your NSSF account but never appears in net pay.
Uganda net pay at six salary levels
PAYE and NSSF are for a normal month; LST is the yearly amount; net pay is the yearly average per month.
| Gross per month | PAYE | NSSF | LST per year | Net per month | Total deductions |
|---|---|---|---|---|---|
| UGX 300,000 | UGX 0 | UGX 15,000 | UGX 10,000 | UGX 284,167 | 5.3% |
| UGX 500,000 | UGX 38,250 | UGX 25,000 | UGX 30,000 | UGX 435,000 | 13.0% |
| UGX 1,000,000 | UGX 188,250 | UGX 50,000 | UGX 90,000 | UGX 756,500 | 24.4% |
| UGX 2,000,000 | UGX 488,250 | UGX 100,000 | UGX 100,000 | UGX 1,405,917 | 29.7% |
| UGX 5,000,000 | UGX 1,388,250 | UGX 250,000 | UGX 100,000 | UGX 3,355,917 | 32.9% |
| UGX 15,000,000 | UGX 4,888,250 | UGX 750,000 | UGX 100,000 | UGX 9,356,750 | 37.6% |
At UGX 15,000,000 a month the extra 10% applies to UGX 5,000,000. For a reverse calculation from a target net, use the Net to Gross Calculator.
Taxable pay and exemptions
- Taxable: salary, wages, leave pay, overtime, bonuses, cash allowances and the value of benefits such as a car, housing or a low interest loan.
- Exempt: employer contributions to NSSF and reimbursed business costs.
- Different rules: non residents pay 10% from the first shilling, and a second job is taxed without the nil band.
Assumptions and sources for Uganda
- Resident employee, one employer, the same pay in every month of the 2026/27 financial year.
- LST collected in four equal instalments, each deducted before PAYE in that month.
- No benefits in kind or second employment.
Sources: Uganda Revenue Authority PAYE rates, the National Social Security Fund, and the KCCA guide to Local Service Tax under the Local Governments (Amendment) (No. 2) Act 2008. Rates for 2026/27.
Frequently Asked Questions
How much is USh 1,000,000 gross after tax in Uganda?
About UGX 756,500 a month on average over 2026/27, after PAYE, 5% NSSF and UGX 90,000 of Local Service Tax for the year.
What is the PAYE threshold in Uganda from July 2026?
UGX 335,000 a month for residents. Pay up to that amount is free of PAYE.
Is NSSF deducted before PAYE in Uganda?
No. PAYE is charged on gross pay; the 5% employee NSSF contribution is not deductible.
How much Local Service Tax will I pay?
Between UGX 5,000 and UGX 100,000 a year depending on monthly pay, spread over the first four months of the financial year.
What is the extra 10% on high salaries?
Residents earning more than UGX 10,000,000 a month pay an additional 10% on the part above that amount, on top of the 30% band.
Why is my PAYE lower from July to October?
LST is deducted in those months and reduces the pay on which PAYE is calculated.