The tax-free monthly PAYE threshold rose from UGX 235,000 (unchanged since 2012) to UGX 335,000 under the Income Tax (Amendment) Act 2026, effective 1 July 2026. A new 25% band was also introduced for income between UGX 410,001 and 485,000. This calculator uses the current (post-1 July 2026) bands. Always confirm against URA guidance.
How PAYE is calculated in Uganda (2026)
Worked examples: gross to net (2026 bands)
| Gross / month | PAYE | NSSF (5%) | Net take-home |
|---|---|---|---|
| UGX 1,000,000 | UGX 180,750 | UGX 50,000 | ≈ UGX 769,000 |
| UGX 2,000,000 | UGX 480,750 | UGX 100,000 | ≈ UGX 1,419,000 |
| UGX 5,000,000 | UGX 1,380,750 | UGX 250,000 | ≈ UGX 3,369,000 |
These figures use the current URA bands (0% up to UGX 335,000; 10% to 410,000; 25% to 485,000; 30% above, plus 10% over UGX 10M) and the employee NSSF contribution of 5% of gross. The employer additionally pays 10% NSSF on top. This is a combined PAYE + NSSF calculation — the calculator above does it automatically for any salary, and the same combined logic applies whether you search for a PAYE calculator, an NSSF calculator, or a net pay calculator for Uganda.
PAYE (Pay As You Earn) is the income tax your employer deducts from your salary each month and remits to the Uganda Revenue Authority (URA) on your behalf. It is calculated on your gross monthly salary — your total pay before deductions — using progressive bands, meaning each portion of your income is taxed at a different rate rather than your whole salary being taxed at one rate.
Uganda PAYE tax bands (current)
From 1 July 2026, the monthly PAYE bands set by URA are: 0% on the first UGX 335,000; 10% on income between UGX 335,001 and 410,000; 25% between UGX 410,001 and 485,000; 30% between UGX 485,001 and 10,000,000; and an additional 10% surcharge on income above UGX 10,000,000, giving an effective top rate of 40%. The 25% band is new under the Income Tax (Amendment) Act 2026. Employees who work in more than one place are taxed at a flat 30% on the additional employment income.
NSSF contributions
On top of PAYE, the National Social Security Fund (NSSF) takes a total of 15% of gross pay — 5% deducted from the employee and 10% paid by the employer, with no salary ceiling. Late NSSF remittance attracts a penalty, and employees must be registered within 30 days of engagement. NSSF is calculated on gross salary, the same base as PAYE.
A worked example
Take a gross salary of UGX 1,000,000 per month (2026 bands). PAYE is nil on the first 335,000; 10% on the next 75,000 (UGX 7,500); 25% on the next 75,000 (UGX 18,750); and 30% on the remaining 515,000 (UGX 154,500) — a total PAYE of UGX 180,750. NSSF takes a further 5% of gross (UGX 50,000). Net take-home is therefore about UGX 769,000 (before any Local Service Tax). The calculator above does this automatically for any salary.
What the July 2026 change means for you
Raising the tax-free threshold to UGX 335,000, together with the new 25% middle band, delivers relief across lower and middle earners — the first 335,000 of salary is now tax-free instead of the first 235,000, and income between 410,000 and 485,000 is taxed at 25% instead of 30%. The reform eased pressure on workers after the threshold sat unchanged since 2012. Employers must apply the new bands to all salaries from the July 2026 payroll cycle onward.
Frequently asked questions
Is PAYE calculated before or after NSSF?
In Uganda, PAYE is calculated on gross salary before the NSSF employee contribution is deducted. Both PAYE and the 5% NSSF are then taken from gross to arrive at net pay.
What salary is tax-free in Uganda?
From 1 July 2026, monthly income up to UGX 335,000 is free of PAYE (raised from UGX 235,000).
When is PAYE due?
Employers must file and remit PAYE to URA monthly, by the 15th of the following month, alongside NSSF.
Sources: Uganda Revenue Authority PAYE rates; Income Tax (Amendment) Bill 2026 as reported by Ugandan tax advisories (March 2026). Figures for the 2026 threshold change reflect proposals pending commencement; confirm against final URA guidance. This article is general information, not tax advice.