What counts as terminal benefits in Uganda?
When employment ends in Uganda, an employee may be owed several distinct payments β and they are not all the same thing. Under the Employment Act 2006 (last amended 2023), terminal benefits typically include any outstanding wages, pay in lieu of notice (if notice isn't worked), accrued but unused leave, severance allowance where it applies, and any contractual gratuity. Understanding which apply to a given exit is where most disputes start.
Severance pay β when it's due
Severance allowance is payable to an employee who has completed at least six months of continuous service and whose employment ends through redundancy, employer insolvency, unfair dismissal, or certain other circumstances in the Act. Crucially, the amount is negotiable between employer and employee (or their union) β the law does not fix it. In practice, Ugandan courts often refer to a benchmark of one month's gross salary per completed year of service, which is what this calculator uses as a starting estimate.
Severance is NOT payable on summary dismissal for proven misconduct, on termination of a probationary contract, or where a dismissed employee unreasonably refuses re-employment. The calculator reflects this β selecting "summary dismissal" removes severance.
Notice pay
If an employer ends employment without the employee working their notice, they must pay in lieu. The statutory notice depends on length of service: two weeks for 6β12 months, one month for 1β5 years, two months for 5β10 years, and three months for 10+ years. Enter the months owed and the tool values it at your monthly salary.
Accrued leave and gratuity
Unused annual leave is paid out at the daily-wage equivalent (we use monthly salary Γ· 26 working days). Gratuity, where it exists, is purely contractual β common in NGO and fixed-term contracts β so enter the rate from your own contract (e.g. 15% or 25% of annual salary per year of service) and the tool computes it.
Frequently asked questions
Is gratuity mandatory in Uganda? No β gratuity is contractual, not a statutory requirement. It's payable only if your contract or a CBA provides for it.
Is severance taxed? Terminal payments can have tax implications; treatment varies, so confirm with URA or a tax advisor.
How soon must terminal benefits be paid? Promptly β in practice within the final payroll cycle or shortly after the last working day. Late payment can itself trigger a claim.