ManyaGuide PAYE tax rates in Uganda 2026/27 – new bands and salary calculator
From 1 July 2026, salaries up to UGX 335,000 a month pay no PAYE (up from 235,000). Then 20%, 25% and 30% bands apply. Example: UGX 1,000,000 pays UGX 188,250. Try the salary calculator.
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PAYE (Pay As You Earn) is the income tax your employer deducts from your salary every month and pays to URA. The Income Tax (Amendment) Act 2026 changed the bands from 1 July 2026, and most employees now pay less.
PAYE bands for residents (from 1 July 2026)
| Monthly income (UGX) | PAYE |
|---|---|
| 0 – 335,000 | Nil |
| 335,001 – 410,000 | 20% of the amount above 335,000 |
| 410,001 – 485,000 | UGX 15,000 + 25% of the amount above 410,000 |
| Above 485,000 | UGX 33,750 + 30% of the amount above 485,000 |
| Above 10,000,000 | Extra 10% on the amount above 10,000,000 |
The tax-free amount rose from UGX 235,000 to UGX 335,000 a month (UGX 4,020,000 a year). If you earn more than UGX 485,000 a month, you pay UGX 13,750 less each month than under the old bands.
Worked examples
| Monthly salary (UGX) | PAYE now | PAYE before July 2026 |
|---|---|---|
| 300,000 | Nil | 6,500 |
| 500,000 | 38,250 | 52,000 |
| 1,000,000 | 188,250 | 202,000 |
Work out your own: PAYE and take-home pay calculator.
Other deductions on your payslip
NSSF: you contribute 5% of your gross pay and your employer adds 10%. Your 5% is not deducted before PAYE is calculated, so PAYE is worked out on your full gross pay.
Local Service Tax (LST): a tax for your local government (KCCA in Kampala). Employers deduct it in 4 equal instalments from July to October. In those months, LST is subtracted before PAYE is calculated.
| Monthly income (UGX) | LST per year (UGX) | Per instalment (×4) |
|---|---|---|
| 0 – 100,000 | Nil | – |
| 100,001 – 200,000 | 5,000 | 1,250 |
| 200,001 – 300,000 | 10,000 | 2,500 |
| 300,001 – 400,000 | 20,000 | 5,000 |
| 400,001 – 500,000 | 30,000 | 7,500 |
| 500,001 – 600,000 | 40,000 | 10,000 |
| 600,001 – 700,000 | 60,000 | 15,000 |
| 700,001 – 800,000 | 70,000 | 17,500 |
| 800,001 – 900,000 | 80,000 | 20,000 |
| 900,001 – 1,000,000 | 90,000 | 22,500 |
| Above 1,000,000 | 100,000 | 25,000 |
Second job?
Income from a second employer is taxed differently (at a higher flat rate) because the tax-free band is only given once. Ask the second employer's payroll team what rate they apply.
Was too much PAYE taken in July or August 2026?
The new law was signed on 20 August 2026 but backdated to 1 July 2026. Some employers deducted July and August PAYE at the old, higher rates. Ask your HR or payroll team whether those months were corrected.
Note: these bands are for resident individuals. Non-residents have no tax-free band.
Frequently asked questions
What is the PAYE tax-free threshold in Uganda?
UGX 335,000 a month (UGX 4,020,000 a year) from 1 July 2026.
How much PAYE do I pay on UGX 1,000,000?
UGX 188,250 a month under the 2026/27 bands.
Is NSSF deducted before PAYE in Uganda?
No. PAYE is calculated on your gross pay. Only Local Service Tax, in the months it is deducted, reduces the amount PAYE is charged on.
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