Below are two worked examples using the revised Uganda PAYE rates effective 1 July 2026. These examples assume:
- Employee is a resident taxpayer.
- Employee contributes 5% NSSF (employer contributes an additional 10%, which is not deducted from the employee’s salary).
- PAYE is calculated on taxable income after deducting the employee’s NSSF contribution.
- Local Service Tax (LST) is not included because it is deducted only during the applicable months (typically July–October) and varies by local authority.
Revised Monthly PAYE Rates (Effective 1 July 2026)
| Monthly Taxable Income | Tax Payable |
|---|---|
| Up to UGX 335,000 | Nil |
| UGX 335,001 – 410,000 | 20% of amount above 335,000 |
| UGX 410,001 – 485,000 | UGX 15,000 + 25% of amount above 410,000 |
| Above UGX 485,000 | UGX 33,750 + 30% of amount above 485,000 |
Example 1: Employee earning UGX 3,700,000 per month
Step 1: Gross Salary
Gross Salary = UGX 3,700,000
Step 2: Employee NSSF (5%)
= 5% × 3,700,000
= UGX 185,000
Step 3: Taxable Income
3,700,000 − 185,000
= UGX 3,515,000
Step 4: Calculate PAYE
Since 3,515,000 exceeds UGX 485,000:
PAYE
= 33,750 + 30% × (3,515,000 − 485,000)
= 33,750 + 30% × 3,030,000
= 33,750 + 909,000
= UGX 942,750
Step 5: Net Salary
Gross Salary
− Employee NSSF
− PAYE
= 3,700,000 − 185,000 − 942,750
= UGX 2,572,250
Employer’s NSSF Contribution (Not deducted from salary)
10% × 3,700,000
= UGX 370,000
Payslip Summary
| Item | Amount (UGX) |
|---|---|
| Gross Salary | 3,700,000 |
| Less: Employee NSSF (5%) | (185,000) |
| Taxable Income | 3,515,000 |
| Less: PAYE | (942,750) |
| Net Pay | 2,572,250 |
| Employer NSSF (10%) | 370,000 |
Example 2: Employee earning UGX 650,000 per month
Step 1: Gross Salary
Gross Salary = UGX 650,000
Step 2: Employee NSSF (5%)
5% × 650,000
= UGX 32,500
Step 3: Taxable Income
650,000 − 32,500
= UGX 617,500
Step 4: PAYE
Since 617,500 exceeds UGX 485,000:
PAYE
= 33,750 + 30% × (617,500 − 485,000)
= 33,750 + 30% × 132,500
= 33,750 + 39,750
= UGX 73,500
Step 5: Net Salary
650,000 − 32,500 − 73,500
= UGX 544,000
Employer’s NSSF Contribution (Not deducted)
10% × 650,000
= UGX 65,000
Payslip Summary
| Item | Amount (UGX) |
|---|---|
| Gross Salary | 650,000 |
| Less: Employee NSSF (5%) | (32,500) |
| Taxable Income | 617,500 |
| Less: PAYE | (73,500) |
| Net Pay | 544,000 |
| Employer NSSF (10%) | 65,000 |