Employer of Record in Uganda

Hiring Employees in Uganda With An EOR

Hiring in Uganda can seem complex – but with the right facts and tools, it’s simple. This guide walks you through the local job market, shows how Employer of Record services guarantee compliance, and highlights the key labor laws you need to know.

Hiring Employees In Uganda
Employer Of Record In Uganda

Capital City

Kampala

Currency

Ugandan Shilling

 (

USh

)

Timezone

GMT +3

Payroll Frequency

monthly

Tax Year

1 July - 30 June

Employer Tax

10.00%

Languages

Swahili

English

Jesse Weisz

R&D Analyst

Last Updated

September 12, 2025

In This Guide

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Employment Guide For Hiring in Uganda

Looking to grow your team in Uganda? It’s a great way to tap into new talent and fresh markets – but hiring across borders comes with its own set of hurdles. From understanding local labor laws to managing payroll and staying compliant, it gets complex if you don’t have local HR support.

Playroll’s full-service Employer of Record platform handles all the heavy lifting so you can hire confidently in Uganda without setting up a local entity. In this guide, we’ll break down everything you need to know about hiring employees in Uganda, including employment contracts, payroll, statutory benefits, and compliance with local labor laws.

What to Know Before Hiring employees in Uganda

Minimum Wage: There is no minimum wage in Uganda.

Working Hours: According to Ugandan labour laws, the standard working hours are eight hours per day and a total of 48 hours per week.

Labor Laws: An Employer of Record acts as the legal employer for workers in Uganda, taking on key responsibilities to ensure compliance with local labor laws and regulations. 

Payroll Taxes: In Uganda, employers contribute about 10% in payroll taxes, which typically cover social security, health care, and other statutory benefits.

Average Salary: The average salary in Uganda is approximately UGX 2,620,000.

How to Hire Employees In Uganda

Hiring in Uganda for the first time can be overwhelming, especially when navigating unfamiliar employment laws. So, how do you get started? There are three main ways to hire in Uganda: Set up your own legal entity, hire independent contractors, or use an EOR service to handle payroll and global HR for you. Below, we’ll walk you through each option in detail.

1. Set Up A Local Entity In Uganda

Setting up a local entity in Uganda is the traditional route for businesses that want to build a long-term presence in a new market. It allows for direct hiring, fine control over operations, and compliance with local labor laws.

That said, the process is rarely simple. It involves navigating complex legal structures, extensive registration procedures, ongoing payroll administration, and local tax obligations. Beyond the administrative burden, the costs of incorporation, maintaining local offices, and hiring compliance experts can quickly add up.

For companies operating with slim margins or testing new markets, these financial and operational commitments often make setting up a local entity an unfeasible option compared to more flexible and cost-effective solutions.

2. Use An Employer Of Record In Uganda

An Employer of Record (EOR) acts as the legal employer for workers in Uganda, taking care of compliance, payroll, and local labor regulations. This makes it fast and straightforward to bring on talent without the cost and complexity of setting up a local entity. For businesses looking to test new markets or scale teams across borders with confidence, EORs offer a flexible, low-risk solution.

The Employer of Record in Uganda is responsible for:

  • Employment Compliance: Ensure all employment contracts comply with Uganda's labor laws and regulations, including proper classification of employees.
  • Payroll Management: Calculate, process, and distribute employee salaries in accordance with Uganda's payroll laws, including deductions for taxes and social security contributions.
  • Tax Filing and Contributions: Handle the registration, filing, and payment of employer taxes and social security contributions to the relevant authorities.
  • Employment Contracts: Draft and maintain compliant employment agreements, detailing salary, benefits, working hours, and termination terms in line with Uganda's legal requirements.
  • Benefits Administration: Provide mandatory employee benefits as required by Uganda's labor laws, such as health insurance, pension contributions, and statutory leave.

3. Hire Independent Contractors In Uganda

Hiring independent contractors has boomed in popularity because of the cost savings and flexibility they offer. It can be a great option if you require niche skills or short-term project support. Contractors allow businesses to access specialized skills quickly, without the time and cost of setting up a local entity.

However, it’s important to know the limits of this model: contractors are not a substitute for full-time employees. Relying on them for ongoing, long-term roles can create serious compliance risks, including employee misclassification, which can lead to fines, back taxes, and reputational damage.

Playroll’s contractor management solutions make it simple to compliantly engage, onboard, and pay contractors around the world. We provide clear visibility into agreements, streamline payments, and reduce compliance risks – so you can focus on getting the work done. And when you’re ready to take the next step, we can help seamlessly convert contractors into full-time employees through our global Employer of Record service.

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Labor Laws in Uganda

Businesses can only operate smoothly in Uganda if they comply with local labor laws including drafting compliant employment contract agreements and meeting taxation and payroll obligations. Learn more about the employment laws and regulations in Uganda below, to avoid any compliance issues.

Employment Contract Requirements

Uganda's 1995 Constitution and the 2006 Employment Act define employee protections and workers' rights, ensuring equal pay for equal work and prohibiting discrimination based on age, religion, gender expression, and race. Common hiring process inquiries may include minimum wage, overtime rates, and guaranteed paid leave.

Onboarding Process

We can help you get a new employee started in Uganda quickly, with a minimum onboarding time of just 1-2 working days. The timeline starts once the employee submits all required information onto the Playroll platform and completes any necessary local authority registrations.

For non-nationals, the Right to Work assessment (if applicable) may add up to three extra days. Additional time may be needed for follow-ups on this assessment. Please note, payroll cut-off dates can impact the actual start date. Playroll's payroll cut-off date is the 10th of each month unless otherwise specified.

Working Hours in Uganda

According to Ugandan labour laws, the standard working hours are eight hours per day and a total of 48 hours per week.

Overtime in Uganda

Employers can ask employees to work overtime, but the combined work hours, including overtime, should not surpass 10 hours per day or 56 hours per week, with exceptions for shift workers. Overtime is compensated at 150% of the regular rate on regular weekdays and at 200% of the regular rate on public holidays.

Probation Period in Uganda

Probation periods are not mandatory but serve as an opportunity for employers to assess a new employee's performance and suitability for the position. The probation period can last up to six months, providing sufficient time for both parties to evaluate the employment relationship.

Average Salary In Uganda

The current average monthly salary in Uganda in 2025 is approximately UGX 2,620,000. Salaries vary significantly based on experience, industry, and location - entry-level workers and those in small businesses typically earn less than those in large enterprises or specialized sectors like finance or technology. Urban areas such as Kampala offer higher pay compared to rural regions. Uganda’s economic landscape remains relatively stable, with inflation around 3.8% and steady GDP growth over 6%, which supports modest wage increases and employment opportunities.

Not sure what to pay in Uganda? Compare fair, local salaries with our free benchmarking tool.
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Working Hours in Uganda

Minimum Wage in Uganda

How an Employer of Record Helps You Hire in Uganda

Growing your team in Uganda is exciting, but it’s not without challenges. Local labor laws are often nuanced, and hiring without the right legal structure or processes can lead to misclassification, non-compliance penalties, or disputes. An Employer of Record removes that risk by acting as the legal employer on your behalf, taking full responsibility for compliance, contracts, payroll, and employee benefits.

This gives you the freedom to scale at your own pace, whether you're adding one employee or building out an entire function, without the burden of setting up and managing a local entity. You remain in control of day-to-day responsibilities and performance, while the EOR ensures every hire is legally protected and properly supported. It's a strategic way to expand globally without spreading your internal team too thin or exposing your business to legal liabilities in unfamiliar markets.

Payroll Management in Uganda

Fiscal Year in Uganda

1 July - 30 June is the 12-month accounting period that businesses in Uganda use for financial and tax reporting purposes.

Payroll Cycle in Uganda

The payroll cycle in Uganda is usually monthly, with employees being paid at the end of the month.

Minimum Wage in Uganda

There is no minimum wage in Uganda.

Bonus Payments in Uganda

In Uganda, there is no mandatory requirement for employers to provide bonuses or 13th month salaries. In fact, bonuses are not widely offered in Ugandan workplaces.

Employment Taxes in Uganda

Employer Tax Contributions

Employer payroll contributions are generally estimated at an additional 10% on top of the employee salary in Uganda.

Tax TypeTax Rate
National Social Security Fund10%

Employee Payroll Tax Contributions

In Uganda , the typical estimation for employee payroll contributions cost is around 5%.

Tax TypeTax Rate
National Social Security Fund5%

Individual Income Tax Contributions

In Uganda, the individual income tax ranges from 0% to 40%. Income tax is calculated according to progressive rates.

Income Bracket Tax Rate
0 - 2,820,000 UGX 0%
2,820,001 UGX - 4,020,000 UGX 10%
4,020,001 UGX - 4,920,000 UGX 20%
4,920,001 UGX - 120,000,000 UGX 30%
120,000,001 UGX and above 40%

Pension in Uganda

The National Social Security Fund (NSSF) is Uganda's main source of public pensions, funded through contributions from both employers and employees. Employers are mandated to contribute 10% of their employees' salaries, while employees themselves contribute 5% of their earnings.

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The tax-related information provided in this guide is intended for general guidance and informational purposes only. Reach out to our dedicated team for insights on remote hiring in Uganda tailored to your needs.

Employment Taxes and payroll in Uganda

How an EOR Helps You Run Payroll in Uganda

Employees expect to be paid accurately, on time, and in full compliance with local standards. When you're hiring in Uganda, providing a smooth payroll experience is critical to retention and trust. An Employer of Record ensures that employees receive what they’re owed, without errors, delays, or confusion about taxes or benefits.

Key Ways an EOR Supports Payroll in Uganda:

  • Reliable Salary Payments: Ensures employees are paid promptly in local currency.
  • Clear Payslips & Documentation: Provides employees with compliant, understandable records.
  • Correct Benefits & Contributions: Delivers legally mandated contributions and any changes in compensation, like bonuses.
  • Payroll Setup & Processing: Handles salary calculations, tax withholdings, and local reporting obligations.
  • Boosts Employee Confidence: Builds trust with compliant, consistent payroll operations.

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Work Permits & Visas in Uganda

In Uganda, employers hiring international workers must navigate the application process for various work permits like Class D for professionals or Class G for investors. Processing times typically range from 4 to 6 weeks, and employers must provide comprehensive documentation to ensure compliance with immigration regulations.

Annual Leave & Company Policies In Uganda

Mandatory Leave Entitlement in Uganda

The annual leave entitlement in Uganda is 21 days for a full time worker. These can include public holidays on top of that or within those days, which would otherwise be unpaid.

Public Holidays In Uganda

Public holidays in Uganda may vary each year, but some of the major and recurring public holidays typically observed in the country include:

HolidayDate
New Year's Day1 January
NRM Liberation Day26 January
Archbishop Janani Luwum Day16 February
International Women's Day8 March
Good FridayDate varies (Christian holiday)
Easter MondayDate varies (Christian holiday)
Labour Day1 May
Martyrs' Day3 June
Eid al-FitrDate varies (Islamic holiday, end of Ramadan)
Eid al-AdhaDate varies (Islamic holiday, Feast of Sacrifice)
National Heroes Day9 June
Independence Day9 October
Christmas Day25 December
Boxing Day26 December

Paid Time Off in Uganda

Employees become eligible for annual leave after six months of employment, and those working at least 16 hours a week are entitled to 21 working days of paid leave. This entitlement accrues at a rate of seven days for every continuous four-month period of service, once they complete 12 months of continuous employment.

Maternity Leave In Uganda

Female employees are granted 60 working days (equal to eight and a half weeks) of fully paid maternity leave, with the first four weeks being compulsory following childbirth or miscarriage.

Paternity Leave In Uganda

Male employees are entitled to four fully paid working days of paternity leave in a year following the birth of their child or the miscarriage of their spouse, covered by the employer.

Sick Leave In Uganda

An employee working a minimum of 16 hours per week becomes eligible for sick leave after one month of service. During the first month of illness or injury, they are entitled to receive full pay for their sick leave.

Parental Leave In Uganda

Uganda's labor laws do not provide a shared parental leave policy.

Annual Leave and Company Policies In Uganda

Employee Benefits in Uganda

Using an Employer of Record to Administer Benefits in Uganda

In Uganda, failing to provide the correct employee benefits can have serious consequences. Mistakes in benefits administration may result in fines and harm your reputation as an employer. An Employer of Record ensures statutory benefits and leave are handled correctly, every time, and provides comprehensive options for extra perks to reward your team.

Beyond just avoiding legal issues, a well-managed benefits program builds trust with your employees. An EOR ensures benefits are set up quickly during onboarding, updated when employee status changes, and fully compliant with national regulations. They also manage communication with employees, so there’s no confusion around what’s offered and how to access it. This combination of legal compliance and positive employee experience is hard to replicate without local infrastructure. With an EOR, you can offer peace of mind to your team (and to yourself) knowing that your benefits program in Uganda is running as it should.

Termination and Severance Policies in Uganda

Employment Termination and Severance Policies in Uganda

Termination Process in Uganda

Terminations in Uganda are not straightforward. Unlike in some countries, employers in Uganda are not permitted to terminate employment at will. Instead, terminations must be justified by valid grounds.

  • Voluntarily by the employee
  • By mutual agreement
  • By the expiration of the contract
  • Unilaterally by the employer based on:
  • Probation period
  • Objective grounds
  • Disciplinary dismissal
  • Performance due to unsuitability for the job

Notice Period in Uganda

In Uganda, the minimum notice period for termination is 2 weeks, and it will increase according to the length of employment as follows:

  • 2 weeks notice for service of more than 6 months but less than 1 year.
  • 1 month notice for service of more than 12 months but less than 5 years.
  • 2 months notice for service of more than 5 years but less than 10 years.
  • 3 months notice for service of 10 years or more.
  • Maximum of 90 days notice.

Severance in Uganda

Ugandan employment law outlines a broad spectrum of circumstances under which an employee is eligible for severance pay, including:

  • Unfair dismissal from work
  • Termination due to physical incapacity that wasnt caused by an employees misconduct
  • Termination due to the death or insolvency of the employer
  • Termination by a labour officer, due to the inability or refusal of the employer to pay any wages due.

Disclaimer

THIS CONTENT IS FOR INFORMATIONAL PURPOSES ONLY AND DOES NOT CONSTITUTE LEGAL OR TAX ADVICE. You should always consult with and rely on your own legal and/or tax advisor(s). Playroll does not provide legal or tax advice. The information is general and not tailored to a specific company or workforce and does not reflect Playroll’s product delivery in any given jurisdiction. Playroll makes no representations or warranties concerning the accuracy, completeness, or timeliness of this information and shall have no liability arising out of or in connection with it, including any loss caused by use of, or reliance on, the information.

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ABOUT THE AUTHOR

Jesse Weisz

Jesse is an experienced R&D Analyst at Playroll, a leading Employer of Record (EOR) provider. With a strong background in data analysis and market research, Jesse specializes in identifying emerging trends and driving innovation in global HR solutions. She is an all-rounder, critical thinker and success-seeker (often inextricably linked to being a late-night tea drinker).

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FAQs About Hiring in Uganda

What is the average salary in Uganda?

The average salary in Uganda in 2025 is about UGX 2.62 million per month, with higher earnings in urban areas and skilled professions, and lower pay in rural and entry-level roles.

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