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How To Hire New Remote Employees | Uganda

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Uganda

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Uganda

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Hire employees in
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, hassle-free

With Workpay, your business can easily hire employees in

Uganda

.
No more worrying about local laws, complex tax systems or
managing international payroll. Workpay takes care of everything
in 150+ countries.

Book a discovery call
capital city
Uganda
currency
Ugandan shilling (UGX)
language spoken
Official language English
payroll frequency
Weekly, bimonthly, or semi-monthly
employer taxes
10%
vat - standard rate
18%
cost of living index
652200.00 UGX
gdp - real growth rate
2.9% (2020)
termination process
Varies
employee protections
Moderate
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Overview

The unemployment rate in Uganda is less than 4% but a majority of citizens work in low-wage formal and informal sector jobs. Agriculture is the backbone of the economy and the principal source of employment in the country; 73 percent of the labor force, primarily in rural areas work in the sector. However, with increased urbanization, other types of jobs are expanding, especially in metropolitan areas.

Skills enable organizations to operate at a greater level of productivity and enable workers to participate in higher-productivity positions. Therefore, it is vital to provide foundation skills through high-quality basic education and a higher rate of transition to secondary education, as well as to encourage the private sector to participate in the upgrading of Uganda's labor force.

Public Holidays

1 January- New Year's Day

26 January- NRM Liberation Day

16 February- Archbishop Janani Luwum Memorial Day

8 March- International Women's Day

15 April- Good Friday

18 April- Easter Monday

1 May- Labour Day

2–3 May- Eid al-Fitr

3 June- Uganda Martyrs' Day

9 June- National Heroes' Day 

9–10 July- Eid al-Adha

9 October- Independence Day of Uganda

25 December- Christmas Day

26 December- Boxing Day

Minimum wage

The monthly minimum wage in Uganda is 6,000 Ugandan shillings for all workers. The Ugandan minimum wage was last adjusted on January 1, 1884. In 2015, a new Minimum Wage Bill was introduced in parliament for debate.

Payroll cycle

Salaries are paid monthly, which is the most prevalent payroll plan in Uganda. However, some companies pay their staff weekly, bimonthly, or semi-monthly.

Taxation

Income tax is levied on corporations, partnerships, trusts, and people that reside or conduct business in Uganda under the Ugandan Income Tax Act Cap 340 (ITA). In Uganda, the withholding tax rate on most payments is 15%. In the case of goods and services, however, a withholding tax of 6% is imposed.

Leaves

Annual Leave 

Each employee is entitled to 21 annual leave days per year, with full compensation. An employee may take his or her annual leave at any point in the year, based on the terms agreed with the employer.

The 21 days comprise only working days. For example, if an employee does not regularly work on Saturday and Sunday, those days cannot be included as leave days.

Maternity Leave 

Female staff with a valid contract of services qualifies for 60 days of maternity leave. However, the law does not indicate the minimum period of service to be eligible for maternity leave. In case of a miscarriage, the employee is entitled to at least four weeks of leave in which the employee is entitled to full pay.  

Paternity Leave

Male employees are entitled to four days of paternity leave with full pay.  However, paternity leave applies to an official spouse only. 

Sick Leave

Any employee who has worked for the company for at least one month is eligible for two months of paid sick leave; the first month is fully paid while the second month is unpaid leave.  The employer can terminate the employee's employment contract after the second month of illness if all of the conditions outlined in the employment contract are not met.

Termination process

To terminate an employment contract, notice must be given in writing and must adhere to the time frames of the employment. 

Notice Period 

The length of the notice period is determined by the following factors:

  • If an employee has worked for more than 6 months but less than a year, a two weeks’ notice is required. 
  • If an employee has worked for more than 12 months but less than 5 years, they should be given a notice of at least one month.
  • If an employee has worked for 5 years but less than 10 years, they should be given a notice of not less than two months. 
  • If an employee has worked for more than 10 years, they should be given a three months’ notice.

Severance Pay

In the event of termination or wrongful dismissal, an employee who has worked for at least six months is entitled to severance pay. The employee and the employer are required by law to discuss severance pay. In the absence of such a negotiated agreement, a labor officer may make the decision.

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