Uganda Personal Income Tax Guide 2026

Overview — Uganda Revenue Authority (URA)

The Uganda Revenue Authority (URA) administers all income tax under the Income Tax Act (Cap. 340). Ugandan tax residents are taxed on worldwide income; non-residents are taxed only on Uganda-source income. Tax residency is determined by physical presence of 183+ days in a tax year or having a permanent home in Uganda. Employees have tax withheld at source by their employer under the PAYE system. The tax year runs from July 1 to June 30.

PAYE Tax Brackets 2026

Uganda applies a progressive monthly bracket system with a top rate of 40%. For 2026, the monthly brackets are as follows:

• 0% — on the first UGX 235,000 per month
• 10% — on the next UGX 100,000 per month (UGX 235,001–335,000)
• 20% — on the next UGX 75,000 per month (UGX 335,001–410,000)
• 30% — on the next UGX 9,590,000 per month (UGX 410,001–10,000,000)
• 40% — on income above UGX 10,000,000 per month

These brackets mean that a taxpayer earning UGX 5,000,000/month pays approximately UGX 1,399,500 in PAYE — an effective rate of ~28%.

Annualised Brackets

For annual tax computation, the monthly brackets are multiplied by 12:

• 0% — up to UGX 2,820,000 per year
• 10% — on UGX 2,820,001–4,020,000
• 20% — on UGX 4,020,001–4,920,000
• 30% — on UGX 4,920,001–120,000,000
• 40% — on income above UGX 120,000,000

Allowable Deductions and Reliefs

Uganda's PAYE system allows limited deductions. NSSF contributions (5% employee share) are deductible from gross income before PAYE is calculated. Certain approved retirement fund contributions and life insurance premiums may also qualify for relief subject to limits.

Employee Withholding (PAYE)

Employers are required to withhold income tax from employee salaries under the PAYE system. The employer calculates monthly tax based on gross salary, deducts NSSF contributions, applies the tax brackets, and remits the tax to URA by the 15th of the following month. Employers must register for PAYE with URA and file monthly PAYE returns.

Filing Requirements

All individuals with income subject to tax must file an annual tax return by 30 June following the end of the tax year (July 1 - June 30). Employees whose tax is fully withheld (PAYE) still file a simplified return. Self-employed individuals must file a detailed return with business income and expenses. Late filing attracts penalties.

FAQs

Do I need to file an annual return if I am a salaried employee?

Yes, all employees must file an annual tax return by 30 June, even if tax was fully withheld at source.

Are bonuses and allowances taxable?

Yes, all cash payments including bonuses, commissions, housing allowances, and other benefits are taxable as employment income.

What is the penalty for non-compliance?

Late filing and late payment attract penalties and interest. Evasion can result in penalties of up to 100% of the tax evaded plus criminal prosecution.

Disclaimer

This guide provides general information about Ugandan personal income tax for the 2026 tax year. Tax laws, rates, and regulations may change. Always consult with a qualified Ugandan tax advisor or the Uganda Revenue Authority for advice specific to your situation. InvestmentKit does not provide tax advice.