How Much Does NSSF Deduct From Salary in Uganda?

How Much Does NSSF Deduct From Salary in Uganda?

If an individual earns a gross salary of UGX 3.5 million, how much goes to his/her NSSF account at the end of the month?

Social security contributions

An individual in employment is obligated to make a contribution of 5% of one’s gross earnings to the national social security fund.

An individual who is an employer is also obligated to make contributions to the national social security fund for each employee, amounting to 10% of their gross pay.

Local Service Tax

An individual in employment is obligated to pay Local Service Tax to the Town Council where one resides. 

According to the Local Service Tax Act and guidelines for the implementation of the Local Service Tax, an individual who is an employer is required to determine and deduct the Local Service Tax from the salaries and wages of their employees within a period of four months not later than the 15th day of November.

Consumption taxes

Value-added tax (VAT)

VAT is charged on taxable supplies made by taxable persons, the importation of goods other than in cases of exempt imports, and imported services by any person. The standard VAT rate is 18%; some items are zero rated and others are exempt.

In cases of supplies of taxable products, the VAT is paid by the person making the supply. In cases of importation of goods, the VAT is paid by the importer. In cases of imported services, the VAT is paid by the person importing the services. If an individual falls in any of these categories one is expected to file a return with the revenue authority and remit the VAT to the authorities.

A taxable person is one who is registered for tax purposes; a person is required to register for VAT if, within any period of three calendar months, one made taxable supplies exceeding UGX 37,500,000. In such cases, the person should register within 20 days of the year’s end.

VAT returns are required to be filed on a monthly basis and are due on the 15th day following the month.

What percentage of salary is PAYE in Uganda?

Upon the implementation of this adjustment, the PAYE return now allows for both 30% and 40% fixed rates on taxable employment income earned from secondary employment, depending on the amount paid to the second employee. When the employee’s employment income exceeds UGX 10 million, the fixed rate applicable is 40%.

How is the NSSF benefit calculated in Uganda?

NSSF is deducted monthly and the employee contributed 5% of their gross salary while the employer contributes 10% of the employee’s gross salary.