How To Calculate PAYE Tax In Uganda

What Is Paye Tax?

A pay-as-you-earn tax, or pay-as-you-go in Uganda, is a withholding of taxes on income payments to employees. Amounts withheld are treated as advance payments of income tax due. They are refundable to the extent they exceed tax as determined on tax returns.

How To Calculate Paye Tax In Uganda?

PAYE on regular income is calculated by determining the tax on a projected income for the year (called the annual equivalent) and then de-annualising the tax to determine the tax payable for the period.

How Much PAYE Is Deducted From Salary In Uganda?

Resident individuals enjoy a tax free annual income threshold of UGX. 2,820,000 per annum. The balance is taxed at 10%, 20% or 30% depending on the income bracket. Individuals who earn above UGX 120,000,000 pa pay an additional 10% on the income above 120m.

What Percentage Is PAYE Tax In Uganda?


Monthly Taxable Pay (Ush)Annual Taxable Pay (Ush)Rate of Tax (%)
235,001 – 335,0002,820,001 – 4,020,00010
335,001 – 410,0004,020,001 – 4,920,00020
410,001 – 10,000,0004,920,001 – 120,000,00030
Above 10,000,000Above 120,000,00040

How Is PAYE Paid In Uganda?

PAYE is deducted every month and is charged based on your monthly income while LST is charged annually and it is based on one’s annual income. This is usually deducted during the 1st four months of the financial year after which the deduction is stopped.

What Percentage Of Salary Is PAYE In Uganda?

If it weren’t for the PAYE system, which forces employees to pay taxes as they earn their money, each of us would be liable for a lump sum payment of between 18% and 45% of our total monthly earnings at the end of each tax year.

Is PAYE Calculated On Gross Or Net Salary In Uganda?

For individuals, gross income is the sum of all wages, salaries, profits, interest payments, rents, and other forms of earnings, before any deductions or taxes. The PAYE calculated as a result is based on the employee’s earnings and includes basic salaries, bonuses, fringe benefits and other allowances.

How Do I Calculate PAYE Tax In Excel In Uganda?

Therefore, go through the below steps carefully to use the IF function for calculating Income Tax in Excel.

STEP 1: Set up Income Tax Slab.

STEP 2: Input Income Data.

STEP 3: Use Excel IF Function.

Final Output.

Apply Excel VLOOKUP Function to Calculate Income Tax.

Income Tax Calculation with SUMPRODUCT Function in Excel.

What Percentage Of Salary Is Taxed In Uganda?

For the tax year, there are seven federal tax brackets: 10%, 12%, 22%, 24%, 32%, 35% and 37%. Your filing status and taxable income (such as your wages) determine the bracket you’re in.

Who Pays PAYE Tax In Uganda?

Employees that earn income above a designated income threshold pay a Pay As You Earn (PAYE) payroll tax. Rates range from 10% – 40% depending on income earned.

Is PAYE Deducted Every Month In Uganda?

PAYE tax is collected by your employer and sent to the tax office every week or month. The amount of PAYE tax you pay is worked out by the tax code you are given. Paying tax through Pay as you Earn means any income tax is deducted straight from your wages or other income before you are paid.

What Percentage Is Deducted From Gross In Uganda?

The term “payroll taxes” refers to FICA taxes, which is a combination of Social Security and Medicare taxes. These taxes are deducted from employee paychecks at a total flat rate of 7.65 percent that’s split into the following percentages: Medicare taxes 1.45 percent. Social Security taxes 6.2 percent.

Is PAYE The Same As Income Tax In Uganda?

Most people pay Income Tax through PAYE . This is the system your employer or pension provider uses to take Income Tax and National Insurance contributions before they pay your wages or pension. Your tax code tells your employer how much to deduct.