Uganda Tax Tables 2024 - Tax Rates and Thresholds in Uganda

This page contains the tax table information used for the calculation of tax and payroll deductions in Uganda in 2024. These tax tables are used for the tax and payroll calculators published on iCalculator™ UG, these tools are provided for your free use on our website. If you would like additional tax table information added to the tax calculators for Uganda or would like to add to or suggest amendments to the information herein then please contact us.

Uganda Personal Income Tax Tables in 2024

The Income tax rates and personal allowances in Uganda are updated annually with new tax tables published for Resident and Non-resident taxpayers. The Tax tables below include the tax rates, thresholds and allowances included in the Uganda Tax Calculator 2024.

Uganda Local Service Tax Deduction Rates in 2024

Local Service Tax (LST) in Uganda is a crucial component of the country's tax system, aimed at bolstering local government finances to enhance service delivery and development at the grassroots level. This following provides a comprehensive overview of LST, exploring its definition, purposes, and importance within the Ugandan context.

Understanding Local Service Tax

LST is a tax levied on the income of individuals employed or engaged in business within the jurisdiction of local governments in Uganda. It is designed to be a direct contribution from residents and businesses towards the cost of local services provided by municipal authorities. LST is collected annually and is due by all income-earning residents within a local council's jurisdiction, with some exemptions based on income levels or specific criteria set by local authorities.

What LST Funds

The revenue collected from LST is earmarked for funding various local government projects and services. These include infrastructure development, such as the construction and maintenance of roads, bridges, and public buildings. LST also supports the provision of educational facilities, healthcare services, waste management, and community development projects. By directly contributing to local budgets, LST plays a vital role in improving the quality of life for residents through enhanced service delivery.

Importance of LST in Uganda

LST is of significant importance in Uganda for several reasons. Firstly, it provides local governments with a steady source of revenue, which is essential for the autonomous planning and execution of development projects. This tax empowers local councils to address the specific needs of their communities more effectively, rather than relying solely on central government allocations or foreign aid.

Moreover, LST fosters a sense of responsibility among residents and businesses towards the development of their localities. By contributing directly to local services, taxpayers are more likely to take an active interest in how their money is spent, leading to increased accountability and transparency in local governance.

Compliance and Administration

The collection and administration of LST are primarily the responsibilities of local government authorities. To ensure compliance, local councils engage in awareness campaigns, educating residents and businesses about their tax obligations. The process of assessing, collecting, and managing LST is streamlined to make it as efficient as possible for taxpayers to meet their responsibilities.

Challenges and Prospects

While LST plays a critical role in local development, it faces several challenges, including issues of compliance, administrative inefficiencies, and the equitable distribution of the tax burden. Efforts are continuously made to address these challenges, including the use of technology to improve collection methods and the implementation of fair assessment policies to ensure that the tax burden is distributed appropriately.

In conclusion, Local Service Tax in Uganda is a vital tool for local development and service delivery. It not only provides necessary funds for infrastructure and services but also strengthens the bond between local governments and their constituents through shared responsibility for community well-being. As Uganda continues to grow and develop, the role of LST in fostering sustainable local development becomes increasingly important.

In Uganda, contributions made to the National Social Security Fund (NSSF) by both employees and employers are considered deductible expenses for the purpose of calculating taxable income. This means that the amounts contributed to the NSSF can be deducted from the gross income of both individuals and companies before arriving at the taxable income. This provision encourages participation in the NSSF by reducing the tax burden on contributors, ultimately promoting savings and financial security for employees in their retirement.

Uganda Social Security and Payroll Deduction Rates in 2024

In Uganda, both employees and employers are subject to various social security and payroll deductions. These deductions are crucial for ensuring that workers are supported during times of need such as retirement, health challenges, and occupational hazards. The Uganda National Social Security Fund (NSSF) is the principal entity managing social security contributions in the country. This guide provides an overview of the types of social security and payroll deductions in Uganda and what each element funds.

National Social Security Fund (NSSF)

The NSSF is a mandatory saving scheme for employees in the formal sector. It primarily aims to provide financial security for its members upon retirement. In addition to retirement benefits, the NSSF also offers invalidity, survivorship, and emigration grants. The contributions made to the NSSF are a percentage of the employee's gross salary, with both the employer and the employee contributing.

Health Insurance Contributions

While not universally mandatory, some employers in Uganda offer health insurance plans as part of their benefits package. These plans require contributions from both employers and employees, with the aim of providing access to medical services. Health insurance contributions help cover the cost of medical treatments, hospital visits, and sometimes, prescription medications.

Workers' Compensation

Employers in Uganda are required to contribute to the Workers' Compensation Fund, which is designed to provide compensation to employees who suffer work-related injuries or illnesses. This fund ensures that employees who are injured or become ill due to their job receive financial assistance for medical care, rehabilitation, and lost wages.

Payroll Taxes

Payroll taxes in Uganda include Pay-As-You-Earn (PAYE) tax, which is deducted directly from an employee's salary by the employer. While PAYE is technically an income tax, it is considered a payroll deduction because it is withheld at the source. The funds collected through PAYE support the government's general budget, contributing to public services and infrastructure.

Unemployment Contributions

Currently, Uganda does not have a formal unemployment insurance program. However, discussions and proposals have been made towards establishing a system that would provide temporary financial support to individuals who lose their jobs without fault of their own.

Significance of Social Security and Payroll Deductions

Social security and payroll deductions play a vital role in ensuring the well-being of Uganda's workforce. They provide a safety net for employees, offering financial support during retirement, in case of health issues, or following workplace injuries. For employers, contributing to these schemes is part of their social responsibility, aiding in the creation of a stable and motivated workforce. Moreover, these contributions help in the equitable distribution of wealth and the funding of public services, contributing to the overall development of the country.

Understanding the types of social security and payroll deductions in Uganda is essential for both employers and employees. It ensures compliance with the law and helps individuals plan for their future, knowing that they have a safety net in place. While the current system covers several critical areas, ongoing discussions and reforms aim to address gaps and improve the comprehensiveness of social security in Uganda.

Uganda VAT Rates in 2024

VAT rates for Uganda are reviewed annually, you can use the VAT Calculator to calculate VAT due in Uganda or use the Reverse VAT Calculator to calculate the net cost of goods/services after deducting VAT.

Historic Tax Tables supported for Uganda

The following tax tables are supported by iCalculator™ UG as part of the suite of free tax tools we provide for Uganda.