Payroll Compliance in Uganda: What Employers Must Know in 2025
Introduction
Navigating payroll in Uganda requires more than just calculating net salaries. Employers must follow a complex set of statutory requirements—from taxes and benefits to filing deadlines. As we move into 2025, changes in labor law and tax policies mean that staying compliant is more critical than ever.
In this guide, we break down what every Ugandan employer needs to know about payroll compliance, and how MaryHill Tax Services can make it stress-free.
1. Understanding PAYE (Pay As You Earn)
Employers are required to deduct PAYE from employee salaries and remit it to URA monthly. Incorrect calculations or missed submissions can result in penalties and audits.
Tip: Use URA’s latest tax brackets and formulas. MaryHill automates this for all payroll clients.
2. NSSF Contributions
All registered companies must remit 10% (employer) and 5% (employee) of each employee’s gross salary to the National Social Security Fund.
Advice: Ensure employee registration and timely monthly submissions.
3. Local Service Tax (LST)
LST is an annual tax paid by employees based on their location and income. Employers are responsible for collecting and submitting this tax.
Solution: Maintain a record of employee residence and income brackets.
4. Handling Statutory Benefits and Deductions
These include gratuity, overtime, medical insurance, and leave entitlements. Mismanagement can result in disputes or labor tribunal cases.
Solution: Establish clear HR and payroll policies supported by compliant payroll systems.
5. Filing and Submission Deadlines
URA expects PAYE and other deductions to be filed by the 15th of every month. Failure to meet this deadline attracts fines and interest.
Reminder: Let MaryHill take over your filings to ensure 100% compliance.
6. Audit Preparedness
Maintaining clear payroll records and submission logs makes audits quick and painless.
What We Do: We prepare and archive all statutory returns for easy retrieval during audits.
Conclusion
Compliance isn’t optional—it’s your legal duty and a cornerstone of employee trust. At MaryHill, we ensure your entire payroll process is smooth, legal, and penalty-free.
👉 Reach out to us today to outsource your payroll and stay compliant in 2025.
