The unemployment rate in Uganda is less than 4% but a majority of citizens work in low-wage formal and informal sector jobs. Agriculture is the backbone of the economy and the principal source of employment in the country; 73 percent of the labor force, primarily in rural areas work in the sector. However, with increased urbanization, other types of jobs are expanding, especially in metropolitan areas.

Skills enable organizations to operate at a greater level of productivity and enable workers to participate in higher-productivity positions. Therefore, it is vital to provide foundation skills through high-quality basic education and a higher rate of transition to secondary education, as well as to encourage the private sector to participate in the upgrading of Uganda's labor force.

The monthly minimum wage in Uganda is 6,000 Ugandan shillings for all workers. The Ugandan minimum wage was last adjusted on January 1, 1884. In 2015, a new Minimum Wage Bill was introduced in parliament for debate.

Salaries are paid monthly, which is the most prevalent payroll plan in Uganda. However, some companies pay their staff weekly, bimonthly, or semi-monthly.

The resident individual tax rates are set forth in the following table. These rates apply to employment income and taxable business income.

For nonresidents, taxable income, including investment income, is taxed at the rates in the following table.

Annual Leave 

Each employee is entitled to 21 annual leave days per year, with full compensation. An employee may take his or her annual leave at any point in the year, based on the terms agreed with the employer.

The 21 days comprise only working days. For example, if an employee does not regularly work on Saturday and Sunday, those days cannot be included as leave days.

Maternity Leave 

Female staff with a valid contract of services qualifies for 60 days of maternity leave. However, the law does not indicate the minimum period of service to be eligible for maternity leave. In case of a miscarriage, the employee is entitled to at least four weeks of leave in which the employee is entitled to full pay.  

Paternity Leave

Male employees are entitled to four days of paternity leave with full pay.  However, paternity leave applies to an official spouse only. 

Sick Leave

Any employee who has worked for the company for at least one month is eligible for two months of paid sick leave; the first month is fully paid while the second month is unpaid leave.  The employer can terminate the employee's employment contract after the second month of illness if all of the conditions outlined in the employment contract are not met.

To terminate an employment contract, notice must be given in writing and must adhere to the time frames of the employment. 

Notice Period 

The length of the notice period is determined by the following factors:

• If an employee has worked for more than 6 months but less than a year, a two weeks’ notice is required. 
• If an employee has worked for more than 12 months but less than 5 years, they should be given a notice of at least one month.
• If an employee has worked for 5 years but less than 10 years, they should be given a notice of not less than two months. 
• If an employee has worked for more than 10 years, they should be given a three months’ notice.

Severance Pay

In the event of termination or wrongful dismissal, an employee who has worked for at least six months is entitled to severance pay. The employee and the employer are required by law to discuss severance pay. In the absence of such a negotiated agreement, a labor officer may make the decision.