Employer of Record in Uganda

An Employer of Record (EOR) in Uganda is a company that legally hires employees on your behalf. This means you can build a team in Uganda without setting up a local entity. The EOR handles all the legal and HR tasks, like payroll, taxes, and benefits. You manage your team's day to day work, while the EOR takes care of the employment paperwork. For companies looking to hire in Uganda, an EOR like Rivermate can simplify the process.

How an Employer of Record (EOR) Works in Uganda

Using an EOR in Uganda follows a straightforward process. Here is how it generally works:

1. You Find the Talent: You identify the person you want to hire in Uganda.
2. The EOR Hires Them: The EOR legally employs the individual under their local Ugandan entity. They create a compliant employment contract.
3. Onboarding: The EOR manages the onboarding process, making sure all necessary paperwork is completed according to Ugandan law.
4. Payroll and Benefits: The EOR processes payroll, deducts taxes like Pay As You Earn (PAYE), and handles social security contributions to the National Social Security Fund (NSSF).
5. Ongoing HR Support: The EOR provides ongoing HR support and ensures compliance with Ugandan labor laws, which can change over time.
6. You Manage the Work: You direct your employee's daily tasks and responsibilities, just as you would with any other team member.

Benefits of Using an EOR for Hiring in Uganda

Using an EOR to hire in Uganda offers several advantages. It allows you to enter the market and build a team quickly and efficiently. You can focus on your business goals while the EOR handles the complexities of local employment laws.

• Faster Market Entry: You can hire employees in Uganda without the lengthy process of establishing a legal entity in the country.
• Reduced Risk: The EOR takes on the responsibility for compliance with Uganda's employment and tax laws, reducing your legal risks.
• Cost Savings: Setting up a local company can be expensive. An EOR eliminates these upfront costs.
• Simplified Operations: You can avoid the administrative burden of managing payroll, benefits, and HR in a new country.
• Access to Expertise: EORs have local knowledge of Ugandan labor laws and regulations, ensuring you stay compliant.

Rivermate's transparent pricing model eliminates complexity with a single, competitive monthly fee per employee. Unlike traditional PEO providers, our pricing in Uganda includes comprehensive HR support, benefits administration, compliance management, and access to our proprietary dashboard for real-time workforce analytics. No hidden costs, no setup fees—just straightforward pricing that scales with your business needs while ensuring full legal compliance in Uganda.

Hiring in Uganda offers a chance to tap into a growing workforce. To do it right, you need to understand the local labor laws. This means setting up a legal entity in the country and registering with the Uganda Revenue Authority. Or, you can partner with an Employer of Record (EOR) to handle the legal requirements for you. An EOR allows you to hire in Uganda without establishing a local entity.

Employment contracts & must-have clauses

In Uganda, you can have oral or written employment contracts. However, a written contract is always better for clarity. For any employment lasting six months or more, a written contract is required.

There are two main types of contracts:

• Fixed-term: These contracts have a specific end date.
• Indefinite: These contracts are ongoing until terminated by either you or the employee.

Your employment contracts must include these key clauses:

Probation periods

You can include a probation period in your employment contracts to assess a new employee's suitability.

• The maximum initial probation period is six months.
• You can extend it for up to another six months, but you need the employee's agreement.
• During probation, either you or the employee can terminate the contract with at least 14 days' notice. You can also pay seven days' wages instead of notice.

Working hours & overtime

Standard working hours in Uganda are straightforward.

• Standard hours: 8 hours per day and 48 hours per week.
• Overtime: Anything beyond the standard hours is overtime. The maximum total hours, including overtime, should not exceed 10 hours a day or 56 hours a week.
• Overtime pay: You must pay 1.5 times the normal hourly rate for overtime on regular workdays. For public holidays, the rate is double the normal hourly rate.

Public & regional holidays

Employees in Uganda are entitled to paid public holidays. There are approximately 14 nationally recognized public holidays.

Here are some of the main public holidays in Uganda:

• New Year's Day (January 1)
• NRM Liberation Day (January 26)
• International Women's Day (March 8)
• Good Friday
• Easter Monday
• Labour Day (May 1)
• Martyrs' Day (June 3)
• National Heroes' Day (June 9)
• Independence Day (October 9)
• Christmas Day (December 25)
• Boxing Day (December 26)
• Eid al-Fitr (variable date)
• Eid al-Adha (variable date)

Hiring contractors in Uganda

You can hire independent contractors in Uganda for project-based or specialized work. This can offer flexibility and access to specific skills without the commitments of full-time employment.

However, it is crucial to classify workers correctly. Misclassifying an employee as an independent contractor can lead to penalties, back taxes, and legal issues. The Uganda Revenue Authority investigates misclassification to ensure tax compliance.

An EOR can help you mitigate this risk. They can help you understand the legal distinctions between employees and contractors in Uganda. By partnering with an EOR, you can ensure you are classifying your workers correctly and complying with all local labor laws. This allows you to focus on your business goals without worrying about compliance risks.

Paying your team in Uganda involves understanding the local rules for compensation and payroll. You need to follow Ugandan employment laws to avoid penalties and ensure your employees are paid correctly and on time. This means getting familiar with the country's wage structures, tax regulations, and social security contributions.

Payroll cycles & wage structure

In Uganda, the payroll process follows a monthly cycle. You should establish a clear payment schedule and ensure you have accurate records for all your employees. A typical workweek is 48 hours, spread over eight hours per day.

Your wage structure should be competitive to attract and retain talent. While there is a national minimum wage, it's important to offer compensation that reflects the cost of living and the skills you need.

Overtime & minimums

Uganda's minimum wage is 6,000 Ugandan shillings per month, a rate that has been in place for many years. However, some sources indicate a newer, higher figure of 130,000 Ugandan shillings per month, so it's important to verify the current requirement.

Overtime is paid at a higher rate. Here are the key points:

• Work beyond the standard 8-hour day should not exceed 10 hours a day.
• Overtime pay is one and a half times the normal rate.
• If an employee works on a public holiday, the pay is double the normal rate.

Employer taxes and contributions

As an employer in Uganda, you are responsible for contributing to the National Social Security Fund (NSSF) for your employees.

Employee taxes and deductions

Employees in Uganda also contribute to the NSSF and pay income tax. The income tax is progressive, meaning the rate increases with the employee's income.

Here is a breakdown of the annual income tax rates for residents:

In Uganda, providing the right benefits and leave is key to attracting and keeping great talent. It’s not just about what’s required by law. It’s about creating a supportive work environment. Understanding these standards helps you stay competitive and compliant.

Statutory leave

Ugandan law sets minimum leave requirements for all employees.

• Annual Leave: You must provide employees with 21 paid vacation days each year. This leave accrues at a rate of seven days for every four months of continuous work.
• Sick Leave: Employees are entitled to one month of sick leave at full pay. After the first month, they can take a second month of unpaid sick leave. An employer can request a medical certificate as proof of illness.
• Maternity Leave: Female employees get 60 working days of fully paid maternity leave. At least four of these weeks should be taken after the birth.
• Paternity Leave: Male employees receive four paid days of paternity leave following the birth of a child.

Public holidays & regional holidays

Employees are entitled to a paid day off for public holidays. If they are required to work, you must provide them with an extra day off in lieu.

Note: Some religious holiday dates are tentative and may change.

Typical supplemental benefits

A strong benefits package includes both legally required benefits and additional perks that make your company an attractive place to work.

How an EOR can help with setting up benefits

Setting up a compliant benefits plan in a new country can be complex. An Employer of Record (EOR) simplifies this process for you.

An EOR already has a legal entity in Uganda, so you don't have to spend months setting one up yourself. We handle the administration of all statutory benefits, ensuring you comply with local labor laws from day one. We can also advise on and manage supplemental benefits that are competitive in the local market. This saves you time, reduces risk, and helps you attract top talent in Uganda.

When an employment relationship in Uganda ends, you need to follow a clear process. This involves giving proper notice, understanding when to provide severance pay, and ensuring all final payments are made correctly. The process protects both you and your employee by ensuring you meet all legal requirements. Failing to follow these rules can lead to claims of wrongful dismissal.

Notice periods

In Uganda, the law sets minimum notice periods for ending an employment contract. The length of the notice depends on how long the employee has worked for you. You must provide the notice in writing.

Here are the minimum notice periods:

You can also choose to pay the employee their salary for the notice period instead of having them work. This is called payment in lieu of notice.

Severance pay

You must pay severance to an employee who has worked for you for six months or more. This payment is due when you terminate their contract. However, you do not have to pay severance if you dismiss the employee for serious misconduct. The law does not set a specific amount for severance pay. Instead, it is typically negotiated between you, the employee, and any applicable labor union.

How Rivermate handles compliant exits

When you use an Employer of Record like Rivermate, we manage the entire offboarding process for you. We make sure every step is compliant with Ugandan employment law.

Here’s how we help:

• Guidance on termination: We advise you on the correct grounds for termination to avoid wrongful dismissal claims.
• Notice period management: We ensure you give the correct notice period or payment in lieu of notice.
• Severance pay calculation: We help you negotiate and calculate the appropriate severance allowance.
• Final pay: We handle the final payment to the employee, ensuring it includes all outstanding wages and benefits within seven days of termination.
• Documentation: We prepare all necessary termination documents to keep you compliant.

We handle the complexities so you can focus on your business.

Navigating Uganda's visa and work permit system is straightforward when you understand the requirements. To work in the country, you need the correct legal authorization. The main government body that manages this process is the Directorate of Citizenship and Immigration Control (DCIC). For most foreign professionals, the journey begins with an entry visa, followed by an application for a work permit once you are in the country. Your employer plays a key role in this process by sponsoring your application.

Employment visas & sponsorship realities

An Employer of Record (EOR) can sponsor work permits for foreign employees in Uganda. This is a practical route if your company doesn't have a legal entity in the country. The EOR acts as the legal employer and manages all the necessary immigration and employment responsibilities.

Here’s what you need to know about sponsorship:

• Local Entity Required: The sponsoring company, whether it's your direct employer or an EOR, must be a legally registered business in Uganda.
• Justification is Key: The employer must provide a cover letter explaining why a foreign national is needed for the role. This usually involves demonstrating that the required skills are not easily found in the local workforce.
• EOR Can Handle the Process: A compliant EOR can manage the entire work permit application, including renewals and ensuring everything aligns with Ugandan immigration and labor laws.

The most common work permit for foreign employees is the Class G permit. To be eligible, you must have a job offer from a registered company in Uganda and possess qualifications that are in demand.

The application process is typically done online through the DCIC portal. Your sponsoring employer will initiate the application and submit the required documents.

Required Documents for a Work Permit Application:

• Completed application form
• Valid passport with at least six months of validity
• Passport-sized photos
• Cover letter from your employer
• Employment contract
• Your academic qualifications and CV
• Police clearance certificate from your home country

Business travel compliance

For short-term business trips, you do not need a full work permit. Instead, you can travel on a business visa or a special pass. These are designed for activities like attending meetings, conferences, or short training sessions.

Here are the typical options for short-term visits:

It is illegal to engage in paid work on a standard tourist visa. Always ensure you have the correct authorization for your activities in Uganda to remain compliant with immigration laws. The application for these short-term options is also typically handled through the online immigration portal.