Uganda Bonus Tax Calculator

What Is a Bonus?

A bonus is a lump sum an employer pays on top of your regular salary, such as a year-end bonus, a performance bonus, or a thirteenth-month payment. Like other one-off amounts, it is not part of your normal monthly pay and is usually received once a year.

Is a Bonus Taxed in Uganda?

Yes. A bonus is taxable employment income under Section 19 of the Income Tax Act, the same as your salary. It is added to your income and PAYE is charged on it.

How the Tax Is Worked Out

A bonus is a one-off lump sum, so it is not taxed like a single month's pay, which would push it straight to the top rate. Instead URA uses the annualised method: your bonus is added on top of your annual salary, and the tax is charged at the PAYE bands that sit above your regular income.

• Annualise your regular pay: monthly salary times 12.
• Work out the annual PAYE on that salary alone.
• Work out the annual PAYE on your salary plus the bonus.
• The difference between the two is the tax on your bonus.

Note that if your employer taxes the whole bonus within the single month it is paid, the deduction can be larger than this annualised figure. The amount shown here is the correct tax on the bonus for the year.

Worked Example

Take someone earning UGX 1,000,000 a month (UGX 12,000,000 a year) who receives a UGX 2,000,000 bonus. Their annual PAYE without the bonus is UGX 2,259,000; with the bonus added it is UGX 2,859,000. The difference, UGX 600,000, is the tax on the bonus, leaving a net bonus of UGX 1,400,000. Because their salary already sits in the 30% band, the whole bonus is taxed at 30%.