Uganda Gratuity Calculator
See the PAYE tax on your gratuity and exactly what you take home.
Gratuity paid on termination or end of contract is taxable. Amounts paid into an approved retirement scheme are treated as pension and are exempt.
Your gratuity, after tax
Enter your salary and gratuity amount to see the PAYE due and what you take home.
What Is Gratuity?
Gratuity is a lump sum paid to an employee on top of their regular salary, usually at the end of a fixed-term contract or when leaving service. Unlike your monthly pay, it is a one-off amount. How much you receive is set by your employment contract, commonly a percentage of your salary for each completed year of service (for example 25% or 30% a year), or a fixed number of months' pay per year.
Is Gratuity Taxed in Uganda?
Yes. Gratuity is taxable employment income under Section 19 of the Income Tax Act, however long you have served. A normal contract or end-of-service gratuity paid directly to you is taxable, and that is what this calculator assumes.
How the Tax Is Worked Out
A gratuity 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 gratuity 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 gratuity.
- The difference between the two is the tax on your gratuity.
Worked Example
Take someone earning UGX 1,500,000 a month (UGX 18,000,000 a year) who receives a UGX 5,000,000 gratuity. Their annual PAYE without the gratuity is UGX 4,059,000; with the gratuity added it is UGX 5,559,000. The difference, UGX 1,500,000, is the tax on the gratuity, leaving a net gratuity of UGX 3,500,000. Because their salary already sits in the 30% band, the whole gratuity is taxed at 30%.