PAYE in Uganda 2026/27 Explained | Resident, Non-Resident & Part-Time Employee (Practical Scenarios)

[00:00:00]The scenario one uh you have employee name you have monthly growth pay uh you are told that David is a non-resident individual in Uganda or other employees are resident individuals in Uganda you are told to determine pay as you earn for resident employees are using previous and current monthly individual rates. This is very very key.

[00:00:42]You are going to use the previous and current monthly individual tax rates.

[00:00:50]Then you are also told to determine the monthly pay as you earn or debit.

[00:00:58]Remember David is a non-resident individual in Uganda. Then next you are told that assume right is the parttime employee and sh 500,000 per month from the part-time job find his monthly pay as you earn in Uganda.

[00:01:28]So this is our practical question that you must really try to master.

[00:01:38]Why do we have the previous and the current monthly individual tax rates?

[00:01:45]It's because when you look at our unments effective 1st July at 2026 actually we have new individual tax rates for resident individuals.

[00:02:06]So it mean that uh if you're dealing with a scenario like this, you will be given uh the previous uh individual tax rates. You'll also be given the current individual tax rates.

[00:02:29]But also in practice you need to be knowing these things. Whether you are an auditor, whether you are a tax consultant, uh whether you a person working with a whether you are an accountant, whether you are a business owner, whether you are a lawyer, you need to really understand that there are some amendment. So you must try to be familiar with these amendments.

[00:03:07]Okay? And I'm going to try my level best to simplify this for you.

[00:03:15]And at the end of this session, you must really be in a position uh to know the impact of these tax amendments.

[00:03:31]Okay. So starting with part A of our scenario where we are told that we determine pay as you earn for resident individuals.

[00:03:43]Remember a resident individual is defined in our income tax act under section 9. Let's start with part A.

[00:03:58]Since we are told that David is a resident individual, it mean that Oscar, Oscar, Jen, James, Jia, Jessica, Joan, and Jo all these are resident individuals.

[00:04:18]David is not a resident individual.

[00:04:21]David is not a resident individual.

[00:04:25]David is not a resident individual.

[00:04:29]So we are looking at before and after before 1st July 2026 and effective first July 2026.

[00:04:40]How do we determine pay as you earn for resident employees?

[00:04:48]You will have a table showing the individual tax rates before 1 July 2026.

[00:05:01]These are the the first column indicates our our bands or our our categories and you always rely on the growth pay.

[00:05:16]You be asking yourself what the man got pay for your worker. Once you know the category he or she belongs then you determine the pay as you earn using the second column that is before 1st July 2026. This is our table. I'm going to explain this in details as we deal with the number. Then effective 1 July 2026 effective 1 July 2026.

[00:06:00]This is our resident individual tax rates.

[00:06:09]This is our resident individual tax rates mean that still you will use the first column to know uh you use your first column basing on the growth pay. Look at the growth pay you're dealing with. Ask yourself what is it category? Where do you find the growth pay?

[00:06:38]So you be asking yourself what the gross pay of this worker that gross pay is in which range. So after knowing the range you will be in a position to determine the pay as you earn.

[00:06:58]Then we also have the nine resident individual tax rates.

[00:07:10]Here is also my table indicating the non resident individual tax rates. If you don't meet the conditions for resident person resident individual in Uganda then we apply the non indiv the non-resident individual rates we'll be asking ourselves what is your growth monthly uh what is your monthly growth Okay.

[00:07:51]After knowing your growth monthly pay, we look for the range. What is where do you belong?

[00:08:00]Okay. So after knowing your range, it will be it will help us or will be in position to really determine the pay as you earn.

[00:08:20]All right.

[00:08:22]All right. So, let's start. Let's start.

[00:08:25]Let's start with Oscar.

[00:08:29]Oscar is a resident individual in Uganda and his monthly growth pay his monthly growth pay is 235,000.

[00:08:48]If we are to determine his pay as you earn using the previous uh monthly individual rates we are going to use this first part first table Oscar Oscar's growth pay is 235,000 every month he earns that is 235,000.

[00:09:27]So basing on our resident individual tax rates before 1 July 2026, you realize that the range or the basis that we are going to use to determine pay as you earn for Oscar is this one.

[00:09:53]This is our basis because Oscar does not earn an amount exceeding 235,000.

[00:10:06]And once we confirm that he belongs to this category, once we confirm that he's brought pay within this category, then we ask ourselves What is the tax rate of people or employees who are belonging this category?

[00:10:37]What is the pay as you earn for a worker whose growth pay is within this category? And you can see that the grow the pay as you earn for people who belong to this category is new. It mean that really a person who does not earn more than 235,000 then there is no pay that is before before 1 July 206.

[00:11:18]So it mean that for us the people who are using Excel uh people who are using Excel assume we are looking at before first July 2026 we are looking at a period before 1st July 2026 fix.

[00:11:50]If we are looking at a period before 1 July 2026, then what is the pay as you earn?

[00:12:00]What the pay as you earn?

[00:12:04]Pay as you earn for Oscar.

[00:12:10]The pay as you earn for Oscar is nil is zero because Oscar does not earn growth pay that exceeds 235.

[00:12:31]But if we are dealing with the period effective first July 28 what 286 if we are looking at the period after 1 July 2020 we are looking at the period after first July 2020 then what will be the pay as you earn for Oscar. We use the second table to determine the pay as you earn for Oscar. When you look at our categories, Oscar earns 235,000 per month. So it mean that his gross pay is within this what is within this range that is not exceeding 330 5,000 he does not earn an amount exceeding 335,000 even Using the current individual tax rate, you can clearly see that there is no pay as you earn for people who earn gross pay not exceeding 335,000.

[00:14:18]Initially it the threshold was what?

[00:14:22]235,000 but now the threshold is 335,000.

[00:14:30]So it mean that any worker any worker in Uganda who does not earn an amount exceeding 335,000 currently he or she uh does not pay pay as you earn.

[00:14:54]the the employer, the boss is not supposed to deduct.

[00:15:00]Pay as you earn.

[00:15:03]The boss is not supposed to deduct or the employer is not supposed to deduct pay as you earn for any worker who does not earn above 335,000 as long as that worker is a resident individual.

[00:15:24]in Uganda. It is a good move. It is really good. It is really good because before 1st July 2026, the threshold was what? 235,000.

[00:15:45]But now the threshold is 335,000.

[00:15:52]So we are done with Oscar.

[00:15:55]It mean that Oscar will not his growth pay is not subject to any pay as you earn before and after.

[00:16:09]So here you have 0 0. Okay. Then let's look at the second worker.

[00:16:16]The second worker is Jen. J earns a a a monthly growth pay of shings 300,000 using the resident individual tax rates before we ask ourselves uh we ask ourselves where can we find the growth pay for Jen.

[00:16:52]Remember, Jen earns a grow a monthly growth pay of 300,000.

[00:16:59]Looking at your first table, this is your first table.

[00:17:04]Looking at our first table, we will be in position to find 300,000 here in this range because 300,000 exceeds 235 but does not exceed 300 35,000.

[00:17:28]That is before July.

[00:17:32]We are look we are dealing with or we are trying to determine the pay as you earn for Jen. Jen's monthly gross pay is 300,000.

[00:17:47]300,000 exceeds 235 but does not exceed 335.

[00:17:57]So it mean that we are using this band we are using this category to determine pay as you earn for Jen. So to determine pay as you earn for Jen we are going to use uh this whereby you are getting the 10% times an amount by which the chargeable income exceeds sh 235,000 and what is that amount that amount is basically the difference the difference and how you determine the difference you simply get the gross pay genus the 235 as that's how we are going to determine the pay as you earn for gen using the previous resident individual tax rates. So using your Excel you can simply do this.

[00:19:13]You simply get put equal sign type 20% times times it is shift then press 8 open bracket growth pay is 300,000 minus 235,000.

[00:19:35]Don't put any comma.

[00:19:39]So when you do that, close bracket and press enter.

[00:19:45]So that is the pay as you earn for Jen before 1st July 2026.

[00:19:53]What about the pay as you earn for Jen using the current individual tax rates?

[00:20:04]Using the current individual tax rates mean that we are going to use our second table.

[00:20:12]This is our second table that has individual tax rates effective first join.

[00:20:20]So we still look at our first column. We ask ourselves where do we find the growth pay for Jen in which category?

[00:20:33]Jen earns a gross pay of SH 300,000.

[00:20:40]300,000 does not exceed 335,000.

[00:20:46]And because the amount does not exceed 335,000, we are told that there is no what? There is no pay as you earn. So it mean that effective 1st July 2026 J pay will not be subject to any pay as you earn.

[00:21:10]Are you seeing that? Are you seeing that? So it means that Jen Jen will be in position itself some money.

[00:21:21]Okay. the impact or the amount saved.

[00:21:25]the impact here or you can look at the tax saved you as Jen you will be in a position to save how much look at before minus after you are saving 13,000 that is good money 13,000 you can Buy something at home.

[00:21:57]Okay. You can buy something at home.

[00:22:04]It is better than nothing. You get it is better than nothing.

[00:22:11]Okay.

[00:22:13]Uh let's also move to the next that is gemos. Let's look at gemos. James earns the growth pay of 400,000 per month.

[00:22:32]German earnings a monthly growth pay of 400,000 per month.

[00:22:41]Using the individual tax rates before 1st July 2020 six, we ask ourselves where do we find 400,000?

[00:22:56]Where do we find the 400,000?

[00:23:03]Where do we find the 400,000?

[00:23:06]I use the the first table that is before first July 2026.

[00:23:13]Where do we find using the first column?

[00:23:16]Where do we find the 400,000?

[00:23:21]We find 400,000 within this category.

[00:23:26]That is an amount that exceeds 335,000 but does not exceed 410,000.

[00:23:39]Our 400,000 does not exceed 410.

[00:23:43]So we rely on this category on this band. We rely on this band to determine the pay as you earn.

[00:23:54]And to determine the pay as you earn, you will use this condition.

[00:24:01]You will get a 10,000 pay as you earn will be 10,000 plus the 20% of the difference. And the difference is is get growth pay minus minus what minus the 335,000 the 335,000 that's how we will determine the pay as you earn of gems. To those who are using Excel, simply do this to determine the pay as you earn for Gemos.

[00:24:45]Simply get 10,000.

[00:24:50]Where are we getting 10,000? It is within the law.

[00:24:55]It is within the law. So get 10,000 times 20%.

[00:25:06]So get 10,000 plus 20% times open bracket. The growth pay is 400,000 minus what? When you look at our condition, when you look at our condition, we are told to get the 20% of the amount by which the chargeable income exceeded shrinking 335.

[00:25:39]So we say gross pay minus 330 and 335. Don't put equal signs then press enter.

[00:25:53]Okay. So that's how you are determining pay as you earn. Pay as you earn.

[00:26:03]What about effective first July? If we are to determine pay as you earn or gemos effective first July.

[00:26:14]So it mean that before 1 July growth pay for gems that is 400,000 was subject to pay as you earn of shings 23,000 what about currently effective 1 July 286 let's look at our table we have this level effective 1st July currently that is effective 1st July 26. These are our indiv resident individual tax rates.

[00:26:57]We ask ourselves based on the first column where do we find the growth pay for gems?

[00:27:06]Remember the growth pay for gems is sh 400,000.

[00:27:13]The growth pay for gems is 400,000.

[00:27:17]So where do you find 400,000?

[00:27:22]400,000 exceeds this.

[00:27:26]It exceeds 335.

[00:27:30]But it does not exceed the 410.

[00:27:35]it does not exceed the 410.

[00:27:38]So the 400,000 is within this category.

[00:27:44]Once we confirm the category or your growth pay, we look at our tax rates. It mean that we are going to rely on this to determine your pay as you earn. So it meaning that we are going to get the 20% times the amount by which your chargeable income your chargeable income is growth paid the amount by which the chargeable income exceeding 335.

[00:28:18]So it mean that you're getting the gross pay which is 400,000 minus the 335 for those who are using Excel you can do this we are simply doing this mean that here it will be the 20% time open bracket the 400,000 minus the 335 And and what does that one mean? It mean that here it mean that here uh this person is saving how much?

[00:29:01]Is saving is saving this? He's saving 10,000 in terms of taxes. He's saving 10,000.

[00:29:15]He's paying for some taxes but He not compared it like before.

[00:29:22]His pay as you earn before was 23,000 per month but now his pay as you earn per month is 13,000.

[00:29:34]So technically you are saving 10,000.

[00:29:40]Perfect. Let's look at another. Let's proceed to Junior. Junior earns a monthly gross pay of 450,000.

[00:30:01]Uh when you look at our scenario here, Junior earns a monthly growth pay of 400.

[00:30:12]450,000.

[00:30:21]That's right.

[00:30:23]450,000.

[00:30:26]So before let's look at before using the resident individual tax rates before 1 July 28 we ask ourselves where do we find 450,000 look at your first column this is our first column we ask ourselves where do we find 450,000 in which range in which category? So 450,000 it exceeds 335,000 it also exceeds 410. So we can't rely on this category.

[00:31:20]Let's look at our next category where the amount exceeds 410,000 but does not exceed 10 million. Remember our growth pay is 450.

[00:31:38]450 exceeds 410,000 but does not exceed 10 million.

[00:31:47]So it mean that we are going to use this category to determine pay as you earn or junior. So it mean that pay as you earn or junior will be 25,000 plus 30% of the difference. How do you get the difference? you get the growth peg minus uh this 410 - 410 those who are using Excel simply get uh put equal signs then type 200 type 25,000 plus 30% times open bracket your gross pay is 400 400 450,000 minus the 410 gross and that's what you that's what you get as your growth sorry as your this is what you make as pay as you earn.

[00:33:15]Okay. What about after this is before 1st July? Before 1st July 2026.

[00:33:23]What about for effective 1 July? If my growth pay is if my monthly growth pay is 450 what is pay as you earn effective effective 1st July 2026 so let's look at our second table is here our second table is here effective 1st July 2020 26.

[00:33:58]We ask ourselves where do we find 450,000?

[00:34:05]Where do you find 452?

[00:34:08]It exceeding this.

[00:34:11]Uh here the next category is where the amount exceeded 335 but does not exceed 410. Our 450 exceeds 410. So we can't use this category. Let's look at our next category where the amount exceeds 410,000 but does not exceed 485,000.

[00:34:35]So we have also this category in our what in our new amendments effective 1st July 2026 we have this category don't forget about it this category don't forget about it so you who are earning a growth pay a monthly growth pay that exceeds 410,000 but does not exceed 485,000.

[00:35:11]We use this to determine your pay as you earn. So it mean that we are getting a 15,000 plus 25% time the difference time the difference whereby you're getting lous 400D minus the 400D 10,000.

[00:35:43]So using the Excel using your Excel you can simply get that is effective right we can simply get your 15,000 plus 25% times open bracket gross pay is 410 10 sorry growth pay is 450,000 minus the 410 press enter and get your pay as you earn. So it mean that for junior junior will be saving how much? 37,000 - 25,000.

[00:36:40]So junior will be saving 12,000.

[00:36:47]Okay. So it mean that before 1 July before 1st July 2026 pay as you earn for junior No.

[00:37:40]mean that you're saving for some money.

[00:37:43]Let's proceed. Let's look at who Jessa Jessa when you look at our scenario.

[00:37:53]Jessica earns a monthly growth pay of 1 million.

[00:38:01]Jessica earns a monthly growth pay of 1 million. So let's determine the pay as you earn for Jessica using the previous resident individual tax rate before 1 July before 1 July 2026.

[00:38:22]Ask ourselves where do we find 1 million?

[00:38:28]In our first column, where do we find 1 million? In which range? The amount exceeds 410,000 but does not exceed 10 million.

[00:38:43]So we are looking at a growth pay of 1 million. So 1 million is within this range. 1 million exceeds 410,000 but does not exceed 10 million.

[00:39:00]So it mean that still we are going to use this we are going to use this condition we know that we are going to this condition because 1 million exceeds 410,000 but does not exceed 10 million. So it mean that to determine pay as you earn for Jessica it will be 25,000 plus 30% of the difference the gross pay minus your 410 that's how you determine the pay as you earn for Jessica using Excel you are going to simply uh you are going to simply get the 25,000 plus 30% times open bracket growth pay is 10 mill growth pay is 1 million minus 410 press enter so that is the pay as you earn or Jessica before 1st July coin 6.

[00:40:24]What about effective first July coin 6?

[00:40:31]What about effective first July 26?

[00:40:36]We are going to use our second cable.

[00:40:42]We are going to use our second example.

[00:40:45]Effective first July 2026 effective July 2026.

[00:40:54]Uh this is our resident individual tax rates. Where do we find 1 million using the first column? Where do we find 1 million?

[00:41:05]1 million exceeds 485.

[00:41:10]1 million exceeds 485 but does not exceed 10 million. So we are going to use this category to determine pay as you earn.

[00:41:25]We are going to use this category to determine pay as you earn. So to determine pay as you earn you are going to get uh 300 uh sorry you are going determine pay as you earn you are going to get 33750 750 33,750 plus 30% of the excess you get the growth pay minus 485,000.

[00:42:17]So what will you get here using Excel? This is what you do.

[00:42:26]So here it will be we are looking at this we are still doing his hook Jessica so it will be the 33 33,700 ticket plus 30% of pay as you earn 1 million minus 485,000 485,000 then press enter. So it mean that just will still also set.

[00:43:09]So Jessa will save how much the difference.

[00:43:15]So Jessica will be sending this. Are you seeing that?

[00:43:21]So it mean that before First July 2026 if you were like Jessica mean that you pay as you earn was 200 2,000 but effective first July 2026 your pay as you earn is this one.

[00:43:49]Okay.

[00:43:51]Next, let's look at our next worker. Who is Joan?

[00:44:00]Our next worker is Joan. Okay. Because Joan is a resident individual in Uganda.

[00:44:09]Joan earns a monthly growth pay of shims 8 million.

[00:44:16]So using the previous individual tax rates, using the previous individual tax rates, we ask ourselves where do we find 8 million.

[00:44:33]8 million exceeds 410 but does not exceed 10 million. Okay, remember the gross pay for John uh is the gross pay for John is what is one is 8 million. So, what you're going to do, what you're going to do is simply uh what you're going to do is simply get what?

[00:45:11]Uh you're going to get here 25,000 plus 30% or 30% of the excess. Get the growth pay minus Get the growth pay minus what - 410,000 and that will be your what? That will be your pay as you earn. I repeat for you.

[00:45:44]you get the 25,000 and then plus 30% times open bracket the growth pay which is 8 million minus the 410,000 enter okay then what about now currently currently Currently what you're going to do is to use your next table.

[00:46:24]Uh where do you find 8 million? It is a figure that exceeds 8 485.

[00:46:31]The figure that exceeds 485 but does not exceed 10 million. So still we are going to use this category.

[00:46:40]Still we are going to use this category.

[00:46:43]So it mean that you're going to get 33,750 plus 30% plus 30% of what?

[00:46:56]30% of the growth pay growth pay minus the 480 minus the 425.

[00:47:09]SA and 425 SA. So let's do this using Excel.

[00:47:22]using Excel. What you're going to do is to get the you're going to get 33,750 33,750.

[00:47:41]Then plus 30% of the excess the growth paid minus the 485,000 then press enter I repeat uh for someone who gross pay is 8 million you get 33,000 700 quid plus 30% of the difference that is gross pay minus the 485,000 and what do you what do you get that's what you get mean that you saving how much you are saving this minus So basically that's what you are that's what you are.

[00:48:48]Okay.

[00:48:50]Then next and that is who? John. John's.

[00:48:56]Jones.

[00:49:01]Last. The last one is we are dealing with Jones.

[00:49:10]Johnny's earns a growth pay of shings 15 million.

[00:49:20]John earns a growth pay of shings 15 million.

[00:49:26]So since John since John earns a growth pay of 15 million what you're going to do to determine his previous pay as you earn.

[00:49:40]We are going to ask ourselves where does where where do we actually find 15 million in which category?

[00:49:53]Where do we find 15 million?

[00:49:57]So you find 15 million where losing your first column since the growth pay for Jones is above 10 million.

[00:50:09]Since since the growth pay since the growth pay for Jones is above 10 million we are going to use this category.

[00:50:23]So we first get 25,000 plus 30% of the excess. The excess is 10 mill is 15 million. That is growth pay. Growth pay of Jones.

[00:50:41]Growth pay for Jones is 15 million 15 million. That is the growth pay for Jones. 15 millionUS - - 410 - 410,000 then we add we add because the amount exceeds 10 million we have to add this mean that we need also to add the 10% of the excess 10% times what is the excess 15 million that is the growth pay the growth pay and plus sorry minus minus the excess amount that exceed is 10 million so we say minus 10 million so I want to repeat for you if you realize that the amount exceeds 10 million if you realize that the amount exceeds 10 million you need first to get A. So, how do you get A? You simply get this 25,000 plus 30% 30% time the excess. Excess you're getting the growth pay. The growth pay remember our growth pay is 15 million.

[00:52:13]15 million minus remember growth pay is chargeable income. So - 410,000 - 410,000.

[00:52:26]That's how you get a then plus b. How do you get b? You get 10% time the amount by which the chargeable income chargeable income is gross pay which is 15 million.

[00:52:45]So 15 million minus 10 million and that's how you get B. So using our Excel using our Excel to determine pay as you earn for Jones before 1st July we have to get A plus C B. So we first get a I am going to get 25,000 plus 30% 30% times open bracket the growth pay minus the 410,000 that will be uh let me first open bracket here that will be like my Then plus plus the 10% 10% of the excess 10% of the excess 10% of the growth pay I get the growth pay minus 10 million You have to make sure that you type 10 million very well.

[00:54:16]You close the first bracket, you close the second bracket until you see the black bracket.

[00:54:23]So it mean that you have. So that is your that is your pay as you earn.

[00:54:30]This is the formula this week. But I can repeat for you. Let me repeat for you.

[00:54:37]To get your pay as you earn, someone who earns an amount that is above 10 million, you have to get a + b. A + b. So to do that with equal signs open the first bracket get 25,000 plus 30% of the excess which is the pay the growth pay minus 410,000 close bracket you're closing this then plus B now you're looking at B so since I'm looking at B separate I first open bracket I get 10% times I open bracket to get the excess which is growth pay minus the 10 million close bracket close bracket until you see the black bracket enter. If this if this is confusing you, you can do it. You can first get a also get ben get a + b separate. So a to get a you are getting 25,000 plus.

[00:56:08]So you first put equal sign we get 25,000 plus 30% time open bracket the growth pay the growth pay which is 15 15 million minus 410,000 then press Enter.

[00:56:39]Yes. Enter. That is your A. Then B. B is 10% of the excess growth pay minus 10 million.

[00:56:54]Close bracket. Then press enter. Then add these two to get the total total pay as you earn. Get A + C.

[00:57:05]So that's how you see this figure is the same as same as this.

[00:57:13]So you can first get A then add B.

[00:57:17]First get A then also get B separately then add those two figures together to get the total pay as you earn. Or you can use this formula.

[00:57:28]You can use this formula where you have C10 where you have C10 is your growth pay is your growth pay.

[00:57:41]Okay.

[00:57:42]Okay. Okay. Okay. Okay.

[00:57:49]Okay. So, let's see.

[00:57:55]Let's now look at currency.

[00:57:59]Currently effective 1st July 2026 if someone is earning 15 million if someone is earning 15 million as gross pay as gross pay remember growth pay is different from net pay.

[00:58:18]So if your growth pay is 15 million per month, growth pay is salary plus cash allowances plus other benefits in time.

[00:58:33]If your growth pay is 15 million using using resident individual tax rates effective 1 July 2026 we ask ourselves where do we find our growth pay in the first column our growth pay is 15 million it exceeds what it exceeds 10 million so it means that still I will have first A and I add what I add B. So it mean that also effective first July we are going to do this computation if a figure is above 10 if the growth pay if the monthly growth pay is above 10 million first you get a and how do you get a you get 33,750 plus 30% of the excess excess you're getting growth pay which is 15 million minus the 455,000 there you get a any B to get B you're simply getting 10% times the excess which is the growth pay 15 millionUS 10 million then you add the A + B to get the total.

[01:00:10]So going back at our Excel, going back at our Excel to get my my pay as you earn for John's effective first July, I am going to get I open I I I put equal signs. I open the first bracket and I type 300.

[01:00:35]Okay. I open I put equal signs I open bracket then I type 33,750 plus 30% times open bracket 30% times open bracket the growth pay click on growth minus the 485,000 then close bracket plus now you are looking at B open bracket 10% times open bracket the growth pay 15% minus 10 million close bracket until You see a brack bracket.

[01:01:38]This is the formula that you use where there is C 10 that is your growth 10. Where you see C 10 that is your growth. So press enter.

[01:01:52]I repeat, you simply get simply put equal signs open bracket type 33,750 plus 30% times open bracket click on where you have growth pay minus the 485,400 885,000 is fixed.

[01:02:25]Then close bracket plus open bracket 10% times open bracket uh the growth pay minus 10 million. 10 million is fixed as well.

[01:02:48]then close bracket close bracket until you see a black bracket then press enter. So, so it mean that someone whose gross pay is 15 million effective 1st July 2026 his pay as you earn will be 4.8 4.8 8,000 as pay as you earn. But still you are saving how much? This minus this it mean that you are also still saving some money. You are still saving for some some money there. Okay. It is not all that huge but at least you are saving for some money.

[01:03:38]Okay. What if you want first get A and B then add it together? This is what you're going to do for new rates.

[01:03:50]You can first get A. How do you get A?

[01:03:53]You get 33,750.

[01:03:58]So if you getting A only don't put open bracket. Huh? Simply simply put equal signs then type 33,750 plus 30% time open bracket your growth pay which is 15 million minus 485,000 close bracket press enter then B put equal sign 10% % diamonds opening bracket gross pay is 15 million minus 10 million then close bracket press enter then to get total pay as you earn get a + c plus you'll be in a position to get the same figure you'll be in a position to get the same the same figure.

[01:05:06]Okay. So that's how you determine that's how you determine the pay as you earn before and after before first kinetics and will effectively first connect maybe you never know you never know uh going forward they may do more amendments you never know you never know you never So that's it. That's how you determine the pay as you earn before and after.

[01:05:44]Now going back at our our practical scenario.

[01:05:51]Going back at our practical scenario, we have David who is a non resident.

[01:05:59]We have David Hney, a land resident.

[01:06:07]We have David who is a non resident and we are told to determine his monthly pay as you earn. Remember David the grow the monthly gross pay for David is 2 million and he is a non resident.

[01:06:29]probably he doesn't meet conditions under section 9 of our income tax act.

[01:06:38]He doesn't meet conditions stated under section 9 of our income tax act. So how do we determine pay as you earn for a nonresident employee?

[01:06:56]We are going to use this table.

[01:07:00]We are going to use this table.

[01:07:10]uh someone who is a non resident individual or employee or we are going to use this table to determine his pay as an if you are a non resident if you don't meet conditions stated under section 9 of our income tax act then we use we use this table to determine your pay as you earn like the gross pay for David is 2 million.

[01:07:47]The gross pay for David is 2 million.

[01:07:54]The gross pay for David is 2 million.

[01:07:59]And because the gross pay for David is 2 million, it mean that that figure exceeds That figure exceeds 10 exceeds 410.

[01:08:19]It exceeds 410 but does not but does not but does not exceed but does not exceed shing 10 million.

[01:08:30]Okay. So if you are earning an amount that is above 410 as a non resident but does not exceed 10 million then this is what you do to get your to get your pay as you earn.

[01:08:52]we get 48,400 40 48,500 then we add 30% of the excess that is the growth pay minus 410.

[01:09:18]So in simple terms you're getting 400 48 48,500 plus 30% uh times the gross pay is let's say 2 million then minus 410,000 and that will be the gross pay sorry that will be the pay as you earn for debit that will be the The pay as you earn for David. In simple terms, the pay as you earn pay as you earn for David will be will be we are getting the pay as you earn for David. So now take note that we don't have before and after for non residents.

[01:10:17]We don't have before and after. We don't have that. It is still the same. It is still the same. So the the the pay as you earn for David uh let me put here David.

[01:10:34]David is a non resident.

[01:10:38]This is none.

[01:10:40]His gross pay is 2 million.

[01:10:46]To determine his pay as you earn, you simply get the 48,500 then plus 30% of the excess 2, - 400 410,000 close bracket and press enter. So this is the same uh before and after it is the same because current amendments the we don't have any amendment regarding non-resident individuals.

[01:11:33]The only amendment we have is for resident individuals.

[01:11:40]resident individual tax rates.

[01:11:44]But for non individ for non for non resident individualates they are still the same. They are still the same. So it mean that those who were earning let's say 2 million the pay as you earn was this and even now effecting past life is still the same going forward going forward. So for you for non residents they will not be saving anything for non residents the the impact is only on resident individuals.

[01:12:24]So for n for for non residents we always use this table.

[01:12:31]We'll use this table. We use this table.

[01:12:35]We use this for nonres for non-resident individuals.

[01:12:42]Okay, I think we are done with that. We are done with pay as you earn for debit.

[01:12:51]Finally, we are told that assume we are told that assume blight is a part time employee and earns sh 500,000 per month from the parttime job. Determine his monthly pay as you earn in Uganda.

[01:13:15]Let's look at part C.

[01:13:18]Part C is looking at secondary employment where you have more than one job, you need to declare in Uganda in a scenario where you are working with more than one company, with more than one employer.

[01:13:49]Then you'll always need scale one employer.

[01:13:53]Treat you as treat your treat your income your earning as primary employment.

[01:14:07]Okay.

[01:14:09]You will need to declare you tell your employer that you are my main employer.

[01:14:16]So if employer A is your main if your employer A is your main employer it's you to decide not you are a not government it's you to decide say that this is my what this is my main this is my main employer so if you if you state that employer A is your main employer then he will be treating you uh at the time of deducting your pay as you earn.

[01:14:55]will be treating you as if you are under the primary employment and he will be using normal rates.

[01:15:05]No more individual nor individual rates like what like these rates that you are used in those are normal individual rates to determine the pay as you earn to use the normal individual tax rates. If you tell your employer that if you tell that company that you see my you the company yes I have two jobs but you are my main employer. So that company will be selecting at the time of deducting your pay as you earn they will be selecting primary employment. Then where you are a part-timer maybe you have employer employer B and employer C maybe you are working in three companies.

[01:16:04]So here you are a part time.

[01:16:14]Uh then here also part time.

[01:16:20]So these ones employer B and employer C will be treating will be selecting what?

[01:16:27]We'll be selecting secondary secondary employment secondary employment.

[01:16:35]We'll be selecting secondary employment to determine your pay as you earn.

[01:16:43]All of them will be selecting secondary employment to determine your pay as you earn. Okay. But the employer A employer A will be selecting the primary employment and will be using individual individual uh tax rates. Now for secondary employment we use rich rate.

[01:17:11]When you look at how our revenue authority uh is uh is treating secondary employment.

[01:17:26]uh they are simply getting 40% time what time your growth pay your growth pay to get pay as you earn.

[01:17:43]If you select secondary employment then pay as you earn will be 40% of the growth pay.

[01:17:56]So it mean that a person like who? A person like this one, a person like this one, a person like who who is our like bright who is a who is a part-time employee his monthly pay as you earn in Uganda will be 40% of this money.

[01:18:21]That's how you are a zip treating secondary employment. So it mean that for for for bright it mean that for bright for bright uh pay as you earn pay as you earn it is 40 40%.

[01:18:43]40% time what time growth pay which is 500,000.

[01:18:50]So your your pay as your earning will be this.

[01:19:04]That is your pay as you earn.

[01:19:07]So that's how you determine pay as you earn for for for part-time employee. Currently UR is treating secondary employment actually current is charging 40% for all secondary employment 40% of the growth but before I think this came into effect May you are filing your return for Apo so those who filed in May those who were filing uh uh return pay returns for April in May you realize that there was some changes but before the rate used to be 30 30%.

[01:20:08]Okay, I hope you pick this clearly.

[01:20:12]This is as per the return uh pay per pay returns.

[01:20:20]If you select secondary employment currently, if you select secondary employment when you're filing per year returns, if you select secondary employment for your workers, the rate will be 40%.

[01:20:38]That was the effective that was actually effective in uh May when you are filing this was in May in May while filing while filing the April returns.

[01:21:00]So, so I believe here it's maybe in future you never know you never know I I can't really conclude but the inter it could be on the issue of interpretation interpretation of the but I can as I said I can't conclude the issue could be on interpretation of the maybe uh yes They there was a notice there was a notice there was a notice issued by the commissioner general. There was a notice issued by the commissioner general regarding this. But obviously now uh maybe the law makers uh what was the intention of what was the intention? What was the intention of of this around secondary employment?

[01:22:02]Was it that every person?

[01:22:07]Because we also need to understand what was the intention when you look at our when when you look at our about secondary employment was the intention that every person category subjects 40% for primary employment category you realize that 40% 40% applies is Henry.

[01:22:40]Henry in a scenario in a scenario in a scenario where where an individual where an individual where an individual earns more than 10 year that is for for those who who belong to primary employment category.

[01:23:21]uh but uh of course here really really it really depends on the interpretation of the role and the reason behind uh secondary employment.

[01:23:37]If indeed if indeed every person who is in second employment category is subject to 40% as pay as you earn I really don't know but it is this is punishing this is punishing people who are in secondary employment it's like you're punishing them just imagine someone who earns uh 100 in his part-time job.

[01:24:11]Remember, in his part-time job, he's earning only what the growth pay.

[01:24:19]If the growth pay is let's say 100,000 from the secondary employment it mean that you're charging that person 40 40%.

[01:24:35]And is left with how much?

[01:24:38]40% time 100 that is pay as you earn. So is the before you talk about to NSS before you talk about to before you talk about any other deduction you will be left with 6,000 rather 60,000 before you remove any other deduction like NSSF like any other compulsory saving depending on where he is working from.

[01:25:11]So you really think you really think that it is like punishing these people who are who have the secondary who are in the secondary employment category.

[01:25:23]But it if it is if it is how it is then maybe in the future we will see also we will see also an amendment around secondary employment because really it is too much.

[01:25:40]It is really too much. If you say every individual in secondary employment should be subject to 40% then it is tricky.

[01:25:53]You are really punishing.

[01:25:56]You are really like discouraging people to part time.

[01:26:02]Okay.

[01:26:03]You are really saying that people should focus on only what? only primary employment 40% is really too high. Okay. To the extent that even a person who is earning 5,000 you take 40% of his you take 40% of his gross pay. There is no threshold.

[01:26:32]Okay. I understand from the perspective of administration, from the perspective of administration, I understand that at times it is hard for the revenue authority to know that this is a this person is in an employment is is in primary employment or secondary employment. when the when the when the when the employer has not declared in the right way from administr administration's perspective there are issues I understand especially in terms of declaration in terms of declaration I understand you may find that it is becoming tricky for the revenue authority for the revenue authority to really know that these ones are these ones fall under the category of above 10 million or these ones are in secondary employment.

[01:27:54]Yeah, it takes really it takes too much analysis. You have really to give the gift analyze almost every every what every every employee team to determine because here without analyzing every employees team it will be tricky for you to know that these ones are in secondary employment these ones but there is always a way there is always a way uh there is always a way but really shouldn't be something to penalize to penalize. What? There are some measures that can put in place uh to to trace people who are in secondary employment and how much they are they earning in their primary employment.

[01:28:44]How much are they earning in their primary employment?

[01:28:50]But it should be not something you punish almost everyone but the issue could be on administration from the revenue authority.

[01:29:03]Administering that that secondary employment is not all that easy. It's not all that easy but there is always a way and things can and also if the law is clear if the law is clear we hope that maybe uh also it could be from the we can maybe there could be people who are going to take it up to up to the court leveling that not every it could be that there could be people who are going to add that not every individual in secondary employment category is subject 40% as per the could be those people who are going also to really argue with up to up to high court up to court of appeal or supreme court or until we seek a new law but it is something that really we need to look as tax practitioners, as law makers.

[01:30:14]Uh because really if you say that every person in in secondary employment is subject 40% you are you are punishing even those low earners.

[01:30:29]You are really punishing even those low earners to the extent that even if someone is earning 1,000 as growth pay you take 40% which is really doesn't make sense.

[01:30:43]There should be some threshold maybe in the future maybe we can see how to phrase it well and not punishing people who have secondary who are in the secondary employment category. I believe I have been in a position uh to uh to respond all those questions. In case you have a question, uh feel free to let me know. Feel free to let me know and we can keep the conversation going. We can keep uh we can keep really the discussion on.

[01:31:27]Okay. But regarding secondary employment, I can't really conclude. But how it is now is that whoever is in secondary whoever is in secondary employment category his growth or her growth pay is subject 40%.

[01:31:50]As per the UR as per the UR returns template as per the UR template however in case you select the secondary employment the rate is directly and there is no way you can change it. Maybe you pay less taxes, but if you select the moment you select secondary employment, the rate is 14.

[01:32:22]And this was this came into effect around what?

[01:32:28]Around around what? When you when you were filing returns for May, sorry, when you were filing returns for April, that was in May.

[01:32:41]that was in May those returns for Maying return.

[01:32:51]Yeah. So that's it guys. So that's it regarding whether it is 30% whether it is 40%.

[01:32:59]that argument can continue. And how best how best can maybe other other policy consideration that how best can we how best how best can government how best can government tax secondary secondary employment Maybe it is something that we need to keep on discussing uh to keep on discussing.

[01:33:39]Okay. Of course, whenever you bring a role, you need to look at it in terms of how also that role you're putting in place. Is it easy to implement?

[01:33:49]Is it easy to implement?

[01:33:53]uh as you as we suggest what uh the ways government can tax secondary employment.

[01:34:03]Also think about the impact to the economy.

[01:34:08]Think about the people who are going to implement the role among others among among others. But we shouldn't really punish workers because at the end of it all when you earn you're going to you're going to invest that money you're going to consume at the end of it all on your consumption government is going to take some money VAT excise v so government you will collect money let people have money at times you may need to let people have money in their pocket and ded them on the on other taxes, not these direct taxes. Have those indirect taxes because those guys are going to consume so you can have them. That's really employment is becoming really problem. Uh taxes are really still too high too high.

[01:35:13]But that is the issue for the government to our law makers. Otherwise guys, thank you for following and let's keep in touch.

[01:35:26]Stay blessed.