Employee Benefits and Compensation in Uganda: Comprehensive Guide

What Are Employee Benefits?

Employee benefits refer to the compensation package that a business organization offers to an employee in compliance with the terms and conditions of the employment contract. The compensation and benefits in Uganda include health insurance, medical insurance, maternity benefits, compensation to the family for death during service, disability benefits, retirement compensation, and more.

A company offers employee benefits in Uganda to attract more employees, retain existing employees, and enhance employee engagement and productivity. An adequate compensation and benefits policy in Uganda helps save costs as the employer successfully retains high-performing employees without investing in exorbitant salary hikes.

A generous compensation package in Uganda ensures job satisfaction, improved productivity, work-life balance, and improved employee health and wellness.

Compensation Laws in Uganda

 The benefits and compensation policy in Uganda after considering the country’s labor law and employment act. Here are a few compensation laws that employers need to take care of:

• As per Ugandan Employment Act Part V Article 40, employers must mandatorily pay employees for the number of days they have worked.
• Employees are entitled to fixed working hours as per the employment contract. 
• Employers must provide paid annual leaves of up to seven days per the employment act Part VI.
• Female employees are entitled to get maternity leaves on total wages.

How to Design an Employee Benefits Program for Employees in Uganda

The employee benefits program has to comply with the compensation and benefits policy in Uganda. The guidelines below can help create an employee benefits program:

Chalk out the business objectives

• Keep the profitability of your business organization in mind while preparing the compensation and benefits policy in Uganda. 
• Focus on areas where an employee may need the employer’s support. 
• The compensation package in Uganda mandatorily includes maternity benefits, paternal benefits, annual leave benefits, and medical benefits for employees in Uganda.

Fix a budget

• Keep the company’s financial constraints in mind while laying out an employee leave benefits plan. 
• Set a budget and prioritize the allocation of funds based on the urgency of the leave benefit for the employee. 

Analyze the employee requirements

• Meeting with the employees to discuss their needs helps plan the compensation package in Uganda more efficiently. 
• Roll out a survey to gather information about leave benefit requirements from the employees. 
• Obtaining feedback from the employees helps in the creation of a fair compensation and benefits policy in Uganda.

Design an employee benefits policy

• Once everything is decided, you can create a flexible employee benefits plan. 
• You can consider the market standard and the employee requirements for a practical and attractive benefits package.

Share the plan with the employees

• Share the final drafted policy of leave benefits in Uganda with the employees. 
• Apart from providing employees with mandatory employee benefits insurance in Uganda, companies can also conduct seminars to spread awareness about mental health, work-life balance, the flexibility of working from home or office, and other non-fiscal arrangements.

Upgrade the plan periodically

• The compensation package in Uganda is not set in stone. Changes need to be made to the policy periodically to maintain consistency with the developments and goals of the company. 
• Upgrade the compensation and benefits policy in Uganda according to the changing business objectives and try to provide more benefits to the employees with an increase in profitability of the organization.

Types of Guaranteed Benefits in Uganda

Companies entitle employees to a host of benefits according to the compensation and benefits policy in Uganda. The guaranteed employee benefits in Uganda are given below:

• Maternity leave: The compensation structure in Uganda entitles pregnant employees to 60 days of paid maternity leave. Companies offer a paid leave of at least four weeks following delivery of the child or miscarriage according to the employee compensation policy of Uganda.
• Annual leave: Uganda’s compensation and benefits policy entitles the employees to a paid leave of seven days every year for every four months of continuous service. The annual leave does not include public holidays and other leave benefits in Uganda.
• Paternity leave: Uganda’s employee compensation and benefits include paid paternity leave. Fathers of newborns are entitled to paternity leave benefits in Uganda, including four days of leave following childbirth or miscarriage of their partners.
• Sick leave: According to the compensation and benefits policy in Uganda, employees have to work continuously for at least a month to avail of paid sick leave benefits in Uganda. Every employee is entitled to a paid sick leave of one month. If the employee continues to be unwell and unfit for work even after a month, the employer may terminate the employee.  
• Working hours: In Uganda, employees are entitled to work 48 hours a week and 8 hours daily.  

Employee Benefits for Expatriates

Apart from the guaranteed benefits, companies provide a handful of additional benefits to expatriates according to the compensation structure in Uganda. The additional fringe benefits for ex-pat employees in Uganda are mentioned below:

• Free enrolment in language training courses
• Benefits of relocation
• Benefits for spouse and family members
• Benefits of accommodation

How Are Employee Benefits Taxed in Uganda?

Employees who have lived in Uganda and worked in the companies for over 183 days are charged local taxes according to the compensation and benefits policy in Uganda. According to Uganda’s employee benefits policy, employees must pay taxes instead of income, commissions, bonuses, gratuity, leave pay, and other benefits. No income tax is imposed upon the pension after the employee’s retirement.

According to the compensation package in Uganda, fringe benefits are subject to PAYE taxes. However, the benefits that cannot be encashed are not subject to taxes. According to the policy of employee benefits insurance in Uganda, the employer and employee contributions to the National Social Security Fund are 10% and 5%, respectively.

Restrictions for Uganda Benefits and Compensation

Before deciding on what benefits and compensation to provide employees, employers must register the company with relevant authorities. It should be registered with Uganda Registration Services Bureau (URSB) and Uganda Revenue Authority (URA) and obtain relevant licenses. 

In addition, employers are entitled to provide a minimum wage to employees. It is also mandatory to make statutory deductions such as National Social Security Fund (NSSF), income tax, etc. 

Supplemental Benefits for Employees in Uganda

The compensation package in Uganda includes a host of supplemental benefits for employees. Companies may offer the following supplemental employee compensation and benefits in Uganda:

• A fixed amount of school fees benefits for children of the employees every year
• Holiday bonus in December
• Monthly benefits of a fixed amount to cover transportation costs to and from work
• Benefits to cover mobile phone calls and internet usage based on the location and job role of the user

How Multiplier Can Help with Benefits Management in Uganda

Multiplier is a global EOR platform serving 150+ countries. We offer services to employ talent in several countries without setting up a subsidiary. You can use the expertise of our professionals to hire, onboard, and set up teams in new countries. You can use this time to explore various markets and attract affordable talent worldwide.