Comprehensive Guide to Hiring Employees in Uganda

With a population of nearly 40 million, Uganda is a nation in East Africa boasting a literacy rate of 79.00%. Companies can hire in Uganda and benefit from its skilled and talented workforce.

While hiring in Uganda, employers must abide by the country’s labor laws, which outline the minimum requirements for employment contracts, working conditions, pay, and benefits. Also, comprehending cultural norms related to gender roles, language, and religion can assist employers in finding the ideal employees for their respective companies.

Learn about recruitment and selection in Uganda and how to manage Ugandan employment laws to create a dynamic workforce.

Things to Know Before Hiring in Uganda

Following are the details you should knowe to hire employees in Uganda, including payroll, benefits, tax and labor law, compliance and more.

Working hours and overtime

• The maximum number of hours employees may work each week is 48 hours, and the average is eight hours per day.
• The working hours should not exceed nine hours daily, considering lunch and prayer breaks.
• While hiring in Uganda, working overtime is permitted as long as the working hours, including overtime, do not exceed ten hours per day or fifty-six hours per week.
• When there is no formal agreement, overtime hours are worked more than eight hours per day or 48 hours per week.
• The employees must be paid at a minimum rate of one and a half times the regular hourly rate if they work on regular working days and two times the regular hourly rate if they work on officially designated public holidays.

Probationary and notice period

The hiring process in Uganda includes a maximum probationary period of six months.

According to the employee’s tenure, the necessary notice period is as follows:

Employment termination

• In Uganda, a minimum of one month’s gross salary from the employee’s termination date of employment must be paid as severance pay for each year of service.

Paid annual leave

• At 12 months of continuous service completion, employees are entitled to 21 working days of paid annual leave. This applies only if the employee has worked at least 16 hours per week with the same employer.
• The annual leaves are provided at the rate of seven days for every four consecutive months of service.
• The parties must agree on the date of the annual leave.

Sick leave

• According to the Employment Act of 2006, an employee who works at least 16 hours per week is entitled to sick leave after one month.
• Employees get the first month with full compensation and the second month without pay in any given calendar year.

Maternity and paternity leave

• According to Ugandan law, a woman employee has the right to take maternity leave.
• The length of this leave is 60 working days. The recovery phase during the maternity leave must last at least 4 weeks.
• A male employee is entitled to 4 working days of paid paternity leave each year following the birth of a child or the miscarriage of a wife.

Social Security

• In Uganda, a person in employment must pay into the national social security fund 5% of their gross income.
• Employers must contribute 10% of each employee’s gross wage to the national social security fund.

VAT

• In addition, taxable supplies made by taxable individuals, the importation of products other than exempt imports, and the importation of services by anybody are all subject to VAT.
• Certain things are zero-rated, while others are exempt, and the normal VAT rate is 18%.

The Cost of Hiring an Employee in Uganda

The hiring process in Uganda entails the usual costs, and it may vary depending on your desired degree of employment and the industry. The following are the recruitment fees in Uganda:

• Job listings (sponsored advertisements)
• Expenditures of time and money on reviewing company taxes
• Benefits under the law
• Additional secondary benefits
• Payroll expenses
• Salaries
• Training costs

What Does a Company Need to Hire Employees in Uganda?

The government of Uganda has established several legal requirements to hire staff in Uganda successfully. Before beginning any recruitment process in Uganda, a company must create a legal entity. A joint venture, partnership, private or public corporation, or subsidiary are all options.

A company should also receive a Tax Identification Number (TIN) and register with the Uganda Revenue Authority (URA) for all tax matter concerns. Also,  under section 117 (b) of the Companies Act 2012, it’s mandatory to have a company seal.

It is also mandatory to adhere to Ugandan labor laws and consider signing up with NSSF.

Various Options for Hiring Employees in Uganda?

An employer can often undertake recruitment and selection in Uganda in one of two ways:

• Establishing an in-house team: A company must establish a presence in Uganda before hiring locals. Thereafter, set up an in-house HR team to conduct your company’s recruitment process. However, the hiring process in Uganda through an in-house team takes much effort and resources.
• Using EORs: Working through an Employer of Record (EOR) might be advantageous for businesses looking to hire in Uganda without a physical presence.

The Steps to Hiring in Uganda

The steps a company could take to conduct a smooth hiring process in Uganda are as follows:

• Step 1: The company must identify the position and create a detailed job description explaining the duties, skills, and experience needed for the given position.
• Step 2: To reach potential candidates, the company should market the job opening through several methods, such as job postings, social networks, and referrals. Make sure that your posted advertisement is in English and Swahili.
• Step 3: To determine the candidates’ suitability for the position and the corporate culture, the company should conduct preliminary interviews. Interviews over the phone or on video can be used for this.
• Step 4: The company should test applicants’ skills to see whether they possess the qualifications needed for the position. Online tests or exams administered in person can be used for this.
• Step 5: The business should conduct final interviews to determine the shortlisted candidates’ suitability for the position.
• Step 6: Extend a job offer to the employee who matches all requirements and discuss the employment details, including the wage, incentives, and commencement date.
• Step 7: The employer is responsible for ensuring the new hire employee has a seamless onboarding process, including training and orientation to help them get used to their new position.

Let Multiplier be Your EOR Platform in Uganda

It might be challenging to understand the complex laws of other countries, which is why many businesses prudently select an EOR platform to guarantee a seamless and legal hiring process internationally. East Africa, Europe, and the USA are just a few of the 150+ local business organizations that make up the market-leading EOR Multiplier.

As your EOR, we provide a smooth onboarding process for recruitment and selection in Uganda, give legal employment contracts and standards, and expertly manage rewards and benefits.