Employer of Record (EOR) Services in Uganda

Employer of Record (EOR)/HR Outsourcing refers to services performed by a third party to support companies in managing employees, particularly when they are hiring across different regions or countries.

Companies look to Employer of Record (EOR)/HR Outsourcing services when they want to expand into a new country or market but have no legal entity/location there.

Cedar Africa Group’s EOR services handle many aspects of your business. From finding and hiring talent to managing payroll and ensuring compliance with labour and tax laws, we get you ready to open for business.

How Employer of Record (EOR) services in Uganda work

An Employer of Record (EOR) service in Uganda works by acting as the legal employer for your workforce while you retain operational control over their day-to-day activities. Here’s how it generally works:

1. Partnership and Agreement:

Your company agrees with an EOR service provider and a legal entity registered in Uganda. This agreement outlines the scope of services, responsibilities, and fees.

2. Employee Identification and Hiring

Your company identifies and selects the individuals you wish to employ in Uganda. The EOR then formally hires these individuals under its Ugandan entity, acting as the legal employer. The EOR ensures that employment contracts are legally compliant with Ugandan labor laws, including terms related to job responsibilities, working hours, salary (typically in Ugandan Shilling), benefits, and termination conditions.

3. Onboarding

The EOR manages the onboarding process for new hires according to local requirements. This includes collecting necessary employee information, handling documentation, and setting up payroll and benefits accounts.

4. Payroll and Taxation:

The EOR takes responsibility for processing payroll for your employees in Uganda. This includes calculating salaries, withholding local taxes, and remitting statutory deductions like contributions to the National Social Security Fund (NSSF). The EOR ensures timely and accurate salary disbursements in the local currency (UGX).

5. Benefits Administration:

The EOR manages employee benefits in compliance with Ugandan labor laws and any additional benefits you wish to offer. The EOR can also facilitate access to supplementary benefits such as health insurance, pensions, and allowances for transport or communication, aligning with local practices.

6. HR and Compliance:

The EOR ensures that all employment practices comply with Ugandan labor laws, including regulations related to working hours, overtime pay, and termination procedures. They stay updated on changes in local employment legislation, minimizing the risk of non-compliance for your company.

7. Offboarding:

When an employee’s engagement ends, the EOR manages the offboarding process by Ugandan labor laws, including any required notice periods and severance pay.

What our Employer of Record (EOR) services entail

Talent acquisition and staff outsourcing

As an EOR service provider, we assist in identifying and hiring the right talent for your organization. We leverage our extensive network and recruitment expertise to source candidates that match your specific requirements. Our services include job postings, screening, interviewing, and presenting qualified candidates. Additionally, we manage staff outsourcing by handling the administrative aspects of employment, allowing you to focus on integrating new hires into your team without the complexities of direct employment management.

Offer negotiation and contract management

We facilitate offer negotiations to ensure competitive and attractive employment terms that align with industry standards and your company’s compensation strategy. Our team drafts, reviews, and manages employment contracts to comply with Ugandan labour laws and regulations. We handle contract renewals, amendments, and terminations, ensuring all agreements are legally sound and reflect the agreed terms.

Employee onboarding

Our onboarding process ensures that new employees are seamlessly integrated into your organization. We manage all necessary administrative tasks, including the completion of required documentation, orientation, and initial training. Our goal is to provide a smooth transition for new hires and equip them with the tools and information they need to succeed in their roles.

Payroll processing

We handle all aspects of payroll processing to ensure employees are paid accurately and on time. This includes calculating salaries, overtime, bonuses, and deductions. We manage the entire payroll cycle, from data collection and processing to disbursement, while ensuring that the Ugandan payroll regulations and standards are being followed.

Tax administration – statutory remittance

We take responsibility for the administration and remittance of statutory taxes and contributions, including income tax, social security, and other mandatory deductions. Our team ensures that all tax obligations are met by following Ugandan tax laws, minimizing the risk of penalties and ensuring you comply with local tax regulations.

Workstation and admin support

We provide comprehensive support for setting up and maintaining workstations for your employees. This includes managing office supplies, equipment, and administrative services required for day-to-day operations. Our goal is to create an efficient and productive work environment for your team.

Immigration support – visa, special pass, and work permit processing (for expatriates)

For expatriate employees, we offer immigration support to facilitate the acquisition of necessary work visas, special passes, and work permits. Our services include guiding you through the application process, making sure you follow the Ugandan immigration regulations, and handling all documentation and procedural requirements.

Travel support – (on a need basis)

We provide travel support for employees as needed, including arranging transportation, accommodations, and itinerary planning. This service is designed to assist with travel logistics to ensure a smooth experience for employees traveling for business purposes.

Relocation support (for expatriates)

Our relocation support services assist expatriate employees with moving to Uganda. We help with various aspects of relocation like finding housing, coordinating moving services, and providing information about living in Uganda. Our goal is to ensure a smooth transition and help expatriates settle into their new environment comfortably.

Benefits and insurance management

We manage employee benefits and insurance programs, including health insurance, retirement plans, and other employee perks. Our services include selecting and administering appropriate benefits packages, handling enrollments, and ensuring that all benefits comply with Ugandan regulations and meet the needs of your employees.

Company and employee registration

We handle the registration of both your company and employees with relevant Ugandan authorities. This includes obtaining necessary business licenses and registering employees for statutory benefits according to the requirements of our local regulations. Our services see to it that your company and its employees are properly documented and compliant with Ugandan laws.

Why choose our EOR services in Uganda? 

Ensure Full Legal Compliance: Cedar Africa Group takes responsibility for navigating the complexities of Ugandan labor laws, tax regulations, and employment standards. This significantly reduces your risk of non-compliance and potential legal issues. We help you stay updated on the evolving legislation in Uganda to ensure your employment practices are always compliant.

Cost and Time Efficiency: Setting up a legal entity in Uganda can be time-consuming and expensive, involving registration, legal fees, and establishing local infrastructure. An EOR like us allows for a much faster and more cost-effective entry into the Ugandan market, enabling you to onboard employees quickly without these upfront investments.

Access to Local Talent and Market Insights: We have established networks and an understanding of the local labor market in Uganda. We can assist in identifying and recruiting qualified talent that meets your needs. We can also provide insights into local compensation expectations and benefits norms to help you create competitive employment packages.

Risk Mitigation: As your EOR, we assume many employer-related risks associated with employment in Uganda. These include liabilities related to compliance, payroll errors, and potential labor disputes, offering a layer of protection for your company.

Flexible Scaling: Whether you need to hire a few employees for a specific project or scale up your workforce over time, we provide the flexibility to adjust your team size in Uganda without the long-term commitments and complexities of managing your legal entity.

What you need for an Employer of Record (EOR) service in Uganda

1. Business information: You will need to provide details about your company, including its legal name, business registration, and nature of operations.
2. Employee details: There’s also a need to share information about the employees you want to hire through the EOR. Details should include their roles, job descriptions, and compensation packages.
3. Compliance requirements: You have to outline any specific compliance needs or local regulations relevant to your industry or business operations.
4. Payroll information: An EOR service provider needs details about your salary structures, benefits, and any other compensation-related data to help find the right candidates.
5. Contractual agreements: You will need to work with the EOR to draft and finalize employment contracts that meet Kenyan legal standards.
6. Company policies: You also need to share any internal policies or practices you wish to be integrated into the EOR service.

Employment contracts in Uganda 

1. The Employment Act 2006: This is the primary law governing employment terms.

2. Employment Contracts: * Written (6+ Months): Mandatory for six months or more employment. * Key Details: Include names, job, start date, location, hours, pay, benefits, notice period, and disciplinary rules. * Types: Indefinite, fixed-term, specific task, probationary (max 1 year).
3. Working Hours & Rest: * Max 48 Hours/Week: Typically 8 hours/day. * Breaks: 30-minute break for 8+ hour workdays. * Weekly Rest: 24 consecutive hours.  

4. Minimum Wage: Legally mandated, reported at UGX 130,000 per month
5. Wages & Payment: * Currency: Paid in Ugandan Shilling. * Frequency: Daily to monthly. * Deductions: Only legally allowed or with consent. * Equal Pay: For equal work, regardless of protected characteristics. 

6. Leave Entitlements: * Annual: 21 working days paid per year. * Sick: Up to 1 month fully paid, then unpaid (with medical certificate). * Maternity: 60 working days fully paid for female employees. * Paternity: 4 working days paid for male employees. * Public Holidays: Paid leave or double pay/day off for working.  

7. Termination of Employment: * Notice: 2 weeks to 3 months based on service/contract. * Valid Reason: Required for termination based on conduct or capacity. * Severance Pay: For unfair dismissal/redundancy after 6+ months.  

8. Social Security (NSSF): Employer (10%) + Employee (5%) contribution.  

9. Workplace Safety & Health: Employer duty to ensure a safe working environment.  

10. Non-Discrimination: Prohibited based on various grounds (race, gender, etc.).

11. Work Permits: Required for foreign workers.  

12. Compliance: Essential to avoid fines and legal issues.

Mandatory benefits that employers must provide for employees in Uganda

Based on the Ugandan Employment Act 2006 and other relevant labor laws, here are the mandatory benefits that employers must provide to their employees in Uganda:

Remuneration and Payslips

Employers must pay employees promptly for the work done and provide written payslips detailing gross compensation and any deductions.

Minimum Wage

While the national minimum wage is legally set at a UGX 130,000 per month as of April 2025, Employers must adhere to the currently legally enforced minimum wage.

• Working Hours and Overtime: The standard working week is a maximum of 48 hours (8 hours daily). Overtime work should not exceed 10 hours per day and must be compensated at 1.5 times the regular wage and double the regular wage for work on public holidays. A 30-minute break is mandatory for employees working eight or more hours daily.

• Annual Leave: Employees are entitled to a minimum of 21 days of paid annual leave per year, accruing at a rate of seven days for every four months of service (for those working at least 16 hours a week).

• Sick Leave: After one month of continuous service, employees are entitled to up to one month of fully paid sick leave per year, provided a medical certificate is presented for absences exceeding three days.

• Maternity Leave: Female employees are entitled to 60 working days of fully paid maternity leave, with at least four weeks following childbirth or miscarriage.

• Paternity Leave: Male employees are entitled to four working days of paid paternity leave per year following the birth of their child or a miscarriage of their spouse.

• Public Holidays: Employees are entitled to paid time off for gazetted public holidays (approximately 15 per year). If required to work on a public holiday, they are entitled to compensation equal to 200% of their regular wage.

• National Social Security Fund (NSSF) Contributions: Employers must legally register with the NSSF and make monthly contributions for their employees. The employer contributes 10% of the employee’s gross monthly wage, and the employee contributes 5%.

• Severance Pay: Employers are obligated to provide severance pay in specific circumstances, including unfair dismissal, termination due to the employer’s insolvency or death, or if the employee terminates the contract due to physical incapacity not caused by misconduct, provided the employee has worked for at least six months.

• Work Injury Insurance: Employers are legally required to insure their workers against injuries or illnesses incurred while performing their duties. This provides financial protection for employees due to work-related medical expenses.
• Compensation for Death or Disability Due to Work: In cases of death or disability resulting from workplace accidents or occupational diseases, employers are responsible for providing compensation as outlined in the relevant laws.

These mandatory benefits ensure that Ugandan employees are protected in terms of social security, health, income, and work-life balance. Employers must comply with these statutory requirements to avoid legal penalties and ensure that employees’ rights are protected.