The study investigated the effect of compensation on service delivery at Ntungamo District Local Government in Uganda. The research was guided by the premise that fair and adequate compensation influences employee motivation, commitment, and overall performance, which in turn affects the quality and consistency of public service delivery. A descriptive research design was employed, and data were collected from a sample of 125 employees using structured questionnaires and key informant interviews. Descriptive statistics, including frequencies, percentages, means, and standard deviations, were used to summarize employee perceptions of compensation, while inferential analysis, specifically simple linear regression, was applied to examine the relationship between compensation and service delivery. The results revealed that a substantial majority of employees were satisfied with their compensation, with 75.2% expressing satisfaction with salary and benefits and 78.4% indicating that timely payment of salaries motivated them to perform better. Regression analysis demonstrated a strong positive relationship between compensation and service delivery (R = 0.754, R² = 0.569, p < 0.001). The unstandardized coefficient (B = 0.878, t = 2.748, p < 0.001) indicated that a unit increase in compensation led to an average increase of 0.878 units in service delivery. The findings suggested that both the adequacy and timeliness of compensation significantly influenced employees’ motivation, commitment, and performance, which translated into higher quality and more consistent service provision. It was concluded that compensation played a critical role in shaping service delivery outcomes at Ntungamo District Local Government. Adequate and timely remuneration enhanced employee motivation, fostered commitment, and encouraged accountability, ultimately improving service quality and reliability. The study recommended that the district ensure salaries and benefits are fair, competitive, and aligned with job responsibilities, and that salary payments are disbursed promptly. Additionally, periodic review of compensation packages and the provision of performance- based incentives were suggested to sustain employee motivation and service excellence.