While setting up a new Wordpress test site, I encountered this problem while uploading a new theme which file size is 19MB. Is it happening to you, too?
It is important to note that this has nothing to do with Wordpress setup or configuration. It is in the server which your hosts usually put in place to maximize the resources of the server. It can be fixed by changing a parameter in your php.ini file. It can be easily done if your have access to the file. But if you are in a shared hosting environment, you will have to coordinate with your hosting provider's customer support.
Here's how we fix it:
1. Locate the php.ini file. In my case, since I am using local XAMPP, it is located in xampp > php folder.
2. Inside the file, edit the following values:
upload_max_filesize = 12M
post_max_size = 13M
memory_limit = 15M
You can set upload_max_filesize to your desired limit. Then I would usually double post_max_size and memory_limit.