Pay As You Earn

What is the Personal Tax Relief?

This is the net amount that is deducted from the total PAYE tax on the employee’s monthly income. It is deducted from the employee’s tax obligation and added to his/her take home page. It is one of the key tools of the progressive taxation system used in income distribution.

A resident individual with taxable income is entitled to a personal relief of KSh 1,162 per month or KSh 13,944 per year in the year ending 31st December, 2016. The new personal tax relief amount for the year 2017 going forward is KSh1,280 per month or Sh15,360 per year.

Pay As You Earn

What are the New KRA tax rates?

Effective 1st January 2018 new income tax brackets will come into effect for all salaried workers. The tax rates/percentages will remain steadfast with the highest tax rates at 30%. However, the different income/salary bands at which these tax rates will change, favoring the lower-income earners.
The new income brackets and new KRA PAYE tax rates used to calculate the net pay will be as follows

NHIF-Rates-and-packages 2020

New NHIF Rates 2020

Following Kenya Gazette notice dated February 6th, 2015, the new NHIF rates will come into effect from 1st April. This means that payroll processing for April 2015 salaries going forward, will be done using the new NHIF rates as shown below.

Pay As You Earn

What is Pay As You Earn (PAYE)

Pay As You Earn (PAYE) is the mandatory tax levied on all employees’ income. In Kenya, the government manages the PAYE tax through the Kenya Revenue Authority (KRA), which collects the statutory contributions from the employer, before salary and wages are paid to the employee. This income tax applies to all employees, permanent, temporary, full time and part time except for the employment that is not longer than 1 month. The income tax applies to wages, salaries, commissions, allowances, fees, bonuses and any other income for which the employer is chargeable by the employee for services provided

What is this PAYE income tax calculator?

This is an independent calculator to help the public quickly understand and calculate Pay As You Earn (PAYE) income tax in Kenya as set out by the Kenya Revenue Authority (KRA). Employees and employers alike can use this calculator to under the statutory contributions liable under the income tax system of Kenya.