Kenyan Tax Guide

PAYE — Pay As You Earn

PAYE is the income tax withheld from employees' salaries each month and remitted to KRA by the 9th of the following month. It's calculated on a progressive band system.

• First KES 24,000 → 10%
• Next KES 8,333 → 25%
• Next KES 25,000 → 30%
• Next KES 25,000 → 32.5%
• Excess above KES 82,333 → 35%

Personal relief of KES 2,400/month is deducted from the calculated PAYE. Insurance premium relief is 15% of premium paid (capped at premium of KES 60,000/year).

NSSF — National Social Security Fund

Mandatory under NSSF Act 2013. Both employer and employee contribute 6% of pensionable pay in two tiers:

• Tier I: First KES 7,000 → 6% each side = KES 420 max each (KES 840 total)
• Tier II: KES 7,000 – KES 36,000 → 6% each side = KES 1,740 max each (KES 3,480 total)
• Combined max: KES 4,320/employee/month

SHIF, Housing Levy, NITA

• SHIF: 2.75% of gross, minimum KES 300/month (replaces NHIF)
• Affordable Housing Levy: 1.5% of gross, employer + employee
• NITA: KES 50 per employee per month (employer only), remitted quarterly

VAT — Value Added Tax

Standard rate: 16%. Mandatory registration if turnover exceeds KES 5 million/year. Filed monthly by the 20th. Zero-rated supplies (exports, certain essentials) report VAT at 0%. Exempt supplies (financial services, insurance) are excluded entirely.

Corporate Income Tax (CT)

Standard rate: 30% for resident companies on taxable profit. Filed annually within 6 months of tax year end. Quarterly instalment tax due 20th of 4th, 6th, 9th, and 12th months.

TOT — Turnover Tax

Alternative to CT for small businesses. 3% flat on gross turnover. Eligible if annual turnover ≤ KES 25 million. Election is annual and binding — cannot switch mid-year.

WHT — Withholding Tax

Tax withheld at source on certain payments. Common rates:

• Professional fees: 5% (resident) / 20% (non-resident)
• Rent (commercial): 10% (resident) / 30% (non-resident)
• Dividends: 5% (resident) / 15% (non-resident)
• Interest: 15% (both)
• Casual labour: 5% (above KES 2,000/day)

WHT certificates must be issued to recipients within 5 days of deduction.

Filing Deadlines Summary

• PAYE/P10: 9th of following month
• NSSF, Pension: 15th of following month
• SHIF, Housing Levy: 9th of following month
• VAT, WHT, TOT: 20th of following month
• CT annual return: 6 months after year-end
• IT1 (individual): 30 June
• Annual Return (BRS): 42 days after AGM