Kenya PAYE Income Tax Calculator

About the Kenya PAYE Income Tax Calculator

Work out the PAYE your employer deducts in Kenya, the way the Income Tax Act and KRA’s PAYE rules set it. Enter your gross cash pay for a month or a year: the calculator takes off your NSSF contribution (Tier I and Tier II), SHIF and the Affordable Housing Levy, which all come off before PAYE, taxes the rest by KRA’s bands, from 10% on the first Ksh 24,000 a month to 35% above Ksh 800,000, and sets off your personal relief of Ksh 2,400 a month and any insurance relief.

Add other pension contributions, insurance premiums, interest on a mortgage for your own home, a post-retirement medical fund, non-cash benefits and meals at work, and see each limit the Act puts on them. Every step is shown with the rule it comes from. Nothing you type leaves your browser.

Without a pass the page shows a free preview of your own result: your PAYE, with the first rows of each table, while every other figure stays hidden until you unlock it with a Pro pass.

How PAYE is worked out

PAYE is income tax on employment income, deducted by your employer. KRA’s PAYE page and the Third Schedule of the Income Tax Act set the bands on taxable pay:

• the first Ksh 24,000 a month (Ksh 288,000 a year) at 10%;
• the next Ksh 8,333 a month (Ksh 100,000 a year) at 25%;
• the next Ksh 467,667 a month (Ksh 5,612,000 a year) at 30%;
• the next Ksh 300,000 a month (Ksh 3,600,000 a year) at 32.5%;
• everything above Ksh 800,000 a month (Ksh 9,600,000 a year) at 35%.

A resident then sets off personal relief of Ksh 2,400 a month (Ksh 28,800 a year) and insurance relief of 15% of the premiums paid, up to Ksh 60,000 a year. What is left is the PAYE; it is never below nil.

What comes off before PAYE

The Income Tax Act lets these come off your employment income before the bands apply:

• the Affordable Housing Levy you pay, 1.5% of your gross salary (section 15(2)(ac));
• your SHIF contributions, 2.75% of your gross salary, at least Ksh 300 a month (section 15(2)(ae));
• NSSF and other contributions to registered pension and provident funds and individual retirement funds, up to the lesser of 30% of your pensionable income and Ksh 30,000 a month (section 22A, which counts NSSF as a registered fund);
• a post-retirement medical fund, up to Ksh 15,000 a month (section 15(2)(ad));
• interest on a loan to buy, build or improve the home you live in, from one of the lenders the Act lists, up to Ksh 30,000 a month (section 15(3)(b)).

NSSF, SHIF and the Housing Levy

Under the NSSF Act you and your employer each pay 6% of your pensionable pay: Tier I on pay up to the Lower Earnings Limit and Tier II on pay from there up to the Upper Earnings Limit. NSSF’s notice to employers sets the Year 4 limits at Ksh 9,000 and Ksh 108,000, so the most you pay is Ksh 540 in Tier I and Ksh 5,940 in Tier II a month; its later statement confirms that these rates still apply. Fluctuating pay such as overtime is left out of NSSF wages.

SHIF is 2.75% of your gross salary, at least Ksh 300 a month, with no upper limit (Social Health Authority). The Housing Levy is 1.5% of your gross salary, and your employer pays as much again (Affordable Housing Act).

Benefits, meals and other pay

Non-cash benefits — a car, utilities or other things your employer provides or pays for you — are employment income once their total value is Ksh 60,000 a year (Ksh 5,000 a month) or more, and then in full (section 5(2)(b)). The first Ksh 60,000 a year of meals in your employer’s canteen or cafeteria is left out (section 5(4)(f)), and so is medical cover your employer provides for a full-time employee (section 5(4)(b)).

A car is valued at the higher of the value the Commissioner sets and 2% a month of what it cost your employer (section 5(2B)). Housing is valued, for most employees, at the higher of 15% of your other employment income and the rent your employer pays a landlord, less any rent you pay; section 5(3) has its own rules for directors, farm workers, housing your employer owns and pay above Ksh 600,000 a year. Enter those values as non-cash benefits.

When your employer pays it

Your employer pays the PAYE it deducts and files the return on or before the 9th day of the following month (KRA). Under the Tax Procedures Act a late return costs the higher of 25% of the tax and Ksh 10,000, late payment 5% of the tax, and late payment interest is 1% a month or part of a month.

Limitations

• For an employee’s pay from one employer. A second job, business and rental income and your annual return are not included.
• Non-cash benefits are entered at their taxable value: the calculator does not value a car or a house for you.
• Exemptions for persons with disabilities and the special rules for directors are not included.
• The NSSF limits are NSSF’s Year 4 rates; change them under More deductions when NSSF publishes new ones.
• An estimate from the Income Tax Act and KRA’s published rules, not tax advice: your employer’s payroll and KRA decide what you pay.

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