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New Kenya Revenue Authority (KRA) Income Tax - PAYE Calculator 2016 & 2017

Your Pay Details

Income Summary (KSh.)  % Monthly (KSh.) Annually (KSh.) Weekly (KSh.) Daily (KSh.)
Gross Pay 100% 50,000.00 600,000.00 12,500.00 1,785.71
N.S.S.F. 0.40% 200.00 2,400.00 50.00 7.14
Taxable Pay 99.60% 49,800.00 597,600.00 12,450.00 1,778.57
PAYE Before Relief ? 19.09% (9,543.85) 114,526.20 (2,385.96) (340.85)
Personal Relief 2.56% 1,280.00 15,360.00 320.00 45.71
Insurance Relief 0.00% 0.00 0.00 0.00 0.00
Tax Payable 16.53% (8,263.85) 99,166.20 (2,065.96) (295.14)
N.H.I.F. 2.40% 1,200.00 14,400.00 300.00 42.86
Net Pay 80.67% 40,336.15 484,033.80 10,084.04 1,440.58
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FAQ's

  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.

Note : This KRA income tax calculator has been updated to include the new KRA income tax rates effective 1st January 2017 and allows comparison with the salary income tax rates for the year ending 31st December, 2016.

  What is 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.

Casual employment may be referred to as that which is not longer than one month with any one employer and is not regular in nature.

It is the employer's statutory duty to deduct income tax from the pay of his employees whether or not he has been specifically told to do so by the Department.

The normal PAYE year runs from 1st January to 31st December, it is filed and remitted monthly by the employer.

  How is PAYE calculated?

PAYE income tax follows the progressive taxation system. Higher incomes are taxed more than lower incomes. The table below shows the income tax rates for different employee income brackets

Taxable Income Tax Rate
KSh0 - KSh10,165 10%
KSh10,165 - KSh19,741 15%
KSh19,741 - KSh29,317 20%
KSh29,317 - KSh38,893 25%
KSh38,893 and Above 30%
  What are the New KRA tax rates?

Effective 1st January, 2017 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, favouring the lower income earners. The new income brackets and new KRA PAYE tax rates used to calculate the net pay will be as follows :

Taxable Income Tax Rate
KSh.0 - KSh.11,180 10%
KSh.11,181 - KSh. 21,715 15%
KSh. 21,715 - KSh. 32,249 20%
KSh. 32,250 - KSh. 42,780 25%
KSh. 42,781 and Above 30%
  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.

  What is the formula for calculating PAYE in Kenya?

Pay-As-You-Earn(PAYE) is the tax charged on income earned by employees in Kenya. The formula for calculating this income tax in Kenya uses the following simple steps:

  1. Step 1. Gross Income = Basic salary + allowances + commissions
  2. Step 2. Taxable Income = Gross Income - all deductions/exemptions allowed by law e.g. NSSF, private pension
  3. Step 3. From Taxable Income on step 2, Calculate marginal taxes by multiplying the total amount of taxable income in each successive tax bracket by its tax rate.
  4. Step 4. Total PAYE tax = Sum of the marginal taxes from step 3
  5. Step 5. Tax Payable = Total PAYE - Total Relief e.g. Personal Relief, Insurance Relief

  What is NSSF?

The National Social Security Fund (NSSF) is a government agency that was established in 1965 through an Act of Parliament. It's mandatory national scheme whose main objective was to provide basic financial security benefits to Kenyan upon retirement for employees in the both the formal and informal sectors of the economy. The mission of the NSSF is to be a trusted centre of excellence in the provision of Social Security. In January 2014, the Fund was changed to a Pension Fund from a Provident Fund meaning that a member can only get a maximum of a third of their contributions as a cash lump sum upon retirement and the rest paid out periodically over the rest of their retirement/life.    http://www.nssf.or.ke

  What is NHIF?

National Hospital Insurance Fund is a State Parastatal that was established in 1966 as a department under the Ministry of Health but was over time transformed to a state corporation. The Fund's core mandate is to provide medical insurance cover to all its members and their declared dependants (spouse and children). The NHIF membership is open to all Kenyans who have attained the age of 18 years and years and have a monthly income of more than KSh. 1,000. The medical insurance covers costs for consultation, laboratory investigations, doctor/specialists, maternity, dialysis, family planning fees amongst an extensive list inpatient and outpatient costs, in over 400 government and private hospitals countrywide.    http://www.nhif.or.ke/healthinsurance/

  How much is the NHIF contribution?

The employee's NHIF contribution is calculated based on his/her gross salary. The table below shows the employee monthly gross and the NHIF deductions

Self employed column at the top

Salary Rate
KSh 5,999 KSh 150
KSh 6,000 – 7,999 KSh 300
KSh 8,000 – 11,999 KSh 400
KSh 12,000 – 14,999 KSh 500
KSh 15,000 – 19,999 KSh 600
KSh 20,000 – 24,999 KSh 750
KSh 25,000 – 29,999 KSh 850
KSh 30,000 – 34,999 KSh 900
KSh 35,000 – 39,999 KSh 950
KSh 40,000 – 44,999 KSh 1,000
KSh 45,000 – 49,999 KSh 1,100
KSh 50,000 – 59,999 KSh 1,200
KSh 60,000 – 69,999 KSh 1,300
KSh 70,000 – 79,999 KSh 1,400
KSh 80,000 – 89,999 KSh 1,500
KSh 90,000 – 99,999 KSh 1,600
KSh 100,000 & Above KSh 1,700
Self-Employed KSh 500
  What are the “new” NSSF rates?

The NSSF Act No. 45 of 2013 raised the maximum total (employee and employer) contribution from KSh 400 per month to KSh 2,160 per month for employees earning above KSh 18,000 per month. However, the new Act is still under debate and the old contributions of KSh 400 per month are still being accepted.

  What is insurance relief?

An employee is entitled to a tax relief at the rate of 15% of insurance premiums paid subject to maximum relief amount of KSh 5,000 per month if he/she proves that;

i) He/She has paid insurance premiums for an insurance policy made by him/her on his/her life, or the life of his wife or of his child. The insurance policy is active and it guarantees a capital lump sum, payable in Kenya and in the lawful currency of Kenya, Kenya Shillings;
or
ii) The legal employer has paid premiums for the insurance policy on the life, on behalf and for the benefit of the employee which has been taxed on that employee salary contracted in the company;

Note

Employees who have enrolled on a life insurance policy must present to their employer a certificate from the life insurance company showing proof and particulars of their life insurance policy e.g. name of the life insured, type of policy, start and end date, monthly/periodic premiums payable, sum assured etc.

  Can I get a tax relief for my personal pension contribution in Kenya?

Saving in a registered retirement benefits scheme is one sure way of minimising your individual PAYE tax obligations. Contributions to a retirement benefits scheme are tax exempt as per the set limits (Kshs. 20,000/- per month or 30% of salary, whichever is less). The return earned on the investment is also tax exempt. For a more detailed guide on the tax benefits of a personal pension scheme, please see this guide

  Is this calculator accurate?

Yes, absolutely. It is accurately maintained and updated with changes in the Kenyan tax laws and statutory deductions bodies.

Every effort is made to keep this calculator tool accurate and updated. PESABAZAAR.com does not accept any liability or damages that may arise out of the use of this tool.

 

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