KRA Pay As Your Earn, PAYE, tax- Individual Income Tax Bands and Resident Personal Relief

Employees working in the formal sector are subjected to a monthly Pay As You Earn, PAYE, tax that is deducted from their salaries. The deductions are effected by the employers and sent to the Kenya Revenue Authority, KRA. The amounts of taxes payable depends on the amount of salary earned by the employee. Each employee enjoys a monthly personal relief.

“Kenya Revenue Authority wishes to notify employers, employees and the public of the following changes that were introduced under the Finance Act, 2017 effective 1st January, 2018,” reads a notice by KRA dated 9th January, 2019.

Revised Individual Tax Bands and Rates

According to the circular, the new tax bands and rates are as follows:

Annual Monthly Rates;
a). On the first Kshs. 147,580 Kshs. 12,298 10%
b). On the next Kshs. 139,043 Kshs. 11,587 15%
c). On the next Kshs. 139,043 Kshs. 11,587 20%
d). On the next Kshs. 139,043 Kshs. 11,587 25%
e). On all income over Kshs. 564,709 Kshs. 47,059 30%

Residents’ Personal Relief

The Resident Personal Relief has been increased from Kshs. 15,360 per annum (Kshs. 1,280 per month) to Kshs 16,896 per annum (Kshs. 1,408 per month)

“Employers, employees and other individual taxpayers are advised to implement the above changes while computing the taxes for periods beginning 1st January, 2018,” adds the tax man

KRA also expects the employees to file annual tax returns, online, between January and June each year.