Bonus Tax Calculator — Kenya (2026)

Bonuses/commissions are taxable employment income and generally taxed within the period they're paid using the same PAYE bands.

Bonuses can push part of your income into higher PAYE bands in that month, raising the marginal rate on the bonus portion.

NSSF is limited by pensionable pay caps; SHIF and Housing are percentages of gross, so a bonus increases those for the period.

All three are taxable employment income. Bonuses are typically discretionary payments, commissions are performance-based (usually sales), and incentives are goal-based rewards. They're all taxed the same way using PAYE bands.

13th month salary is fully taxable as employment income in the month it's paid. It's added to your regular salary for that month, potentially pushing you into a higher tax bracket, resulting in higher marginal PAYE on the 13th month payment.

Bonuses are added to your regular salary in the payment month. This combined amount may push your income into higher PAYE tax brackets (30%, 32.5%, or 35%). The bonus portion is taxed at the marginal rate, which is often higher than your average tax rate.

Personal relief (KES 2,400/month) is applied once per month regardless of how many income sources you have. You don't get additional relief for receiving a bonus—it's calculated on your total monthly taxable income.

Generally, no. Bonuses are taxed in the month they're paid. However, if your employer structures it as multiple installments paid in different months, each installment would be taxed separately in its payment month, potentially reducing the marginal tax rate.

NSSF is capped at KES 2,160/month. If your regular salary already maxes out NSSF contributions, your bonus won't incur additional NSSF deductions. This means the bonus has no NSSF impact but still faces PAYE, SHIF (2.75%), and Housing Levy (1.5%).

No. End-of-year bonuses (December bonus, performance bonus) are taxed the same as any other bonus—added to your December salary and taxed using progressive PAYE bands. There's no special tax treatment for timing.

All bonuses received in the same month are combined with your regular salary. The total is taxed as a single amount using progressive PAYE bands. Personal relief is applied only once per month regardless of how many payments you receive.

This calculator uses official 2026 PAYE tax bands and rates. For very large bonuses (pushing monthly income above KES 800,000), the 35% top bracket applies. Results should match KRA calculations for standard employment income scenarios.

Include taxable allowances (housing, transport) in your base salary for accurate results. Non-taxable allowances don't affect PAYE calculations. The "Advanced" section lets you specify both types if you want precise baseline comparisons.

Kenya uses monthly PAYE bands. Whether you enter monthly or annual figures, the calculator converts to monthly for accurate tax computation. The period selector helps you input your numbers in the format you have available.

Your employer should include bonus payments in your P9 form for the year. Ensure your payslip clearly shows the bonus amount and all deductions (PAYE, NSSF, SHIF, Housing Levy). Keep these for your annual tax return filing.

Personal relief (KES 2,400/month) is already applied to your total monthly income including bonuses. You cannot claim additional relief specifically for bonuses. However, pension contributions and insurance relief can reduce your taxable income.

Bonuses are included in your employment income reported by your employer on your P9 form. When filing your iTax return, include all bonuses in your total employment income. If PAYE was correctly withheld, you shouldn't owe additional tax.

Only the portion of your income above KES 800,000/month is taxed at 35%. Your bonus is taxed progressively—lower portions at lower rates. Use this calculator to see exactly how much of your bonus falls into each bracket.

No. All bonuses (performance, annual, quarterly, discretionary) are taxed the same way as employment income using progressive PAYE rates. The timing and frequency don't change the tax treatment—only the amount and your base salary matter.

No. Employers must withhold PAYE on bonuses according to KRA regulations. However, they can structure compensation differently (e.g., non-taxable benefits, pension contributions) to optimize your total package. Discuss with HR for legal alternatives.

For annual calculations, the bonus is added to your annual salary and taxed using annual PAYE bands. The calculator divides by 12 to show monthly equivalent. The principle is the same—bonuses increase your total taxable income for the period.

Tax rates are updated in Kenya's annual Finance Act, typically passed in July/August. Bonus taxation rules rarely change, but PAYE bands and rates may be adjusted. We update this calculator immediately when new rates are published. Subscribe for 2027 rate alerts.