PAYE Tax Calculator — Kenya (2026)

PAYE (Pay As You Earn) is income tax deducted from employment income in Kenya. All employees earning above the tax-free threshold must pay PAYE. Your employer deducts it monthly from your salary and remits it to the Kenya Revenue Authority (KRA) on your behalf. PAYE is calculated using progressive tax bands ranging from 10% to 35% based on your taxable income. Even if you earn below the taxable threshold, your employer must still register you for PAYE and file nil returns. Self-employed individuals don't pay PAYE but instead pay income tax through quarterly installments or annual returns.

PAYE is computed by applying Kenya's progressive tax bands to your taxable income. First, calculate your taxable income: gross salary + taxable allowances - pension contributions. Then apply the five tax bands: 10% on the first KES 24,000, 25% on KES 24,001-32,333, 30% on KES 32,334-500,000, 32.5% on KES 500,001-800,000, and 35% on amounts above KES 800,000. Calculate tax for each band separately and sum them. Finally, subtract reliefs (personal, insurance, disability, mortgage) from the total tax. For annual calculations, we divide annual figures by 12, calculate monthly PAYE, then multiply by 12. This ensures accuracy because Kenya's tax bands are monthly.

Taxable allowances increase PAYE. Non‑taxable allowances don’t increase PAYE but still affect net pay and employer costs.

Personal relief is a standard tax credit of KES 2,400 per month (KES 28,800 per year) available to all Kenyan taxpayers. Every employed person qualifies automatically—you don't need to apply for it. Your employer includes it when calculating your PAYE. This relief is deducted from your tax after calculating PAYE on your taxable income, not from your taxable income itself. For example, if your calculated PAYE is KES 10,000, personal relief reduces it to KES 7,600. However, if your calculated PAYE is only KES 1,500, personal relief reduces it to zero (not negative). You cannot get a refund if reliefs exceed your tax. Personal relief has been KES 2,400/month since 2020 and applies to both residents and non-residents employed in Kenya.

Insurance relief is 15% of premiums paid for qualifying insurance policies, capped at KES 5,000 per month (KES 60,000 per year). Qualifying policies include life insurance, health insurance (medical cover), and education insurance policies. The insurance company must be registered in Kenya or approved by KRA. To calculate: if you pay KES 40,000 monthly in premiums, your relief is KES 5,000 (the maximum, since 15% of 40,000 = KES 6,000 which exceeds the cap). If you pay KES 20,000, your relief is KES 3,000 (15% of 20,000). This relief is claimed through your employer by providing insurance certificates, or claimed directly when filing your annual tax return. Group insurance provided by employers may not qualify for this relief if the employer pays the premiums.

Three types of insurance qualify for the 15% relief: (1) Life insurance policies that provide death or disability benefits, (2) Health/medical insurance policies that cover hospitalization and medical expenses, and (3) Education insurance policies that guarantee payment of school fees. The insurance company must be registered with the Insurance Regulatory Authority (IRA) and approved by KRA. Policies must be in your name or for your dependents (spouse, children). Insurance provided by your employer where the employer pays premiums typically doesn't qualify because you're not paying the premiums yourself. Motor insurance, property insurance, and travel insurance do NOT qualify for this relief. Keep certificates and receipts as proof when claiming the relief through your employer or on your annual return.

We cap deductible mortgage interest at KES 25,000/month and model its PAYE impact by reducing the taxable base. The reduction in PAYE is presented within “Other reliefs”.

Pension contributions reduce your taxable income before PAYE is calculated, up to the lower of KES 240,000 per year (KES 20,000/month) or 30% of your employment income. This is one of the most powerful legal tax reduction strategies. For example, if you earn KES 150,000 and contribute KES 15,000 to pension, your taxable income becomes KES 135,000. At the 30% tax bracket, this saves you KES 4,500 in PAYE (30% of KES 15,000). So your net cost of pension is only KES 10,500 while saving KES 15,000 for retirement. Any contribution above the limit doesn't reduce tax but still goes to your retirement savings. The pension scheme must be registered with the Retirement Benefits Authority (RBA) and approved by KRA. Both employee and employer contributions count toward the limit.

The maximum tax-deductible pension contribution is the lower of: (1) KES 240,000 per year (KES 20,000 per month), or (2) 30% of your annual employment income. For most people earning above KES 800,000 annually (KES 66,667/month), the KES 240,000 annual cap applies. For lower earners, the 30% rule limits deductions. Example: if you earn KES 50,000/month (KES 600,000/year), your maximum deductible pension is KES 180,000/year (30% of 600,000), not KES 240,000. You can contribute more than the limit, but only the capped amount reduces your taxable income. The excess still goes to your retirement but doesn't save tax. This calculator automatically applies the correct limit based on your income.

Mortgage interest relief applies to interest paid on loans for owner-occupied residential properties (your primary home). The deductible interest is capped at KES 25,000 per month (KES 300,000 per year). This calculator models the relief by reducing your taxable income by the interest amount (up to the cap), then calculating PAYE on the reduced income. The difference in PAYE is your mortgage benefit. For example, if you're in the 30% tax bracket and pay KES 20,000 monthly interest, you save KES 6,000 in PAYE (30% of 20,000). This relief only applies to your primary residence, not rental properties or second homes. You must provide proof of interest paid (bank statements) and proof that you occupy the property. The relief is claimed through your employer or on your annual tax return.

Only mortgages for owner-occupied residential properties qualify for interest relief. This means: (1) The property must be your primary residence where you actually live, (2) You must own the property (not renting), (3) The loan must be from a financial institution registered in Kenya, and (4) You must have proof of interest paid and occupancy. Mortgages that do NOT qualify include: rental properties, commercial properties, second homes, vacation homes, land loans (without a house), and loans from unregistered lenders. If you have multiple mortgages, only interest on your primary residence qualifies. The relief is on interest paid, not the principal amount. Keep bank statements showing interest payments and title deeds showing ownership.

Disability relief is KES 1,800 per month (KES 21,600 per year) available to persons with disabilities who are registered with the National Council for Persons with Disabilities (NCPWD). To qualify, you must: (1) Have a recognized disability (physical, visual, hearing, intellectual, or mental), (2) Be registered with NCPWD and have a valid disability certificate, and (3) Provide your NCPWD registration number to your employer or KRA. This relief is in addition to personal relief, so you get both (total KES 4,200/month). The relief is deducted from your PAYE after calculation, not from taxable income. To register with NCPWD, visit their offices with a medical report confirming your disability. Registration is free. Once registered, provide your certificate to your employer to claim the relief monthly, or claim it when filing your annual tax return.

To register with NCPWD and claim disability relief: (1) Get a medical assessment from a government hospital or registered medical practitioner confirming your disability type and severity, (2) Visit the nearest NCPWD office with your medical report, national ID, passport photos, and birth certificate, (3) Complete the NCPWD registration form and submit it with your documents, (4) NCPWD will assess your application and issue a disability certificate if approved (usually takes 2-4 weeks), (5) Once you have your certificate, provide a copy to your employer along with your NCPWD registration number, (6) Your employer will apply the KES 1,800 monthly relief starting from the next payroll. If you're already employed, you can claim backdated relief for up to 5 years by filing amended tax returns. Registration with NCPWD is free—do not pay anyone to register you.

If you have multiple employment income sources, each employer calculates PAYE independently based on what they pay you. However, at year-end, you must file a consolidated tax return combining all income sources. This often results in additional tax owed because: (1) Each employer applies personal relief, but you're only entitled to one personal relief per year, (2) Your combined income may push you into higher tax bands, and (3) Reliefs like insurance and pension have annual caps that may be exceeded when combined. Use this calculator to estimate PAYE on your total combined income, then compare with what each employer deducted. File your annual return on iTax by June 30 following the tax year. If you owe additional tax, pay it to avoid penalties. If you overpaid, you can claim a refund (though refunds can take months to process).

Bonuses, overtime, and other irregular payments are fully taxable as employment income. They're added to your regular salary for the month they're paid, and PAYE is calculated on the combined total. This often pushes you into higher tax bands for that month. For example, if you normally earn KES 80,000 but receive a KES 50,000 bonus in December, your December taxable income is KES 130,000, and you pay PAYE at higher rates on the combined amount. There's no special lower rate for bonuses in Kenya. Some employers spread bonuses over multiple months to reduce the tax impact, but this must be genuine (not artificial splitting to avoid tax). Overtime is treated the same as regular salary. Use this calculator to estimate PAYE on your salary plus expected bonus to plan for the tax impact.

You must file an annual tax return (Individual Income Tax Return) by June 30 following the tax year if: (1) You have multiple employers, (2) You have income from sources other than employment (rental, business, investments), (3) Your total annual income exceeds KES 3 million, (4) You want to claim reliefs not claimed monthly (insurance, mortgage, disability), or (5) KRA requests you to file. Even if you're employed by one employer who deducted PAYE correctly, filing a return allows you to claim missed reliefs and potentially get a refund. File through KRA's iTax portal (www.itax.kra.go.ke). You'll need: P9 form from your employer (showing annual income and PAYE deducted), certificates for insurance premiums, pension statements, mortgage interest statements, and NCPWD certificate if applicable. Late filing attracts a penalty of KES 2,000 or 5% of tax due, whichever is higher.

If your employer under-deducts PAYE (deducts less than the correct amount), you are still personally liable for the shortfall. KRA can pursue you for the unpaid tax, plus penalties and interest, even if the error was your employer's fault. This often happens when: (1) Employer miscalculates taxable allowances, (2) Employer fails to update tax rates, (3) You have multiple jobs and each employer applies full personal relief, or (4) Employer doesn't account for all taxable benefits. To avoid this: (1) Use this calculator monthly to verify your payslip PAYE, (2) Report discrepancies to your employer immediately, (3) File annual returns to catch and correct errors, (4) Keep all payslips and P9 forms as proof. If you discover under-deduction, file an amended return and pay the shortfall voluntarily before KRA discovers it—this reduces penalties.

To get a PAYE refund, you must file an annual tax return on iTax showing that you overpaid tax during the year. Common reasons for overpayment: (1) You had multiple employers and each applied personal relief (you're only entitled to one per year), (2) You didn't claim all reliefs monthly (insurance, mortgage, disability) but can claim them annually, (3) You worked part of the year and employer deducted as if you worked the full year, or (4) Employer over-deducted due to calculation errors. To claim: (1) Log into iTax, (2) File Individual Income Tax Return for the relevant year, (3) Attach supporting documents (P9, insurance certificates, etc.), (4) Submit the return—iTax will calculate if you're owed a refund, (5) If approved, KRA will process the refund (can take 3-12 months). You can check refund status on iTax. Refunds are paid via bank transfer or cheque.

iTax is KRA's online portal for all tax services (www.itax.kra.go.ke). Through iTax you can: file tax returns, pay taxes, apply for PIN, check tax compliance status, download tax certificates, claim refunds, and communicate with KRA. To use iTax: (1) Register using your KRA PIN and ID number, (2) Create a password and set security questions, (3) Log in and navigate to the service you need. For PAYE specifically: employers use iTax to file monthly PAYE returns and remit deductions; employees use it to file annual returns, view their tax history, and claim refunds. iTax replaced the old manual filing system in 2013. All tax services are now online-only. If you have issues with iTax, visit any KRA Huduma Centre for assistance. Keep your iTax login credentials secure—they're as important as your bank password.

Kenya uses five progressive PAYE tax bands for 2026: (1) Up to KES 24,000 per month: 10%, (2) KES 24,001 to KES 32,333 per month: 25%, (3) KES 32,334 to KES 500,000 per month: 30%, (4) KES 500,001 to KES 800,000 per month: 32.5%, and (5) Above KES 800,000 per month: 35%. These bands are monthly—if you enter annual figures, we divide by 12, calculate using monthly bands, then multiply by 12. The bands have been stable since 2020 with only minor adjustments. Personal relief is KES 2,400/month (KES 28,800/year). These rates apply to all employment income including salary, bonuses, allowances, and benefits. The bands are set by Parliament through the annual Finance Act and can change each July. Always verify current rates on KRA's website or this calculator (we update immediately when rates change).

Kenya's PAYE tax bands are monthly. This is important because it affects how tax is calculated. When you select "Annual" in this calculator, we don't simply apply annual bands—instead, we divide your annual income by 12, calculate monthly PAYE using the monthly bands, then multiply the result by 12. This ensures accuracy. For example, KES 288,000 annual income is KES 24,000/month, which falls entirely in the 10% band (KES 2,400 monthly tax × 12 = KES 28,800 annual tax). If we incorrectly used annual bands, the calculation would be wrong. This monthly band system means that irregular income (like large bonuses in one month) can push you into higher brackets for that month, even if your annual average is lower. Understanding this helps with tax planning—spreading income evenly across months can reduce total PAYE.

Annual shows 12× of the monthly computation. The “Average per month” figure provides a clear monthly equivalent of PAYE when annual is selected.

Kenya uses progressive taxation where different portions of your income are taxed at different rates. You don't pay your highest tax rate on all your income—only on the portion that falls in each band. For example, if you earn KES 100,000: the first KES 24,000 is taxed at 10% (KES 2,400), the next KES 8,333 at 25% (KES 2,083), and the remaining KES 67,667 at 30% (KES 20,300). Your total tax is KES 24,783 before reliefs, giving an effective rate of about 24.8%, not 30%. This system is fairer because lower earners pay proportionally less. The more you earn, the higher your effective rate, but you never pay the top rate on your entire income.

Gross income is your total salary before any deductions—it's what your employer agrees to pay you. Taxable income is what remains after subtracting pension contributions and adding taxable allowances. The formula is: Taxable Income = Gross Salary + Taxable Allowances - Pension Contributions. For example, if your gross is KES 100,000, you contribute KES 10,000 to pension, and receive KES 5,000 in taxable housing allowance, your taxable income is KES 95,000 (100,000 - 10,000 + 5,000). PAYE is calculated on this KES 95,000, not the original KES 100,000. Understanding this difference is crucial for tax planning because reducing taxable income through pension contributions directly reduces your PAYE.

Yes, there are several legal ways to reduce your PAYE: (1) Contribute to a registered pension scheme (up to KES 20,000/month or 30% of income reduces taxable income), (2) Pay insurance premiums for life, health, or education policies (15% relief up to KES 5,000/month), (3) Pay owner-occupied mortgage interest (up to KES 25,000/month reduces taxable income), (4) Claim disability relief if registered with NCPWD (KES 1,800/month), and (5) Ensure you're claiming personal relief (KES 2,400/month—automatic for all). These are legal tax planning strategies recognized by KRA. Avoid illegal schemes that promise to eliminate PAYE entirely—these can result in penalties, interest, and even prosecution. Always keep documentation (certificates, receipts, statements) to support your claims.

Yes, but it depends on whether the allowance is taxable or non-taxable. Taxable allowances (like housing, commuter, responsibility, or entertainment allowances) are added to your gross salary to calculate taxable income, which increases your PAYE. For example, if your gross is KES 80,000 and you receive KES 20,000 housing allowance, your taxable income is KES 100,000, and you pay PAYE on the full KES 100,000. Non-taxable allowances (like medical reimbursements up to certain limits, meal allowances up to KES 4,000/month, or travel per diems) don't increase your taxable income or PAYE, but they do increase your take-home pay. Always check with your employer which allowances are taxable. KRA publishes guidelines on taxable vs non-taxable benefits.

Pensionable pay is the portion of your salary used to calculate pension contributions (for NSSF, employer pension schemes, etc.). It typically includes basic salary and some allowances, but excludes others. Gross pay is your total salary including all allowances and benefits. For example: if your gross pay is KES 150,000 (basic KES 100,000 + housing KES 30,000 + transport KES 20,000), your pensionable pay might be only KES 130,000 (basic + housing, excluding transport). This matters because: (1) NSSF contributions are calculated on pensionable pay, not gross, (2) Some employer pension schemes use pensionable pay as the base, and (3) The 30% pension deduction limit applies to employment income (usually gross). Your employer defines what's pensionable in your contract. For PAYE purposes, we use gross pay plus taxable allowances. Check your payslip to see how your employer defines pensionable pay.

To verify your employer's PAYE deductions: (1) Get your payslip showing gross salary, allowances, and PAYE deducted, (2) Use this calculator—enter your gross salary, taxable allowances, pension, and insurance exactly as shown on your payslip, (3) Select the same period (monthly/annual) as your payslip, (4) Check all applicable reliefs (personal, insurance, disability, mortgage), (5) Click Calculate and compare the result with your payslip. If there's a difference: (a) Check if you entered all taxable allowances, (b) Verify your employer applied all reliefs you're entitled to, (c) Confirm pension and insurance amounts match, (d) Check if employer is using current 2026 rates. If discrepancies persist, raise it with your HR/payroll department with evidence from this calculator. Keep monthly records—errors compound over time and can result in significant overpayment or underpayment.

Yes, both employee and employer pension contributions count toward the KES 240,000 annual (KES 20,000 monthly) deduction limit for PAYE purposes. For example, if you contribute KES 10,000/month and your employer contributes KES 12,000/month, the total is KES 22,000/month. Only KES 20,000 (the limit) reduces your taxable income. The excess KES 2,000 doesn't reduce PAYE but still goes to your retirement savings. However, for the 30% of income rule, only your contribution counts. So if you earn KES 100,000, your maximum deductible is the lower of: (1) KES 20,000, or (2) 30% of KES 100,000 = KES 30,000. In this case, KES 20,000 applies. Your employer's contribution is a benefit to you but doesn't increase your deduction limit. Some employers structure contributions to maximize your tax benefit while staying within limits.

13th month salary (also called 13th cheque or end-of-year bonus) is fully taxable as employment income. It's added to your regular December salary, and PAYE is calculated on the combined total for that month. There's no special lower rate or exemption for 13th month pay in Kenya. For example, if your regular December salary is KES 100,000 and you receive KES 100,000 as 13th month, your December taxable income is KES 200,000, and you pay PAYE at the applicable rates for that amount (likely pushing you into higher tax bands). This can result in a large PAYE deduction in December. Some employers spread the 13th month over the year (paying 1/12 extra each month) to reduce the tax impact, but this must be structured properly in your contract. Use this calculator to estimate your December PAYE including 13th month pay so you're not surprised by the deduction.

SHIF (Social Health Insurance Fund) and Housing Levy are separate statutory deductions from your salary, but they can affect your PAYE calculation. Since December 27, 2024, both SHIF (2.75% of gross) and Housing Levy (1.5% of gross) are tax-deductible, meaning they reduce your taxable income before PAYE is calculated. However, this PAYE-only calculator doesn't include SHIF and Housing Levy—it focuses solely on income tax. For a complete payroll calculation including PAYE, NSSF, SHIF, Housing Levy, and net pay, use our Net Pay Calculator or Gross-to-Net Calculator. Those tools account for the tax deductibility of SHIF and Housing Levy when calculating your final PAYE. This calculator is specifically for understanding PAYE in isolation, which is useful for tax planning, comparing job offers, or verifying your employer's PAYE calculation.

Personal relief (KES 2,400/month) should be applied automatically by all employers for all employees. It's a statutory relief that every taxpayer is entitled to. However, in practice: (1) Some employers forget to apply it (rare but happens), (2) If you have multiple employers, each will apply it, but you're only entitled to one per year (reconciled at annual return), (3) If your calculated PAYE is less than KES 2,400, the relief reduces it to zero (you don't get a refund). In this calculator, personal relief is checked by default because it applies to everyone. You can uncheck it to see PAYE without relief, but in reality, you should always claim it. If your employer isn't applying personal relief, raise it immediately—you're overpaying tax. Check your payslip: it should show "Personal Relief: KES 2,400" as a deduction from PAYE. If it's missing, you can claim it retroactively through your annual tax return.