![]() ![]() The first return under the new rate shall be due by the 9th August 2023. The following tax rates shall apply to individual employment income with effect from 1st July 2023. Relief is given at 15% of premiums paid up to a maximum of Kshs 60,000 per annum.įor education and health, the policy should have a maturity period of at least 10 years.įrom 1st January 2022, contributions to National Hospital Insurance Fund (NHIF) qualify for insurance relief. Insurance relief is granted to an employee who has paid insurance premiums for life or health or education polices for himself, his wife or child. It is currently set at Kshs 2,400 per month or Kshs 28,800 per year. It is meant to lighten the tax burden on the taxpayer. Personal Relief is granted to resident individuals. ![]() The allowable deduction is limited to a maximum of Ksh 20,000 per month. Pension contributions by an employee to a registered pension fund ![]() Interest paid on an amount borrowed from the first five financial institutions specified in the fourth Schedule of the Income Tax Act, either for the purchase or improvement of premises occupied for residential purposes is deductible against employment income, up to a maximum of Kshs 300,000/- per annum. These are the amounts deducted from an employee’s emoluments in order to arrive at the amount which will be subjected to tax Education fees of employee's dependants or relatives paid from income which has already been taxed in the hands of the employer.However the exemption is not available to individuals who are already enjoying deductions in respect of contributions to a registered retirement benefits scheme. Gratuity paid by an employer to a registered retirement benefits scheme subject to a limit of Kshs.Pension contribution made by a tax exempt employer to a registered scheme that is within the allowable limit of Ksh 20,000 per month or Ksh 240,000 per year.Pension contribution made by an employer, who is a person chargeable to tax, to a registered or unregistered scheme that is within the allowable limit of Ksh 20,000 per month or Ksh 240,000 per year.In the case of non-Kenyan citizens who are in Kenya solely to serve the employer, expenditure on passages between Kenya and any place outside Kenya borne by the employer.subsistence allowance on official duty (per diems) or mileage allowance are not considered taxable pay. Amounts that are mere reimbursement of expenses e.g.Meals provided by the employer up to a maximum of Ksh 4,000 per month or Kshs.Pension contribution paid by an employer to a registered or unregistered scheme in excess of the allowable amount of Kshs 20,000 or Kshs 240,00 per year.Pension contribution paid by a tax exempt employer to an unregistered scheme.Household utilities – including telephone, electricity, water, security, domestic expenses in excess of the allowable limit of Kshs 3,000 per month.Loans at interest rates that are lower than the prevailing market rate.Where an employee is provided with a motor vehicle by his employer i.e.Gains or profits from employment that are not paid in cash are chargeable to tax. PAYE is chargeable to persons of employment income of Kshs. Remit the tax deducted to the Kenya Revenue AuthorityĪs an employer you are required to deduct PAYE from your employees' salaries and wages at the prevailing rates and remit the same to KRA on or before the 9 th of the following month.Deduct tax from the employee(s) emoluments.Gains or Profits includes wages, casual wages, salary, leave pay, sick pay, payment in lieu of leave, fees, commission, bonus, gratuity, or subsistence, travelling, entertainment or other allowance received in respect of employment or services rendered.Īny person who makes pays emoluments to an employee(s) is required to register for the PAYE obligation, upon which the person is required to: ![]() PAYE is a method of collecting tax from individuals,both Resident and Non-resident, in gainful employment. ![]()
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