Annual income tax using the yearly bands and relief.
Annual income tax
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Tax before relief
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Marginal band
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Effective rate
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Your breakdown
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Band
Slice (KES)
Rate
Tax (KES)
Worked example
Take an annual taxable income of KES 1,200,000. The yearly bands are the monthly bands multiplied by twelve. The first KES 288,000 is taxed at 10%, the slice from 288,000 to 387,996 at 25%, and the remaining 812,004 (from 387,996 up to 1,200,000) at 30%. That gives tax before relief, and the KES 28,800 annual personal relief is then subtracted.
The tax payable is KES 268,600.20 a year, about KES 22,383 a month, an effective rate of roughly 22.4%. The marginal band is 30%. The chart contrasts the tax with the income kept after tax.
How it is calculated
Annual income tax in Kenya uses the same progressive structure as monthly PAYE, just on a yearly base. The five bands are 10% on the first KES 288,000, 25% to 387,996, 30% to 6,000,000, 32.5% to 9,600,000, and 35% above that. Each rate applies only to the income inside its band, so the effective rate stays well below the marginal rate for most earners. The total band tax is then reduced by the KES 28,800 annual personal relief, the yearly equivalent of the KES 2,400 monthly credit. This annual view is useful for reconciling a full year of earnings, for income that is not paid as a regular salary, or for checking a self-assessment return against the PAYE already withheld. Insurance relief and allowable deductions, where they apply, would lower the figure further.
Frequently asked questions
How is annual income tax worked out in Kenya?
The five annual bands apply: 10% on the first KES 288,000, 25% to KES 387,996, 30% to KES 6,000,000, 32.5% to KES 9,600,000, and 35% above. The KES 28,800 annual personal relief is then subtracted. Annual figures are simply the monthly bands multiplied by twelve.
What is the KES 28,800 personal relief and who qualifies?
Personal relief is a fixed tax credit of KES 28,800 per year, equivalent to KES 2,400 per month, granted to every resident individual taxpayer in Kenya. It is deducted directly from the tax liability, not from income, so it reduces your tax shilling for shilling. Every employed Kenyan whose employer operates PAYE already receives this credit automatically. Self-employed individuals and those filing a personal income tax return claim it on their annual return.
How does annual income tax differ from monthly PAYE in Kenya?
Monthly PAYE uses the same progressive rates but applied to monthly income with monthly band thresholds and a KES 2,400 monthly relief. The annual calculator simply uses the twelve-month equivalents of those same figures. In practice, if your income is the same every month, summing twelve months of PAYE gives the same result as applying the annual bands once. The annual view matters when income varies across months, bonuses are paid, or you are reconciling a full-year self-assessment return.
Are insurance premiums or mortgage interest deductible from Kenya income tax?
Yes, Kenya tax law allows an insurance relief of 15% of qualifying premiums paid for life, education, or health insurance, up to KES 60,000 per year. Mortgage interest relief of 25% of interest paid on a loan used to acquire a residential property, up to KES 300,000 per year, may also apply. These reliefs reduce tax liability further beyond the personal relief. This calculator reflects only the standard personal relief; enter your net taxable income after any other approved deductions for a more precise result.