Withholding tax on payments to digital-marketplace suppliers.
Withholding tax
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WHT rate
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Net to supplier
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What counts as a digital marketplace supply
A digital marketplace is any online or electronic platform that lets people sell goods or services to each other. Think of an app that connects riders with drivers, a site that lists rooms for short stays, a freelancing portal, or a storefront that takes orders and routes payment. When a buyer pays a seller through one of these platforms, Kenyan law treats the operator or the appointed payer as a withholding agent. They are expected to hold back a slice of the payment as withholding tax, send that slice to the Kenya Revenue Authority, and pass the rest to the supplier. This tool models that single deduction so you can see, before money moves, what the supplier actually receives.
The rate splits on one question: is the supplier tax-resident in Kenya or not. For a resident supplier the rate this calculator applies is 5 percent of the gross payment. For a non-resident supplier it applies 20 percent. That four-fold gap is deliberate. A resident will file a Kenyan return and reconcile the withheld amount against their final liability, so the 5 percent is an advance payment. A non-resident often has no other Kenyan filing, so the 20 percent is designed to capture more at source. These are the figures the calculator uses today, and because digital taxation in Kenya has shifted repeatedly through successive Finance Acts, you should confirm the current rate and the list of covered platforms with the KRA before you rely on a number.
A KES 300,000 platform payout, line by line
Say a Kenyan-resident graphic designer earns KES 300,000 in a month through a freelancing platform that has been appointed as a withholding agent. Using the rate this calculator applies to residents, here is what each party sees.
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Had the same payment gone to a non-resident supplier, the 20 percent rate would have lifted the deduction to KES 60,000 and dropped the net to KES 240,000. The bar below contrasts the two outcomes on the identical KES 300,000.
Why this is not the same as the old Digital Service Tax
People often muddle three different levies. Digital marketplace withholding tax, the one modelled here, is a deduction on the payment to a supplier who sells through a platform. The Digital Service Tax, a 1.5 percent charge that used to sit on the gross value of digital services, has been repealed. In its place sits the Significant Economic Presence tax, aimed at non-resident businesses earning from Kenyan users, which works on a deemed margin rather than a flat skim. If you are a non-resident platform owner rather than an individual seller, the SEP rules, not this withholding, are likely the ones that touch you. Treat these as separate questions and confirm which applies with the KRA, because the boundaries have moved more than once.
Who should use this tool, and a trap to avoid
This is for two groups. Sellers who want to know their true take-home from a gig before accepting it, and platform operators or finance teams sizing the tax they must remit. A practical tip for sellers: the withheld amount is not lost. A resident supplier claims it as a credit on the annual return, so if your final liability comes to less than what was withheld across the year, you are owed a refund. Keep every withholding certificate the platform issues, because the KRA reconciles your claim against agent filings, and a missing certificate is the most common reason a genuine credit gets disallowed.
The trap is assuming every platform withholds. Only appointed agents do. If you sell through a small platform that has not been appointed, no tax is deducted at source, which feels like more money but simply means the full liability lands on you at filing time. Plan for it rather than being surprised.
Does the withholding tax apply to the platform's commission or to the full sale?
It applies to the payment made to the supplier, which is the seller's share after the platform takes its own commission. The platform's commission is its own income and is handled separately. So if a sale is KES 350,000 and the platform keeps KES 50,000, the 5 percent resident rate this tool applies is charged on the KES 300,000 reaching the seller, giving KES 15,000.
I am a resident but the platform withheld 20 percent. What now?
That points to the platform classifying you as non-resident, often because your tax details were never confirmed. Update your residency and PIN with the platform so future payments use the 5 percent resident rate this calculator models. For the over-deduction already made, you are not out of pocket permanently. The excess becomes a credit on your annual return and can be refunded once the KRA matches it to the agent's filing.