Income tax and WHT on professional and consulting fees.
Balance of tax due
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Income tax on bands
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WHT already withheld
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Withholding tax is a deposit, not the final bill
The single biggest misunderstanding among Kenyan consultants is that the 5 percent an agency lops off their invoice is the tax done and dusted. It is not. That deduction is withholding tax, and it works like a deposit against your eventual liability. A resident professional or consultant is taxed on net income using the same graduated individual bands that apply to salaried earners, the ones the KRA publishes for PAYE. Your real tax is computed on those bands. The 5 percent already withheld is then credited against it. So at year end you either pay the shortfall, or, if too much was withheld, you carry a credit or claim it back. This tool does that netting for you: income tax on the bands, less the WHT advance, equals the balance due.
Who this is for, and what it does not cover
This is built for the resident sole consultant invoicing professional or management fees, the kind of work that attracts the 5 percent resident WHT rate. If your clients are companies or agencies registered to withhold, they deduct it and remit it under your PIN, and you should see it reflected in your iTax ledger. The tool treats your fee income as already net of business expenses, so enter the figure after deducting genuine costs you can support with receipts, not your gross billings. It also does not model VAT. Once your taxable turnover crosses the registration threshold the calculator references elsewhere on this site, you must charge and account for VAT separately, and that sits on top of income tax entirely.
A KES 2 million consulting year, netted down
Say you billed KES 2 million in professional fees this year, all of it from clients who withheld the 5 percent. Using the annual bands and the personal relief that the rates this calculator applies, the income tax works out as follows.
| Line | How it is found | Amount |
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The withholding covered only a fifth of the eventual bill, which is the trap. Five percent of fees rarely matches a marginal band that climbs to 30 percent, so a consultant who spends every shilling that lands in the bank is left scrambling for KES 408,600 at filing time. The bar chart makes the shortfall plain: the WHT credit is a thin slice of the tax actually owed.
The practical habit that saves freelancers here is treating the WHT certificate as a receipt, not a settlement, and parking a further slice of every payment in a separate account for the balance. A useful rule of thumb at this income level is to set aside roughly a fifth of fees on top of the withholding, then true it up at filing. One edge case worth flagging: if your clients over-withhold or your deductible costs are high, the WHT can exceed the tax due, and the tool will show a refundable credit instead of a balance. These band figures and the 5 percent rate are the values this calculator applies under the current regime, and Kenya revises them through successive Finance Acts, so confirm the live position with the KRA before you file.
Do I still file a return if WHT was deducted on everything?
Yes. Withholding does not replace your annual return. You declare your total professional income, claim the WHT as a credit using the certificates issued through iTax, and pay any balance. Skipping the return because tax was withheld is a common and costly mistake, since the withholding rarely equals your full liability.
Should I register for turnover tax instead of the bands?
That depends on your turnover and your costs. Turnover tax is a flat charge on gross receipts for smaller businesses within a defined turnover band, and it ignores expenses. For a high-margin consultant the bands plus expense deductions can work out cheaper or dearer than turnover tax depending on the numbers, so model both and confirm eligibility with the KRA before choosing.