Monthly PAYE using the KRA bands and personal relief.
Monthly PAYE
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Tax before relief
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Personal relief
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Effective rate
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Per-band breakdown
10%
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25%
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30%
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32.5%
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35%
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Your breakdown
Updates live as you type
Item
Amount
Worked example
Take an employee whose monthly taxable pay is KES 80,000. This is pay after the allowable deductions (NSSF, SHIF, the Affordable Housing Levy and any pension contribution) have already been removed, so the bands apply straight to it. PAYE is worked out band by band, the lower slices filling first. The first KES 24,000 is taxed at 10%, the slice from 24,000 to 32,333 at 25%, and the remaining 47,667 (from 32,333 up to 80,000) at 30%.
Band
Slice (KES)
Rate
Tax (KES)
First 24,000
24,000
10%
2,400.00
24,000 to 32,333
8,333
25%
2,083.25
32,333 to 80,000
47,667
30%
14,300.10
Tax before relief
18,783.35
Less personal relief
2,400.00
PAYE payable
16,383.35
After the KES 2,400 monthly personal relief the PAYE is KES 16,383.35, an effective rate of about 20.5% on the 80,000 of taxable pay. The chart below splits that taxable pay into PAYE and the part the employee keeps.
How it is calculated
Kenya PAYE is a progressive tax with five monthly bands set by the Kenya Revenue Authority: 10% on the first KES 24,000, 25% on the next 8,333, 30% up to 500,000, 32.5% up to 800,000, and 35% on anything above 800,000. Each band only taxes the income that falls inside it, so a raise never pulls your whole salary into a higher rate. The tax is computed on taxable pay, which is gross pay less allowable deductions such as NSSF, SHIF, the Affordable Housing Levy and registered pension contributions. Once the band tax is added up, the KES 2,400 monthly personal relief is subtracted as a credit, which is exactly the 10% due on the first 24,000 and makes that first slice effectively tax-free. Insurance relief of 15% of qualifying premiums, capped at KES 5,000 a month, can reduce the figure further. The result is the PAYE your employer withholds and remits to the KRA by the ninth of the following month.
Frequently asked questions
How is PAYE calculated in Kenya?
PAYE applies five progressive bands to your monthly taxable pay: 10% on the first KES 24,000, 25% on the next KES 8,333, 30% up to KES 500,000, 32.5% up to KES 800,000, and 35% above. The personal relief of KES 2,400 a month is then subtracted, which makes the first KES 24,000 effectively tax-free.
What deductions reduce taxable pay before PAYE is computed in Kenya?
Before PAYE is calculated, the following amounts are deductible from gross pay: the mandatory NSSF contribution, the Social Health Insurance Fund (SHIF) contribution, the Affordable Housing Levy at 1.5 percent of gross pay, and contributions to a registered pension scheme up to a monthly limit. Only the resulting taxable pay is then run through the five PAYE bands. Entering the after-deduction figure in this calculator gives you the correct PAYE.
What is the difference between the PAYE effective rate and the marginal rate?
Your marginal rate is the PAYE band that the top slice of your income falls into, which for KES 80,000 of taxable pay is 30 percent. Your effective rate is total PAYE divided by total taxable pay, which at KES 80,000 works out to about 20.5 percent because the lower slices were taxed at 10 and 25 percent. The effective rate is always lower than the marginal rate under a progressive system and is the more useful number for budgeting your take-home pay.
When does the 35% PAYE band apply in Kenya?
The 35 percent band applies to monthly taxable income above KES 800,000, which is KES 9.6 million a year. Very few salaried employees reach this band, but executives with large bonus payments or directors with high declared remuneration may have a portion of their monthly pay taxed at this top rate. Only the income above the KES 800,000 monthly threshold is taxed at 35 percent; everything below it is taxed at the lower bands as usual.