Taxable per diem above the daily exemption.
PAYE on per diem
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Taxable per day
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Total taxable
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When a travel allowance becomes taxable pay
Per diem, sometimes called subsistence allowance, is the money an employer pays staff to cover meals and incidentals while travelling for work. Kenya treats a daily slice of it as a genuine reimbursement and leaves it tax-free, on the logic that you are out of pocket for the trip. Above that daily line, the tax authority sees the extra as disguised income and taxes it. This tool isolates that taxable slice and works out the PAYE on it.
The exempt amount this calculator applies is KES 10,000 per day. That figure was raised substantially by recent Finance Act changes, having sat far lower for years, which is exactly why it pays to check the current number rather than relying on an old payroll memory. Everything up to KES 10,000 a day is free, and only the excess crosses into the tax net.
Per day first, then totalled across the trip
The exemption is a daily allowance, not a trip allowance, so the calculation runs per day. The tool takes your daily per diem, removes KES 10,000, and multiplies the remainder by the number of days. A modest daily overage adds up over a long trip, while a single day slightly over the line barely registers.
A five-day trip at KES 15,000 a day
Suppose you are paid KES 15,000 a day for a five-day assignment. The first KES 10,000 each day is exempt, leaving KES 5,000 a day taxable, or KES 25,000 across the trip. The tool then applies PAYE to that KES 25,000. The steps below use the rates this calculator applies.
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The KES 2,650 figure comes from running KES 25,000 through the lower PAYE bands on its own, which is how the tool models it. The chart shows how each day's KES 15,000 splits into the tax-free portion and the taxable portion.
Why your real payslip tax may be higher
Here is the honest caveat that matters most. This tool taxes the per diem excess on its own, starting at the bottom PAYE band and with no personal relief applied, because it has no salary input. On an actual payroll, the taxable per diem is added to your normal monthly income, so it stacks on top of your salary and is taxed at your marginal rate. For someone already in the 30 percent band, the KES 25,000 excess would attract closer to KES 7,500 in tax, not KES 2,650. Read this figure as the standalone tax on the allowance, useful for understanding the structure, and expect the integrated payroll number to be higher for most earners.
A practical tip for employers: keep per diem at or below the daily exempt line wherever the genuine cost allows, and reimburse larger one-off expenses such as flights or hotels separately against receipts, since those are not per diem at all. The common mistake is paying a generous round daily figure and creating a small taxable trickle on every trip. This calculator is for HR and finance teams setting travel policy, and for employees who want to understand why a chunk of a big allowance showed up as taxable. The KES 10,000 line follows the rates this calculator applies, and because Kenya has moved this threshold recently, confirm the current daily exemption with the Kenya Revenue Authority before fixing a policy rate.
Does the exemption depend on travelling away from my normal workplace?
Per diem is meant for work travel away from your usual station, typically an overnight or out-of-town trip. A daily lunch allowance at your normal office is treated differently and may fall under separate meal-benefit rules. Confirm with the KRA how your specific allowance is classified, since the label on the payslip does not by itself decide the tax.
If I spend the whole per diem, is any of it still taxable?
Yes. The exemption is a flat daily amount, not a test of what you actually spent. Anything paid above KES 10,000 a day is taxable even if you have receipts showing you spent it all, because the structure uses a fixed threshold rather than reimbursing actual cost. Genuine actual-cost reimbursements against receipts are handled separately.
Does the tax-free portion still count toward my pension or NSSF?
The exempt per diem is not employment income for PAYE, so it generally does not form part of pensionable pay either. Only amounts that become taxable can feed into pay-based calculations, and the precise treatment can vary, so verify with the KRA and your scheme rules.