5% or 20% withholding on management and professional fees.
Withholding tax
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WHT rate
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Net to payee
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Why the person paying carries the obligation
Withholding tax on management, professional, training and consultancy fees is one of the quieter ways the KRA collects revenue, because the duty sits with the payer rather than the person doing the work. When a Kenyan business engages a consultant, an auditor, a trainer or an agency, it does not hand over the full invoice. It deducts a slice at source, pays the rest to the service provider, and remits the deducted amount to the Kenya Revenue Authority. This tool models exactly that split, so you can see what leaves the account in two directions before you sign off a payment.
The rate the calculator applies is 5 percent where the payee is a Kenyan resident and 20 percent where the payee is a non-resident. Those are the figures in the tool, and they reflect the long-standing structure for this fee category, but Finance Acts adjust withholding rates fairly often, so treat them as a starting point and confirm the current schedule on the KRA portal before you process a real payment.
The paperwork most payers forget
Deducting the money is only half the job. After remitting, the payer must issue a withholding tax certificate to the service provider through iTax. That certificate is what lets a resident consultant claim the 5 percent back as a credit, so withholding it, or forgetting it, causes a genuine dispute. A practical tip from people who run accounts payable in Kenya: agree in the contract whether your quoted fee is gross or net of WHT, because a consultant who expected KES 400,000 in the bank and receives less will assume an error rather than a tax deduction.
A KES 400,000 consultancy invoice, step by step
Take a resident IT consultant who invoices a Nairobi company KES 400,000 for a project. Using the resident rate this calculator applies, here is how the payment breaks down.
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The consultant has not lost the KES 20,000. It is an advance against their final income tax. When they file their annual return, they add the WHT certificate, and the 5 percent reduces whatever they ultimately owe. If their final liability turns out lower than the tax already withheld across the year, the surplus can be refunded or carried forward. Switch the payee to non-resident and the same KES 400,000 fee loses KES 80,000 at 20 percent, leaving KES 320,000, and for a non-resident that deduction is generally treated as a final tax rather than a credit.
Where the non-resident rate can drop
The 20 percent headline for non-residents is not always the final word. Kenya has double taxation agreements with a number of countries, and where one applies, the treaty rate on technical or management fees can be lower than the domestic 20 percent. Claiming it usually needs proof of tax residence in the treaty country and the right disclosure on iTax. This calculator shows the plain domestic rate, so if you are paying an overseas firm, check whether a treaty applies before you assume the full 20 percent bites.
Does WHT apply to every payment to a consultant?
No. The withholding regime targets specific fee types, mainly management, professional, training and consultancy services. A straight purchase of goods, or a reimbursement of documented expenses, is not the same thing. If part of an invoice is a genuine cost pass-through and part is a fee, only the fee portion should carry the deduction, which is why clean invoicing that separates the two saves arguments later.
What happens if the payer does not deduct?
The obligation to account for the tax does not vanish if a payer skips the deduction. The KRA can pursue the payer for the unremitted amount, often with penalties and interest on top, and the payer may struggle to recover it from a contractor who has already been paid in full. That asymmetry is the reason the calculator frames the WHT from the payer side first.
Is the 5 percent the consultant's total tax?
For a resident, no. The 5 percent is an instalment, not a final settlement. The consultant still computes income tax on their full profit for the year and the withheld 5 percent is netted off that bill. Someone with high earnings may owe more than the WHT collected, while someone with low net profit may end up owed a refund.