Late-payment penalty and monthly interest on overdue tax.
Total now payable
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Tax due
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Penalty (5%)
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Interest (1%/mo)
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Two separate failures, two separate charges
It is worth being precise about what this calculator does and does not cover, because the Kenya Revenue Authority treats filing late and paying late as different sins with different consequences. Late filing, missing the deadline to submit a return, carries its own penalty regardless of whether tax is owed. Late payment, the focus of this tool, is about money that should have reached the KRA but did not. You can file on time and still pay late, or file late on a return that turns out to owe nothing, and the two are assessed independently. This calculator models the late-payment side: a one-off penalty on the unpaid tax plus interest that accrues for as long as the balance sits unpaid.
On the figures this tool applies, that means a 5 percent penalty charged once on the tax due, and interest at 1 percent for each month the amount is overdue. Both are drawn from the late-payment provisions of the Tax Procedures Act as modelled here. Because the exact percentages and how they are administered have shifted across recent Finance Acts, treat these as the rates the calculator applies and confirm the current position with the KRA before settling a real liability.
How the interest stacks up month by month
The penalty is a fixed slice that does not grow: 5 percent of the original tax, applied the moment the payment is late, and that is the end of it. Interest is the part that compounds your regret over time. This calculator treats it as simple interest, 1 percent of the original tax for every month overdue, added in a straight line rather than charging interest on the interest. That is a reasonable working estimate, though in practice the KRA may calculate interest with more precision, sometimes on the running balance, so the real figure can drift slightly from a simple month-times-one-percent sum. The practical lesson holds either way: a debt that sits for a year quietly grows, and the longer you leave it the worse the arithmetic gets.
Six months late on KES 100,000
Picture a tax bill of KES 100,000 that goes six months past its due date. The penalty is 5 percent, a flat KES 5,000. The interest is 1 percent a month, so KES 1,000 each month for six months, KES 6,000 in total. Add those to the original tax and you owe KES 111,000. The breakdown below uses the rates this calculator applies.
| Component | Amount (KES) |
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The chart above shows how the total splits between the original tax, the one-time penalty, and the accumulated interest.
When a waiver is worth asking for
Penalties and interest are not always set in stone. The KRA has a process for applying to have them waived or reduced where there is a genuine reason for the delay, and it has periodically run amnesty windows that wipe interest and penalties for taxpayers who clear the underlying principal. The principal tax itself is rarely forgiven, so the realistic play is to pay the core amount as fast as you can and then apply for relief on the add-ons, with a clear explanation and supporting documents. A common and costly mistake is to ignore a small liability because the numbers look trivial, only to watch the penalty and a year of interest turn it into a real debt. If cash is the problem, ask about a payment plan early rather than letting the clock run. This tool is useful precisely for that conversation: it lets you see how much delay is actually costing before you decide what to do.
Frequently asked
Does the 5 percent penalty get charged again each month?
No. The penalty modelled here is a one-off, applied a single time to the original tax. It is the interest, at 1 percent a month, that keeps accruing. People sometimes assume the penalty repeats monthly and overestimate the bill; under the structure this calculator uses, only the interest grows with time.
Will paying part of the tax stop the interest?
Partly. Interest accrues on what remains unpaid, so a part payment reduces the base the interest runs on going forward. This calculator assumes a single unpaid amount, so for a real situation involving instalments you would recalculate the interest on the reducing balance. The takeaway is that any payment, even a partial one, slows the growth of the debt.
Is the penalty the same for every tax type?
Not necessarily. Different taxes can carry different late-filing penalties, and PAYE in particular has its own filing penalty regime. This calculator applies a single late-payment penalty and interest figure as a general estimate. For a specific tax head, confirm the applicable penalty with the KRA, since the rules vary by tax.