Withholding tax on dividends, interest, royalties, rent and fees.
Withholding tax
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WHT rate
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Net paid to recipient
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Tax collected at the point of payment
Withholding tax is income tax that the payer holds back from certain payments and sends straight to the Kenya Revenue Authority, instead of letting the recipient receive the full amount and settle the tax later. If you pay a consultant, a landlord, a shareholder, or a lender, you may be the one wearing the collector's hat. The duty sits with you as payer: deduct the right percentage, pay the recipient the balance, and remit the tax to KRA, generally by the twentieth day of the month after the deduction. This tool does the arithmetic for you. You pick the payment type and whether the recipient is resident in Kenya, and it looks up the rate, applies it to the gross, and shows both the tax withheld and the net the recipient actually receives.
Residency is the swing factor. The same kind of payment is usually taxed harder when it goes to a non-resident. Treat every rate below as the figure this calculator applies rather than a certified current statute, because Kenya has reworked withholding rates through recent Finance Acts. Confirm the live rate for your payment type with KRA before you deduct.
The rates this tool models
Across the payment types in the dropdown, the rates the calculator applies are: dividends at 5 percent to residents and 15 percent to non-residents; interest at 15 percent; royalties at 5 percent resident and 20 percent non-resident; management and professional fees at 5 percent resident and 20 percent non-resident; and rent of immovable property at 10 percent resident and 30 percent non-resident. The pattern is consistent, non-residents pay more, but the exact figures move over time, so verify them.
A worked example: KES 500,000 of rent to a resident landlord
Set the payment type to Rent of immovable property and the recipient to Resident, then enter a gross of KES 500,000. Using the rate this calculator applies, here is the breakdown.
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You hand the recipient the net amount and remit the withheld tax to KRA on their behalf. The chart splits the gross payment into the net paid and the tax withheld.
Final tax or just an advance?
One detail decides whether the recipient is done or not. For some payments the withholding tax is final, meaning the recipient has no further income tax to pay on that income and does not even declare it again. Qualifying dividends to residents are the usual example. For others, the tax withheld is creditable, an advance payment that the recipient sets against their final income tax bill for the year, claiming a refund if too much was held or topping up if too little. Professional fees typically fall in this creditable bucket. Knowing which category your payment falls into changes how the recipient files, so it is worth confirming with KRA for your specific income.
Withholding income tax is not withholding VAT
These two get muddled constantly because the names rhyme, but they are different taxes with different mechanics. Withholding income tax, the subject of this tool, can apply to a wide range of payers, uses many different rates depending on the payment type and the recipient's residency, and collects income tax. Withholding VAT is narrower: only KRA-appointed agents operate it, it is a flat deduction this tool elsewhere models at 2 percent of the taxable value, and it collects VAT, not income tax. A single transaction can even attract both, for example a professional fee where the payer withholds income tax on the fee and, if appointed, also withholds VAT on the VAT element. Keep them in separate mental boxes when you reconcile your returns.
What happens if I forget to withhold?
The obligation, and the exposure, rests with you as the payer. If you fail to deduct or to remit on time, KRA can pursue you for the tax that should have been withheld, plus penalties and interest, even though the money has already gone to the recipient. Recovering it from them afterward is your problem, not KRA's. Set a reminder for the twentieth and treat withholding as non-negotiable on every payment that qualifies.
Does the recipient get a record of the tax taken?
Yes. When you remit, the system generates a withholding tax certificate for the recipient. They use it to prove the tax already paid and to claim the credit on their own return where the withholding is not final. Always make sure the certificate reaches them, since without it they cannot easily reclaim the amount you deducted.