The tax rates for employment income, PAYE, have been reviewed downwards. The new rates, which will be effective from 2017.will attract tax based on how much money you earn.
From April 2017, these new rates will be effected, meaning your pay slip will be affected.
The annual individual income tax bands have been widened after more than two decades. This will be a welcome relief to many employees. PAYE will be calculated as follows:
first Ksh. 134,164 – 10%
next Ksh. 126,403 – 15%
next Ksh. 126,403 – 20%
next Ksh. 126,403 – 25%
income over Ksh. 513,373 – 30%
Note that tax relief is Ksh. 1,280 per month and Ksh. 15,360 per annum.
If you earn say Kshs 100,000/= gross per month, your PAYE will be as follows
11,180.33/= @10% = 1,118.03/=
10,533.58/= @15% = 1,580.04/=
10,533.58/= @20% = 2,106.72/=
10,533.58/= @25% = 2,633.40/=
57,218.93/= @30% = 17,165.68/=
Total – Kshs 23,603.87/= with tax relief of Kshs 1,280/=
You can calculate your tax if your monthly pay is 90, 000, 80, 000, 70,000 and below.
People who earn less than Ksh 10,000 are not affected by tax but they are required to pay NSSF and NHIF, which are mandatory for every employee in Kenya.
Following the new rates, several Kenyans have expressed their joy, especially those earning less than Ksh 100,000.This is because the tax mainly affected people who pocket more than Ksh130, 000 per month. They pay more tax, while those with meager salaries were spared.