Last updated: 25 June 2026
PAYE is the income tax an employer deducts from an employee’s taxable employment income and remits to KRA. For Kenyan SMEs, PAYE is one of the most important payroll items to check every month because errors affect payslips, statutory payments, employee trust and compliance records.
What goes into PAYE calculation?
A simple PAYE estimate starts with gross monthly salary, then adjusts for taxable benefits and allowable deductions. Common payroll deductions that may affect taxable pay include NSSF, SHA/SHIF, Affordable Housing Levy, qualifying pension contributions and other items allowed under current tax rules.
Monthly PAYE bands used for planning
- First KSh 24,000 at 10%
- Next KSh 8,333 at 25%
- Next KSh 467,667 at 30%
- Next KSh 300,000 at 32.5%
- Amount above KSh 800,000 at 35%
Resident employees may also receive monthly personal relief in the PAYE calculation. Non-resident employees are treated differently, so employers should confirm the correct treatment before final filing.
Simple PAYE workflow
- Confirm gross pay, allowances and taxable benefits.
- Deduct allowable employee contributions and reliefs where applicable.
- Apply the PAYE tax bands to taxable pay.
- Apply personal relief for resident employees.
- Review the final PAYE together with NSSF, SHA, Housing Levy, HELB and other deductions.
For quick planning, use the Reworked Kenya Net Pay Calculator. For final payroll processing, Reworked can help prepare payroll summaries, payslips and monthly compliance files.
Disclaimer: This guide is for general planning only. Statutory rates and interpretation may change. Confirm final obligations through official portals or request professional payroll support.
Request payroll support or email info@reworked.co.ke.
Employer questions
PAYE questions from Kenyan employers
These answers explain the planning basics. Confirm the final employee treatment and filing position before submission.
When is PAYE due in Kenya?
KRA states that employers should file the PAYE return and remit the tax deducted on or before the 9th day of the following month.
What is the current monthly personal relief?
Current KRA guidance gives resident individuals personal relief of KES 2,400 per month. Non-resident treatment is different and should be checked before payroll is finalised.
Which deductions may affect taxable employment income?
KRA guidance includes employee Affordable Housing Levy and SHIF contributions, together with qualifying pension, mortgage interest and post-retirement medical fund amounts within the applicable limits. Supporting documents and the employee's circumstances still matter.
Can I use an online PAYE estimate for filing?
Use an online estimate for planning and checking inputs. Final PAYE should be reviewed against the employee's actual benefits, deductions, residence status, reliefs and current KRA requirements before filing.