Understanding PAYE in Kenya: A Simple Guide

Pay As You Earn (PAYE), as the name suggests, you pay this tax as you earn. In other words PAYE is an income related tax that is deducted at source by your employee and remitted to the revenue authority. It is the single biggest deduction most employees see. On a lighter note, it is the amount on your payslip that you never get to touch because it magically disappears, but you get to experience it's use through the infrasture created and funded by the government.

It's a graduated tax, meaning the more you earn, the higher your tax rate on that portion of income.

The Brackets

Our calculator handles this for you, but the system works in "brackets." For example (and these are just examples):

• The first 24,000 KES is taxed at 10%.
• The next 8,333 KES is taxed at 25%.
• And so on, up to 35%.
Click Here to see How PAYE is Calculated

Then, you get a "Personal Relief" of 2,400 KES per month, which is a direct credit against the tax you owe. It's complicated, which is why a calculator is your best friend!