Tax Rates

PAYE, Fringe Benefit Tax, NHIF and NSSF parameters for 2018.

PAYE

PAYE rates in effect from 1st January 2018:

Monthly Taxable Pay (Ksh) Annual Taxable Pay (Ksh) Rate of Tax (%)
Up to 12,298 Up to 147,580 10
12,299 - 23,885 147,581 - 286,623 15
23,886 - 35,472 286,624 - 425,666 20
35,473 - 47,059 425,667 - 564,709 25
Above 47,059 Above 564,709 30

Other PAYE parameters:

  Monthly Limit (Ksh) Annual Limit (Ksh) Effective Since
Personal Relief 1,408 16,896 1st January 2018
Insurance Relief 5,000 60,000 1st January 2007
Allowable Pension Fund Contribution 20,000 240,000 1st January 2006
Allowable HOSP Contribution 4,000 48,000 1st January 1999
Owner Occupier Interest 25,000 300,000 1st January 2017

PAYE rates that were in effect up to 31 December 2017:

Monthly Taxable Pay (Ksh) Annual Taxable Pay (Ksh) Rate of Tax (%)
Up to 11,180 Up to 134,164 10
11,181 - 21,714 134,165 - 260,567 15
21,715 - 32,248 260,568 - 386,970 20
32,249 - 42,782 386,971 - 513,373 25
Above 42,782 Above 513,373 30

Personal relief was Ksh 1,280 per month or Ksh 15,360 per annum.

Fringe Benefit Tax

The employer is required to pay fringe benefit tax on any loans advanced to employees at an interest rate below the prevailing market interest rate. This applies to all loans issued after 11 June 1998, and to those issued on or before 11 June 1998 but whose terms and conditions have changed after this date.

Market interest rates for 2018 as published by KRA:

Quarter Interest
Rate (%)
January to March 8
April to June -
July to September -
October to December -

Market interest rates for 2017:

Quarter Interest
Rate (%)
January to March 8
April to June 8
July to September 9
October to December 8

NHIF

NHIF rates in effect from 1 April 2015:

Gross Pay (Ksh) Deduction (Ksh)   Gross Pay (Ksh) Deduction (Ksh)
Up to 5,999 150   40,000 - 44,999 1,000
6,000 - 7,999 300   45,000 - 49,999 1,100
8,000 - 11,999 400   50,000 - 59,999 1,200
12,000 - 14,999 500   60,000 - 69,999 1,300
15,000 - 19,999 600   70,000 - 79,999 1,400
20,000 - 24,999 750   80,000 - 89,999 1,500
25,000 - 29,999 850   90,000 - 99,999 1,600
30,000 - 34,999 900   100,000 and above 1,700
35,000 - 39,999 950      

NSSF

New Rates

The new NSSF Act came into effect on 10th January 2014. Under this act contributions to NSSF are divided into two tiers. To start with, both Tier I and Tier II contributions must be paid to the NSSF but there is a procedure for opting out of the latter.

The employee and employer each contribute 6% of pensionable pay to NSSF subject to certain limits for each tier. These limits will change each year. For the first year they are as follows:

Tier Pensionable Pay
I Up to 6,000
II 6,001 - 18,000

The effective date of the new NSSF rates remains uncertain due to ongoing litigation.

Old Rates

Under the old NSSF Act, the employee and the employer contributed 5% of gross pay each. The combined employee and employer contribution for each pay period was subject to the following limits:

Pay
Frequency
Maximum
Contribution
(Ksh)
Monthly 400
Biweekly 200
Weekly 100