Tax Rates
PAYE, Fringe Benefit Tax, SHIF, NHIF, NSSF and Housing Levy parameters for 2024.
PAYE
PAYE rates in effect from 1 July 2023:
| Monthly Taxable Pay (Ksh) | Annual Taxable Pay (Ksh) | Rate of Tax (%) |
|---|---|---|
| Up to 24,000 | Up to 288,000 | 10.0 |
| 24,001 - 32,333 | 288,001 - 388,000 | 25.0 |
| 32,334 - 500,000 | 388,001 - 6,000,000 | 30.0 |
| 500,001 - 800,000 | 6,000,001 - 9,600,000 | 32.5 |
| Above 800,000 | Above 9,600,000 | 35.0 |
PAYE rates in effect from 1 January 2021 up to 30 June 2023:
| Monthly Taxable Pay (Ksh) | Annual Taxable Pay (Ksh) | Rate of Tax (%) |
|---|---|---|
| Up to 24,000 | Up to 288,000 | 10 |
| 24,001 - 32,333 | 288,001 - 388,000 | 25 |
| Above 32,333 | Above 388,000 | 30 |
Other PAYE parameters:
| Monthly Limit (Ksh) | Annual Limit (Ksh) | Effective Since | |
|---|---|---|---|
| Personal Relief | 2,400 | 28,800 | 25 April 2020 |
| Insurance Relief | 5,000 | 60,000 | 1 January 2007 |
| Allowable Pension Fund Contribution | 20,000 | 240,000 | 1 January 2006 |
| Allowable HOSP Contribution | 0 | 0 | 1 January 2021 |
| Affordable Housing Relief | 9,000 | 108,000 | 1 July 2018 |
| Allowable Owner Occupier Interest | 25,000 | 300,000 | 1 January 2017 |
| Disability Exemption | 150,000 | 1,800,000 | 10 March 2010 |
As from 1 January 2022 NHIF contributions qualify for insurance relief.
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 2024 as published by KRA:
| Quarter | Interest Rate (%) |
|---|---|
| January to March | 15 |
| April to June | 16 |
| July to September | 16 |
| October to December | 16 |
Market interest rates for 2023:
| Quarter | Interest Rate (%) |
|---|---|
| January to March | 9 |
| April to June | 10 |
| July to September | 11 |
| October to December | 13 |
SHIF
The Social Health Insurance Act, 2023 introduced the Social Health Insurance Fund (SHIF) that effectively replaces the NHIF. Starting 1 October 2024, all employees are expected to pay 2.75% of their gross monthly salary to this fund. Employers are required to deduct the contributions and remit them to the Social Health Authority (SHA).
Note that, unlike NHIF contributions, SHIF contributions do not qualify for insurance relief.
NHIF
NHIF rates in effect from 1 April 2015 to 30 September 2024:
| 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
Under the NSSF Act of 2013, contributions to NSSF are divided into Tier I and Tier II. Organisations may opt out of Tier II contributions if they have an alternative pension scheme in place. The employer and employee each contribute 6% of pensionable pay, subject to the following monthly limits.
February 2024 onwards:
| Tier | Pensionable Pay |
|---|---|
| I | Up to 7,000 |
| II | 7,001 - 36,000 |
Up to January 2024:
| Tier | Pensionable Pay |
|---|---|
| I | Up to 6,000 |
| II | 6,001 - 18,000 |
Housing Levy
Affordable housing levy was first introduced in July 2023 by the Finance Act of 2023. It ceased to be payable in January 2024 following a successful legal challenge. It was reintroduced two months later under the Affordable Housing Act of 2024.
With effect from 19 March 2024, the employee and employer are each required to pay 1.5% of monthly gross salary as housing levy. The employee's payment qualifies for affordable housing relief.