Your payslip can contain PAYE, NSSF, health contributions, the Affordable Housing Levy, pension contributions and other deductions. That is why the question “How much PAYE should I pay?” cannot always be answered by multiplying gross salary by one tax rate.
Kenya uses graduated PAYE bands. Different slices of taxable monthly income are taxed at different percentages, then applicable reliefs reduce the tax payable.
Current monthly PAYE bands
The Kenya Revenue Authority currently publishes the following monthly individual income-tax bands:
| Monthly taxable income slice | Rate |
|---|---|
| First KSh24,000 | 10% |
| Next KSh8,333 | 25% |
| Next KSh467,667 | 30% |
| Next KSh300,000 | 32.5% |
| Amount above KSh800,000 per month | 35% |
KRA also lists personal relief of KSh2,400 per month for eligible resident individuals. Other reliefs or deductions can apply depending on the taxpayer’s circumstances and the law in force.
Step 1: start with employment income, not just basic salary
Employment income can include more than the basic salary shown in an offer letter. Cash allowances and taxable benefits may form part of taxable employment income. Some benefits have their own valuation rules.
For a clean PAYE check, start with the taxable employment-income figure rather than assuming the basic salary is the entire tax base.
Step 2: identify allowable deductions before tax
KRA’s PAYE guidance lists deductions that can reduce taxable employment income when the relevant conditions are met. These include contributions to registered pension or provident arrangements within the applicable limits, qualifying mortgage interest and other deductions provided by law. KRA’s current guidance also identifies the Affordable Housing Levy and SHIF contributions among deductions taken into account when determining taxable employment income.
This is why two people with the same gross pay can end up with different taxable pay if their qualifying deductions differ.
Step 3: apply the tax bands progressively
Once taxable monthly pay is determined, split it across the bands rather than choosing one percentage for the whole salary.
For example, if taxable monthly income is above KSh32,333, the first KSh24,000 is taxed at 10%, the next KSh8,333 at 25%, and only the balance above that point begins entering the 30% band. Higher rates apply only when the relevant higher thresholds are reached.
Step 4: subtract applicable reliefs
After calculating gross tax from the bands, subtract applicable tax reliefs. For an eligible resident individual, personal relief is currently KSh2,400 per month. Insurance relief and other statutory reliefs may apply where the conditions are satisfied.
The result after reliefs is the PAYE due, subject to the taxpayer’s actual facts and any special rules.
Why your PAYE and your take-home salary are different questions
PAYE is only one line on a payslip. Your net salary is affected by other deductions and contributions too. So a “PAYE calculator” and a “net salary calculator” are not necessarily the same thing.
| Item | What it affects |
|---|---|
| PAYE | Income tax withheld by the employer |
| NSSF / qualifying pension | Retirement contribution and, where applicable, taxable-pay calculation |
| SHIF | Health contribution and taxable-pay calculation under current KRA guidance |
| Affordable Housing Levy | Separate statutory deduction and taxable-pay calculation under current KRA guidance |
| Loan/SACCO deductions | Reduce cash received but are not automatically tax deductions |
Five common PAYE mistakes
- Applying the highest rate to the whole salary. Kenya’s bands are progressive.
- Using gross salary without checking taxable benefits or allowable deductions.
- Forgetting personal relief.
- Confusing a payroll deduction with a tax deduction. Not every amount taken from your payslip reduces taxable income.
- Using old bands. Tax rules can change through Finance Acts and other legislation.
How to check your own payslip
Use the taxable-pay figure on the payroll calculation, apply the current KRA bands, check allowable deductions, then compare the reliefs used. If the result differs materially from your payslip, ask payroll to explain the tax base and deductions rather than assuming the tax rate alone is wrong.
For broader money planning after payroll, use AMKA’s monthly budget tool and Kenya tax hub. The budget should start from the cash that actually reaches you, while your tax review should start from the statutory calculation.