Pay & working terms · 3 min read
PAYE in Kenya: how the monthly bands work
Understand taxable pay, progressive bands and personal relief before comparing tax on two salary offers.
Understand taxable pay, progressive bands and personal relief before comparing tax on two salary offers.
Begin with taxable employment income
PAYE is the tax employers deduct from employment income under KRA’s rules. The calculation begins with taxable income, which is not always identical to the cash gross figure printed at the top of a payslip.
Identify taxable benefits and allowable deductions first. KRA’s December 2024 notice changed the treatment of SHIF, housing levy and certain other items. Using an older method can produce a different result even if the headline PAYE bands are unchanged.
Apply each rate only to its band
KRA’s monthly table taxes the first KES 24,000 at 10%, the next KES 8,333 at 25%, and the next KES 467,667 at 30%. The next KES 300,000 is taxed at 32.5%, with taxable income above KES 800,000 at 35%.
A person whose income reaches the 30% band still has the lower portions taxed at 10% and 25%. Do not multiply the entire taxable salary by the highest applicable percentage. The published monthly band widths are the basis used by the Work.ke calculator.
Apply relief after calculating band tax
KRA lists monthly personal relief of KES 2,400 for resident individuals. This reduces the calculated tax, subject to the applicable eligibility, and does not make PAYE negative in our standard estimate.
Other reliefs and exemptions depend on the person and supporting conditions. The calculator deliberately covers a stated standard case and excludes additional insurance relief, disability exemptions and non-resident treatment. Use the official guidance for those circumstances.
Follow a numerical example
For KES 44,875 taxable monthly income, the first band produces KES 2,400 tax and the second KES 2,083.25. The remaining KES 12,542 is taxed at 30%, producing KES 3,762.60. Total tax before relief is KES 8,245.85; after KES 2,400 personal relief, PAYE is KES 5,845.85.
This is an arithmetic example using the published bands, not a personal KRA assessment. To work backwards to take-home pay, you still need the gross earnings and deductions that produced taxable income.
Resolve a payroll difference in order
Check the pay period first, then taxable income, then each tax band and the relief applied. A discrepancy in taxable pay will carry through the rest of the calculation, so compare that input before adjusting the tax formula.
Keep your itemised payslip and use official KRA guidance if a benefit or deduction has a special treatment. Ask payroll for a breakdown rather than relying on a single percentage quoted in a message.
Sources and further reading
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