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What is PAYE?

PAYE is a system of tax collection whereby employers are required to deduct tax from the employment income of their employees and remit the tax to the Kenya Revenue Authority.

Taxable Employment Income

• Taxable employment income includes, all cash payments however described and the value of non-cash benefits (exceeding Ksh 3,000 per month).

• Cash pay includes; wages, salary, sick pay, leave pay, fees, commissions, bonuses, service gratuity, allowances, director’s fees, overtime, pension, entertainment and any other payments received in respect of employment

• Any excess mileage reimbursement to employee based on the rates that are higher than AA Kenya rates will be taxable on the employee. Effective 1st July 2023.

• Club entrance and subscription fees shall be treated as taxable income to the extent that the expense has been allowed against the employer’s income.

• Charged on both Residents and Non-Residents

• 1Tax Accounted for by Employers Only

Who is eligible for PAYE registration?

Any person who pays emoluments to an employee(s) is required to register for the PAYE obligation, upon which the person is required to:

• Deduct tax from the employee(s) emoluments 

• Remit the tax deducted to the Kenya Revenue Authority