KRA PAYE Tax Bands Kenya 2026 - Complete Breakdown

Understanding PAYE Tax Bands in Kenya (2026)

Pay As You Earn (PAYE) is the primary method through which the Kenya Revenue Authority (KRA) collects income tax from employed individuals. Every employer in Kenya is legally required to deduct PAYE from employees' salaries and remit it to KRA by the 9th of the following month. Understanding the current PAYE tax bands Kenya 2026 is essential for both employers running payroll and employees who want to know exactly how their salary is taxed.

Kenya uses a progressive tax system, which means your income is not taxed at a single flat rate. Instead, different portions of your taxable income fall into different bands, each taxed at a progressively higher rate. This ensures that higher earners contribute a proportionally larger share, while lower earners keep more of their money.

The 5 PAYE Tax Bands for 2026

The following table shows the current KRA PAYE tax bands applicable in Kenya for the 2026 tax year. These rates are applied to your monthly taxable income after deducting NSSF contributions and Housing Levy from gross pay.

These are the same bands gazetted under the Income Tax Act. They apply uniformly to all employment income earned in Kenya, including allowances that form part of taxable pay.

How Progressive Taxation Works

A common misconception is that if your salary falls in the 30% band, your entire income is taxed at 30%. That is not how progressive taxation works. Instead, only the portion of your income that falls within each band is taxed at that band's rate.

For example, if your taxable income is KES 50,000 per month:

• The first KES 24,000 is taxed at 10%
• The next KES 8,333 (from 24,001 to 32,333) is taxed at 25%
• The remaining KES 17,667 (from 32,334 to 50,000) is taxed at 30%

This progressive structure means your effective tax rate is always lower than the highest band your income reaches.

What Counts as Taxable Income?

Before applying the tax bands, you need to determine your taxable income. Taxable income is your gross salary minus certain statutory deductions:

1. NSSF Contribution: 6% of gross salary for Tier I (up to KES 9,000) plus 6% of gross between KES 9,001 and KES 108,000 for Tier II
2. Housing Levy (Employee Share): 1.5% of gross salary

After subtracting these deductions from your gross salary, you arrive at the taxable income on which PAYE is calculated.

Personal Relief

Every resident individual taxpayer in Kenya is entitled to a personal relief of KES 2,400 per month (KES 28,800 per year). This amount is subtracted from the calculated PAYE to arrive at the final tax payable. If your calculated tax is less than KES 2,400, you pay zero PAYE — there is no negative tax refund through payroll.

PAYE Calculation Examples

Let's work through three real-world salary examples to show exactly how PAYE is computed at different income levels. You can verify these using our free salary calculator.

Example 1: Gross Salary KES 30,000

PAYE Calculation:

• First KES 24,000 at 10% = KES 2,400
• Remaining KES 3,750 at 25% = KES 937.50
• Total tax before relief = KES 3,337.50
• Less personal relief = KES 2,400
• PAYE Payable = KES 937.50

Example 2: Gross Salary KES 50,000

PAYE Calculation:

• First KES 24,000 at 10% = KES 2,400
• Next KES 8,333 at 25% = KES 2,083.25
• Remaining KES 13,917 at 30% = KES 4,175.10
• Total tax before relief = KES 8,658.35
• Less personal relief = KES 2,400
• PAYE Payable = KES 6,258.35

Example 3: Gross Salary KES 100,000

PAYE Calculation:

• First KES 24,000 at 10% = KES 2,400
• Next KES 8,333 at 25% = KES 2,083.25
• Next KES 60,167 at 30% = KES 18,050.10
• Total tax before relief = KES 22,533.35
• Less personal relief = KES 2,400
• PAYE Payable = KES 20,133.35

PAYE Filing and Remittance Deadlines

Employers must remit PAYE deductions to KRA by the 9th of the following month. For example, PAYE deducted from January salaries must be remitted by 9th February. Late remittance attracts a penalty of 25% of the tax due plus interest at 2% per month on the unpaid amount.

PAYE is filed through the KRA iTax portal using the P10 return. Employers must also submit an annual P9 form (tax deduction card) for each employee, which employees use when filing their individual tax returns by 30th June each year.

Common PAYE Mistakes to Avoid

• Forgetting to deduct NSSF before calculating PAYE: NSSF and Housing Levy reduce your taxable income. Skipping this step means you over-deduct PAYE.
• Applying a flat rate instead of progressive bands: Always apply each band sequentially, not a single rate to the whole income.
• Missing the personal relief: Every resident employee is entitled to KES 2,400 monthly relief. Non-residents do not qualify.
• Late remittance: The 25% penalty plus 2% monthly interest adds up quickly. Automate your payroll to avoid this.

Other Statutory Deductions Alongside PAYE

In addition to PAYE, Kenyan employers must deduct and remit several other statutory contributions:

For a full breakdown of all deductions, see our payroll deductions guide.

Simplify PAYE Calculations with SmartHR

Manually calculating PAYE across multiple employees is tedious and error-prone. SmartHR automates the entire process — from applying the correct tax bands, deducting NSSF, SHIF, and Housing Levy, to generating KRA-ready P10 files.

Try our free salary calculator to see your net pay instantly, or start your free trial of SmartHR to automate payroll for your entire team. No credit card required.