Important Update for Kenyan Taxpayers: PAYE Computation Changes

 


The Kenya Revenue Authority (KRA) has announced significant changes to the computation of PAYE (Pay As You Earn) tax, effective December 27, 2024. 

These updates will impact how taxable income is calculated, so it’s crucial for both employers and employees to stay informed.

Key Changes Include:

  1. New Deductible Amounts: Several new items will now be deductible when calculating taxable income, including:
  2. Ceasing of Certain Tax Reliefs: Some tax reliefs, such as those related to affordable housing and post-retirement medical funds, will no longer apply.
  3. Exclusions from Gains and Profits: Certain benefits, meals, and gratuities will now be excluded from taxable income. 

Action Required:

Employers must update their payroll systems and processes to ensure they comply with these changes. Accurate PAYE calculations are essential for compliance and to avoid any penalties.

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