The Finance Act 2016, which was signed into law by the president in September 2016, made some key changes to the amount of Pay As You Earn (PAYE) tax that employed will pay from January 2017.
The annual individual income tax bands have been widened after a very long time. This will be a welcome relief to employees. PAYE will be calculated as follows:
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- first Ksh. 134,164 – 10%
- next Ksh. 126,403 – 15%
- next Ksh. 126,403 – 20%
- next Ksh. 126,403 – 25%
- income over Ksh. 513,373 – 30%
Note that tax relief is Ksh. 1,280 per month and Ksh. 15,360 per annum.