Employment and Tax in Kenya

Bonuses and irregular pay

Employment bonuses are generally taxable, but there is no separate universal bonus tax rate. The appropriate treatment depends on the payment and the period to which it relates. A simple same-period bonus estimate compares PAYE with and without the extra taxable income. Arrears and lump sums can require allocation to earlier periods; a standard monthly calculator is not a substitute for that reconciliation.

Changing jobs or working two jobs

Keep the P9 and payslips from each employer. Check overlapping pay periods, personal relief and the total income reported in your return. A second employer should not simply duplicate relief already used elsewhere. Changing jobs does not erase earlier taxable income or tax paid during the year.

Freelance income is different

PAYE is withholding on employment income. Independent business receipts can involve annual income tax, withholding credits, turnover tax or VAT depending on eligibility and circumstances. A payment described as freelance is not automatically outside employment rules. Keep records and do not apply the salary calculator to business revenue as though it were wages.

Leaving employment

Request an itemised final settlement separating salary, unused leave, notice pay, gratuity and any pension payments. These items can have different tax treatment and attribution periods. Ask payroll for its working and the applicable exemption conditions rather than assuming the entire settlement is tax-free or taxed in a single month.

Deductions or PAYE look wrong?

HELB repayments usually reduce take-home cash rather than taxable income. Compare deductions with the repayment instructions and account statement. For suspected PAYE errors, check salary inputs and the relevant rates, ask payroll for a written reconciliation and retain the evidence. A return correction or refund claim may be necessary; neither a calculator discrepancy nor a submitted claim guarantees a refund.

Sources and further checks

• KRA PAYE rates and deductions
• KRA December 2024 PAYE amendments
• KRA employer guidance

Use the linked topic articles below for detailed examples and eligibility checks.