KRA Tax Rates in Kenya (2026): PAYE Bands, Reliefs and Statutory Deductions Explained

Understanding how the Kenya Revenue Authority (KRA) taxes your income is the first step to reading your payslip with confidence. This guide breaks down the 2026 PAYE tax bands, the reliefs you are entitled to, and the statutory deductions that sit alongside income tax, then walks through a practical example so you can estimate your own take-home pay.

1. What Is PAYE?

Pay As You Earn (PAYE) is the system through which employers deduct income tax from employees’ salaries and remit it to KRA every month. It applies to salaries, wages, bonuses, overtime, commissions, allowances and most non-cash benefits. If you are employed in Kenya, PAYE is deducted before your salary reaches your bank account.

2. KRA PAYE Tax Bands for 2026

Kenya uses a progressive tax system, meaning higher portions of your income are taxed at higher rates. The current monthly bands are:

Monthly Taxable Income (KES)	Tax Rate
Up to 24,000	10%
24,001 to 32,333	25%
32,334 to 500,000	30%
500,001 to 800,000	32.5%
Above 800,000	35%

Two important points to note:

1. The rates apply progressively. A person earning KES 100,000 does not pay 30% on everything; only the portion above KES 32,333 is taxed at 30%.
2. PAYE is calculated on taxable income, which is your gross pay after deducting allowable contributions such as NSSF and registered pension contributions.

3. Personal Relief

Every resident employee is entitled to a personal relief of KES 2,400 per month (KES 28,800 per year). This is subtracted from the tax calculated, not from your income. In practice, it means employees earning up to about KES 24,000 per month pay little or no PAYE. Non-residents do not qualify for personal relief.

Insurance relief of 15% of premiums paid (capped at KES 60,000 per year) is also available for qualifying life, health and education policies.

4. Other Statutory Deductions in 2026

PAYE is only one of several deductions on a Kenyan payslip. The others are:

4.1 NSSF (National Social Security Fund)

Employees contribute 6% of pensionable pay, matched by the employer. Following the February 2026 adjustment, the upper earnings limit rose to KES 108,000 per month, putting the maximum employee contribution at KES 6,480. NSSF contributions are deducted before PAYE is calculated, which slightly reduces your taxable income.

4.2 SHIF (Social Health Insurance Fund)

SHIF replaced NHIF in October 2024. It is charged at 2.75% of gross monthly income with a minimum contribution of KES 300 and no upper cap.

4.3 Affordable Housing Levy (AHL)

The housing levy is deducted at 1.5% of gross monthly salary, with the employer matching the employee’s contribution.

5. Worked Example: KES 100,000 Gross Salary

Here is a simplified monthly calculation for an employee earning KES 100,000:

1. NSSF deduction: 6% of pay up to the earnings limit, roughly KES 6,000
2. Taxable income: 100,000 minus 6,000 = KES 94,000
3. PAYE before relief:
   • First 24,000 at 10% = 2,400
   • Next 8,333 at 25% = 2,083
   • Remaining 61,667 at 30% = 18,500
   • Total = KES 22,983
4. Less personal relief: 22,983 minus 2,400 = KES 20,583 PAYE
5. SHIF: 2.75% of 100,000 = KES 2,750
6. Housing Levy: 1.5% of 100,000 = KES 1,500

Estimated take-home pay: approximately KES 69,167.

Actual figures vary depending on pension contributions, benefits and reliefs, so treat this as an estimate rather than a payroll-grade calculation.

6. Filing Deadlines and Penalties

Employers must remit PAYE to KRA by the 9th of the following month through the iTax portal. Late remittance attracts a penalty of 25% of the tax due (minimum KES 10,000) plus interest of 1% per month. Individual taxpayers must file their annual income tax returns by 30th June each year using the P9 form issued by their employer.

7. Frequently Asked Questions

What is the highest PAYE rate in Kenya? The top marginal rate is 35%, applied to monthly taxable income above KES 800,000. It was introduced by the Finance Act 2023.

Is the housing levy tax deductible? No. The 15% affordable housing relief was repealed by the Tax Laws (Amendment) Act, 2024. Currently the main relief available to all employees is the KES 2,400 monthly personal relief.

Do I still pay NHIF? No. NHIF was replaced by SHIF in October 2024, charged at 2.75% of gross pay.

8. Final Thoughts

Kenya’s payroll deductions have changed significantly since 2023, and the combined effect of PAYE, NSSF, SHIF and the housing levy makes it important to understand exactly what leaves your payslip each month. Bookmark this guide, and always verify current rates on the official KRA website or consult a qualified tax professional before making financial decisions.

Disclaimer: This article is for general information only and does not constitute tax advice. Rates are accurate as at July 2026 and are subject to change through Finance Acts and KRA circulars.