Taxation of Emoluments/Pensions
KRA is pleased to inform employers, employees and the general public that following the presidential directive, amendments have been introduced to the Income Tax Act by reducing the rates of tax applicable on personal emoluments and pension receipts with effect from 25th April 2020. To this end, KRA advises all the affected persons that following the enactment into law of reduced rates of tax, all employers paying employees for the month of April 2020 shall apply the following new individual monthly and annual tax rates in deducting and remitting Pay As You Earn (PAYE) taxes on emoluments/pensions of their employees:
| PAYE Tax Bands | Rate of Tax |
| On the First Shs 24,000 (288,000 p.a) | 10% |
| On the next Shs 16,667 (200,000 p.a) | 15% |
| On the next Shs 16,666 (200,000 p.a) | 20% |
| On all income amounts in excess of Shs 57,334 (688,000) | 25% |
| Monthly personal Relief Ksh 2,400 (28,800 annually) |
On pensions the new tax rates are:
| Pension Tax Bands | Annual Tax Rates |
| Any amount in excess of tax-free amounts: | |
| On first 400,000 | 10% |
| On next 400,000 | 15% |
| On next 400,000 | 20% |
| On any amount in excess of Ksh 1,200,000 | 25% |
Please note that the due date for remittance of PAYE taxes and taxes on pension remains on or before the 9th of the following month.
SOURCE: KRA Public Notices 27/04/2020
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