PAYE is a method of collecting tax from individuals in gainful employment. PAYE is deducted by the employer and remitted to KRA on behalf of the employee online via iTax. It is calculated using the below tax bands with effect from 1st January 2021.
|Monthly Pay Bands (Ksh.)||Annual Pay Bands (Ksh.)||Rate of Tax (%)|
|Above 32,333||Above 388,000||30|
|Personal Tax Relief|
The National Social Security Fund is a Kenyan government agency responsible for the collection, safekeeping, responsible investment, and distribution of retirement funds for employees. It currently amounts to Ksh. 200 (Old rate) or Ksh. 1080 (Tier I & II). The employer matches ups by paying an equal amount to the employee.
The National Hospital Insurance Fund (NHIF) is the body governed by providing health insurance in Kenya. Also, it has a directive to enable all Kenyans to access quality and affordable healthcare services. Contribution to the fund depends on how much an employee earns and Ksh. 500 for Self Employed (Special Type). Insurance relief of 15% is now applicable to NHIF effective January 2022.
PAYE, NSSF & NHIF deductions are submitted by the 9th of every month. Failure of the employer to submit on time attracts a penalty of 25% of the tax due or Kshs. 10,000; Whichever is higher.