Kenya – Amendments to PAYE Computation Pursuant to the Tax Laws
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The Kenya Revenue Authority (KRA) has issued a public notice outlining changes to the PAYE (Pay As You Earn) computation as per the Tax Laws (Amendment) Act, 2024, effective December 2024. The key changes are as follows:
Amounts Deductible in Determining Taxable Employment Income:
- Contributions to the Affordable Housing Levy under the Affordable Housing Act, 2024.
- Contributions to a post-retirement medical fund, capped at Kshs. 15,000 per month.
- Contributions made to the Social Health Insurance Fund (SHIF).
- Mortgage interest up to Kshs. 360,000 per year (Kshs. 30,000 per month) for loans borrowed from approved financial institutions to purchase or improve residential property for personal use.
- Contributions to registered pension or provident funds or registered individual retirement funds up to Kshs. 360,000 per year (Kshs. 30,000 per month).
Tax Reliefs Ceasing to Apply:
- Affordable Housing Relief.
- Post-Retirement Medical Fund Relief.
Gains and Profits from Employment Shall Not Include:
- The value of a benefit, advantage, or facility provided by an employer where the aggregate value is less than Kshs. 60,000 per year (Kshs. 5,000 per month).
- The first Kshs. 60,000 per year (Kshs. 5,000 per month) on the value of meals provided by an employer.
- An amount not exceeding Kshs. 360,000 per year paid by an employer as gratuity or similar payment in respect of services rendered for each year of service to a registered retirement pension scheme.
Please contact your Mercans’ services delivery team for any additional information regarding the implications of the above change.
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Kenya – Amendments to PAYE Computation Pursuant to the Tax Laws – December 2024
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