How to Calculate PAYE in Kenya 2026
PAYE means Pay As You Earn. It is income tax deducted from employment income and remitted to the Kenya Revenue Authority by the employer. If you are employed in Kenya, PAYE is one of the main deductions that affects your monthly take-home pay.
This guide explains how to calculate PAYE in Kenya in 2026 using the current monthly tax bands, personal relief and a simple worked example.
What is PAYE in Kenya?
PAYE is tax deducted from employment income. It applies to salaries, wages, bonuses, allowances, benefits and other taxable employment income. The employer deducts PAYE from the employee's pay and remits it to KRA.
PAYE is normally calculated every month. The employer applies the monthly individual income tax bands, subtracts applicable reliefs, and remits the final PAYE amount.
Kenya PAYE Tax Bands 2026
The current individual PAYE tax bands in Kenya are applied progressively. This means different portions of taxable income are taxed at different rates.
| Monthly Taxable Pay Band | Tax Rate |
|---|---|
| On the first Ksh 24,000 | 10% |
| On the next Ksh 8,333 | 25% |
| On the next Ksh 467,667 | 30% |
| On the next Ksh 300,000 | 32.5% |
| On all income above Ksh 800,000 | 35% |
How to Calculate PAYE in Kenya Step by Step
Step 1: Start with gross monthly pay
Gross monthly pay is the total salary before deductions. It may include basic salary, taxable allowances, bonuses and taxable benefits.
Step 2: Determine taxable pay
Taxable pay is the amount used to calculate PAYE. In payroll practice, taxable pay may be affected by allowable deductions, pension arrangements, benefits, reliefs and other employer-specific payroll rules.
Step 3: Apply the PAYE tax bands
Apply each tax rate progressively. Do not apply one flat rate to the whole salary. For example, the first Ksh 24,000 is taxed at 10%, the next band at 25%, and so on.
Step 4: Subtract personal relief
After calculating gross tax, subtract the monthly personal relief. For a resident individual, the standard monthly personal relief is Ksh 2,400.
Step 5: Get estimated PAYE
The amount remaining after deducting personal relief is the estimated PAYE. If the result is below zero, PAYE is normally treated as zero.
Example: PAYE Calculation for Ksh 50,000 Taxable Pay
Assume the monthly taxable pay is Ksh 50,000.
| Band | Calculation | Tax |
|---|---|---|
| First Ksh 24,000 at 10% | 24,000 × 10% | Ksh 2,400 |
| Next Ksh 8,333 at 25% | 8,333 × 25% | Ksh 2,083 |
| Remaining Ksh 17,667 at 30% | 17,667 × 30% | Ksh 5,300 |
| Gross tax before relief | Ksh 9,783 | |
| Less personal relief | Ksh 2,400 | |
| Estimated PAYE | Ksh 7,383 |
PAYE vs Net Salary
PAYE is only one part of salary deductions. Net salary is what remains after PAYE and other deductions are removed from gross pay.
Other common deductions may include:
- Employee NSSF contribution
- SHIF contribution
- Affordable Housing Levy
- SACCO deductions
- Loan deductions
- Union deductions
- Pension deductions
- Other employer-approved deductions
Use the Free Kenya Net Salary Calculator
To estimate your full take-home pay after PAYE, SHIF, NSSF, Housing Levy and other deductions, use our free Kenya Net Salary Calculator.
Open Salary CalculatorCommon Mistakes When Calculating PAYE
1. Applying one tax rate to the whole salary
PAYE is progressive. Each band is taxed separately. A person earning Ksh 50,000 is not taxed at 30% on the full Ksh 50,000.
2. Forgetting personal relief
Personal relief reduces the final tax payable. For resident individuals, the monthly personal relief is currently Ksh 2,400.
3. Confusing gross salary with taxable pay
Gross salary and taxable pay may not always be the same. Payroll offices may consider allowable deductions, benefits and reliefs before final PAYE is determined.
4. Forgetting other deductions
PAYE alone does not give the final net salary. SHIF, NSSF, Housing Levy, loans, SACCO and other deductions can reduce take-home pay further.
When is PAYE Remitted in Kenya?
Employers are required to deduct PAYE and remit it to KRA by the required monthly deadline. PAYE is normally filed and paid by the employer through the relevant KRA systems.
Download the Free Kenya Salary Calculator Excel 2026
Want to calculate salary offline? Download the Excel version and estimate PAYE, SHIF, NSSF, Housing Levy and net salary from your computer.
Download Excel Calculator Use Online CalculatorThis tool gives estimates only. Always confirm final deductions with your employer, payroll office, KRA, SHIF/SHA, NSSF or official platforms.
Frequently Asked Questions
How is PAYE calculated in Kenya?
PAYE is calculated by applying the monthly individual income tax bands to taxable pay, then subtracting the applicable monthly personal relief.
What is the monthly personal relief in Kenya?
The standard monthly personal relief for a resident individual is Ksh 2,400.
Is PAYE calculated from gross salary or net salary?
PAYE is calculated from taxable employment income, not from the final net salary. Net salary is what remains after PAYE and other deductions.
Can PAYE be zero?
Yes. If the calculated tax after relief is zero or below zero, the PAYE amount may be zero.
Does this article replace KRA advice?
No. This article is for general information only. Always confirm official tax treatment with KRA, your employer, payroll office or a qualified tax professional.
Official References
For official information, refer to: