Here are the Frequently Asked Questions on kra tax for employeed individuals

Navigating the world of taxes in Kenya can feel like a maze, especially with the recent 2026 shifts in statutory rates and digital filing requirements. Whether you’re a fresh graduate or a seasoned professional, staying compliant is non-negotiable.

Here is a comprehensive FAQ guide to help you decode your payslip and meet your KRA obligations for the 2026 tax year.

🏗️ The Basics of Employee Taxation

1. What is PAYE?

Pay As You Earn (PAYE) is the method by which KRA collects income tax from employees. Your employer is legally required to deduct this tax from your salary every month and remit it to KRA on your behalf by the 9th of the following month.

2. What are the current PAYE tax bands for 2026?

Kenya uses a graduated tax system. Based on the 2026 updates, the bands for monthly taxable pay are:

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

3. What is Personal Relief?

Every resident individual is entitled to a Personal Relief of Ksh 2,400 per month (Ksh 28,800 per year). This is a direct “discount” on the tax you owe, effectively lowering your final PAYE amount.

📉 Statutory Deductions & Reliefs

4. What changed with NSSF in 2026?

The National Social Security Fund (NSSF) rates saw a significant update in February 2026 as part of a phased plan. Contributions are now split into two tiers:

Tier I: 6% of the first Ksh 9,000 (Max Ksh 540).
Tier II: 6% of earnings above Ksh 9,000 up to Ksh 108,000 (Max Ksh 5,940).
Total Max: High earners now contribute up to Ksh 6,480, which is matched by the employer.

5. What happened to NHIF?

NHIF has been replaced by the Social Health Insurance Fund (SHIF).

Rate: 2.75% of your gross monthly salary.
Floor: There is a minimum contribution of Ksh 300.
Cap: Unlike NSSF, there is no upper limit; you pay 2.75% regardless of how high your salary is.

6. Is the Affordable Housing Levy (AHL) still mandatory?

Yes. Both the employer and employee contribute 1.5% of the gross salary towards the Housing Levy.

📝 Filing Your Annual Returns

7. When is the deadline for filing returns?

The tax year runs from January to December. You must file your annual return on the iTax portal between January 1st and June 30th of the following year.

Important: Even if you have “Nil” income or your employer already deducted PAYE, you must still file.

8. What is a P9 Form and why do I need it?

A P9 form is a summary provided by your employer showing your total earnings, deductions (NSSF, SHIF, AHL), and tax paid for the year. You need this form to fill in the figures accurately on iTax.

9. How do I file if I have only employment income?

KRA has simplified this with a pre-populated return option on iTax:

Log in to iTax.
Go to Returns > File Return.
Select Income Tax-Resident Individual.
If you only have employment income, select the “Yes” option for the simplified web form. Much of the data from your P9 will be pre-filled.

⚖️ Compliance & Penalties

10. What are the penalties for late filing?

If you miss the June 30th deadline:

Individual Late Filing: A penalty of Ksh 2,000 or 5% of the tax due (whichever is higher).
Late Payment: A penalty of 5% of the tax due and late payment interest of 1% per month.