Kenya PAYE Income Tax Bands 2026 Explained

Kenya's PAYE system uses 5 progressive bands from 10% to 35%, with a flat KES 28,800/year personal relief applied directly against tax owed.

2026 KRA PAYE Bands

The Personal Relief

Every resident taxpayer gets a KES 28,800/year personal relief, subtracted directly from calculated tax — not from taxable income. This is a flat amount regardless of income level, unlike a graduated relief.

Worked Example

KES 600,000 annual taxable income: KES 288,000 × 10% = KES 28,800. Next KES 100,000 (to 388,000) × 25% = KES 25,000. Remaining KES 212,000 (to 600,000) × 30% = KES 63,600. Gross tax = 28,800 + 25,000 + 63,600 = KES 117,400. Subtract the KES 28,800 personal relief: KES 88,600 net PAYE payable — an effective rate of about 14.8% on the full income.

Kenya's Recent Payroll Reforms: SHIF and the Housing Levy

Two significant deductions were added to Kenyan payslips recently, and both now reduce PAYE indirectly rather than being separate costs on top of it. The Social Health Insurance Fund (SHIF) replaced the old NHIF entirely on October 1, 2024, deducting 2.75% of gross monthly salary with no employer match. The Affordable Housing Levy (AHL) followed a similar timeline, introduced under the Affordable Housing Act 2024 at 1.5% of gross salary, matched equally by the employer.

Since the Tax Laws (Amendment) Act 2024, both SHIF and AHL contributions are allowable deductions computed before PAYE is calculated — meaning they reduce taxable income first, then PAYE is calculated on what's left. If you're estimating tax on raw gross salary without first subtracting SHIF and the Housing Levy, the estimate will come out higher than what's actually owed.

Common Mistakes

• Applying the personal relief to income instead of tax owed. It reduces your final tax bill by a flat KES 28,800/year, not your taxable income before brackets apply.
• Missing the large jump at 30% for middle incomes. The band from KES 388,001 to 6,000,000 covers a huge range at a single 30% rate — many taxpayers sit well within this band without a bracket change until income gets quite high.
• Using pre-2024 assumptions about SHIF and the Housing Levy. Both are now deductible before PAYE is calculated — entering raw gross salary without accounting for this will overstate tax owed.

Frequently Asked Questions