PAYE_Guide-2017

2017 EMPLOYER’S GUIDE TO PAYE | KENYA REVENUE AUTHORITY
DEAR EMPLOYER,
The Finance Acts (2009 to 2016) contain amendments to
the Income Tax Act (Cap 470) which affect the operation
of PAYE. This edition also contains provisions of the Tax
Procedures Act, 2015
1. PENSION
The exempt limit was increased from
Kshs. 180,000 p.a (15,000 p.m) to
Kshs. 300,000 p.a (25,000 p.m). The
exempt limit for lump sum was increased
from Kshs. 480,000 to Kshs. 600,000.
Pension income is now taxable under
the WHT regime and not under the PAYE
regime. Effective date: 1st January, 2010.
Monthly pension granted to a person
who is sixty five (65) years old or more is
exempt from tax.
2. GRATUITY
Gratuity paid into retirement schemes
registered by the Commissioner
subject to limit of Kshs. 240,000 p.a
is not taxable.
Effective date: 1st January, 2011
3. OBJECTIONS
An employer disputing the imposition of
a penalty or any other decision by the
Commissioner can lodge an objection
within 30 days.
Effective date: 11th June, 2010
4. GROUP INSURANCE COVER
Premiums paid by the employer for group
life policy are not taxable benefits on the
employees unless such a cover confers a
benefit on an employee.
Effective date: 1st January, 2014
5. VACATION BENEFIT
Expenditure incurred by the employer on
vacation trips to destinations in Kenya
and not exceeding 7 days is not a taxable
benefit on the employee.
Applicable from: 13th June, 2014 to 1st July,
2015
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