Who Pays PAYE In Kenya?

How can I avoid paying tax in Kenya?

Dennis Mutunga, a tax consultant explain the simple ways you can minimise the burden.Take a mortgage instead of a loan.

Invest in a tax-free environment.

Take insurance cover.

Register with a retirement benefits scheme.

Contribute to a registered home ownership savings plan.

Get disability relief.

Avoid fines and penalties.More items…•.

How do I pay my PAYE?

Pay employers’ PAYEOverview.Direct Debit.Bank details for online or telephone banking, CHAPS, Bacs.By debit or corporate credit card online.At your bank or building society.By cheque through the post.Check your payment has been received.Tell HMRC no payment is due.

Is PAYE the same as self employed?

As an employee, you pay tax automatically through PAYE, so you don’t need to do anything unless you have other taxable sources of income. By contrast, when you’re self-employed you take full responsibility for paying the right amount of tax.

What is the lowest tax threshold?

Income Tax rates and bandsBandTaxable incomeTax ratePersonal AllowanceUp to £12,5000%Basic rate£12,501 to £50,00020%Higher rate£50,001 to £150,00040%Additional rateover £150,00045%

How much PAYE should I be paying?

As an employee: you pay 0% on earnings up to £12,500* for 2020-21. then you pay 20% on anything you earn between £12,501 and £50,000. you’ll pay 40% Income Tax on earnings between £50,001 to £150,000.

How is basic salary calculated?

Basic Salary – DefinitionAnnual Basic = Monthly Basic X 12. Formula To Calculate Basic Salary. … Gross Pay = Basic + DA + HRA + Conveyance + Medical + Other. Hence, to calculate your basic from the gross pay you need to do the reverse calculation. … Basic = Gross Pay – DA – HRA – Conveyance – Medical – Other. … Basic = Gross Pay X Percentage.

What is the basic salary?

Basic salary is the total amount (before any deductions) paid to employees plus the allowances. It is a fixed amount that is paid to employees by their employers in return for the work performed.

How do I pay tax in Kenya?

Generate a payment slip via iTax and make payment at any of the KRA appointed banks. If the annual tax liability is projected to exceed Kshs. 40,000, then you should pay in installments via iTax. This is called Installment Tax.

Who pays tax in Kenya?

Individual Income Tax is charged for each year of income on all the income of a person, whether resident or non-resident, which accrued in or was derived from Kenya. Personal Relief of Kshs. 28,800 per annum (Kshs.

How do I pay PAYE via mpesa?

KRA M-ServiceMpesa Go to M-pesa Menu >Lipa na M-PESA > Pay Bill.BUSINESS NUMBER For Business no. … ACCOUNT NUMBER For account no. … AMOUNT Enter the exact amount as per the e-slip.PIN Enter your M-pesa PIN.PAYMENT DETAILS Review payment details and select OK to confirm your M-payment.More items…

Do I have to pay PAYE?

PAYE is HM Revenue and Customs’ ( HMRC ) system to collect Income Tax and National Insurance from employment. You do not need to register for PAYE if none of your employees are paid £120 or more a week, get expenses and benefits, have another job or get a pension. However, you must keep payroll records.

How is advance tax paid in Kenya?

Procedure[edit]Step 1: Get started by logging in to Kenya Revenue Authority Portal. Go to KRA online tax portal : KRA online tax portal and log in. … Step 2: Payment registration. … Step 3: Select payment obligation and tax period. … Step 4: Download the payment slip and make payment.

Can you do a tax return if you are PAYE?

Most taxpayers do not have to fill in a tax return. If HMRC thinks you are paying the right amount of tax through the Pay As You Earn (PAYE) system on your wages or salary, or on an occupational pension, they will not send you a tax return. … However, HMRC will issue annual tax returns if you: are self-employed.

How is NI calculated?

When you earn over £962 in a week or £4167 a month, NI is calculated at 2% of the earnings over these amounts. If you earn £1,000 in a week, first your NI is calculated at 12% of the earnings between £962 and £166 (£796), this works out to be £95.52.

How is PAYE calculated in Kenya?

Pay-As-You-Earn(PAYE) is the tax charged on income earned by employees in Kenya. The formula for calculating this income tax in Kenya uses the following simple steps: … Gross Income = Basic salary + allowances + commissions.

Who is exempt from paying tax in Kenya?

Beginning 1st January 2020, any income earned by an individual registered under the ADP, shall be exempt from tax for a period of 3 years provided the qualifying members pay a KShs 10,000 subscription upon registration. This is a Government incentive to bridge the gap between skills and lack of jobs.

How companies are taxed in Kenya?

Tax rates. The current corporate tax rate applicable in Kenya is 30% in the case of resident corporations (i.e. limited liability companies). … 25% rate if 30% of issued share capital is listed – (for five year period). 27% rate if 20% of issued share capital is listed – (for three year period).

Why do I pay PAYE?

The Pay As You Earn (PAYE) system is a method of paying income tax and national insurance contributions. … If you pay tax on your wages or occupational pension under PAYE, the PAYE system can also be used to collect the income tax on any other taxable income you have.

How do you get PAYE tax back?

Refunds under PAYE or Self Assessment If you overpay tax under PAYE or Self Assessment, you can make a claim for a refund. For more information about claiming a tax refund for overpayments made through your job, or if you become unemployed, go to the GOV.UK website at: www.gov.uk.

How do I get taxable income?

Your Adjusted Gross Income (AGI) is then calculated by subtracting the adjustments from your total income. Your AGI is the next step in figuring out your taxable income. You then subtract certain deductions from your AGI. The resulting amount is taxable income on which your taxes are calculated.

How much is PAYE tax in Kenya?

PAYEMonthly Taxable Pay (Ksh)Annual Taxable Pay (Ksh)Rate of Tax (%)Up to 12,298Up to 147,5801012,299 – 23,885147,581 – 286,6231523,886 – 35,472286,624 – 425,6662035,473 – 47,059425,667 – 564,709251 more row