# How is PAYE KRA calculated?

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## How is PAYE KRA calculated?

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. Step 2.

## How is PAYE calculated in 2021 Kenya?

In Kenya, workers in formal employment are taxed through a deduction named Pay As You Earn (PAYE)….PAYE Calculator (Updated 2021 tax rates)

Monthly Bands of Taxable Income (KES) Tax Rate
0 – 24,000 10%
On the next 8,333 25%
Remaining amount over 32,333 30%
Personal Relief: KES 2,400.00 per month

## How do you calculate personal income tax?

Here’s how to compute for your new income tax:

1. Take your montly salary and deduct contributions for SSS, PhilHealth, and Pag-Ibig Fund.
2. If your salary exceeds P90,000 a month, get the taxable amount of your 13th month pay by subtracting P90,000 from your salary and dividing the result by 12.

## How much is PAYE tax in Kenya?

How is PAYE Calculated?

Tax Band Rate of Tax
On the first Kshs 24,000 per month or Kshs 288,000 per annum 10%
On the next Kshs 8,333 per month or Kshs 100,000 per annum 25%
On all income amount in excess of Kshs 32,333 per month or Kshs 388,000 per annum 30%
Personal Relief

## How is VAT calculated Kenya?

In order to calculate VAT payable in Kenya, the input-output tax system works best. There is also VAT on commercial property as the tax rate is 30 percent for resident taxpayers and 37.5 percent for non-resident taxpayers. Taxpayers are allowed to deduct input tax directly attributable to taxable output.

## How do you solve taxable income?

Taxable Income Formula = Gross Sales – Cost of Goods Sold – Operating Expense – Interest Expense – Tax Deduction/ Credit.

Categories: Common questions