Employment income is assessable on accrual basis; that is, over the period it has been earned and become due for payment. The time the Income is received is, therefore, immaterial. Income from employment or services rendered is chargeable to tax under section 3(2)(a)(ii) of the Income Tax Act. This is expounded by section 5(2) which spells out that […]
A resident individual shall be entitled to insurance relief at the rate of 15% of premiums paid subject to maximum relief amount of Kshs. 5,000 per month (or Kshs. 60,000 per annum) if he proves that;- – he has paid premium for an insurance made by him on his life, or the life of his […]
A resident individual with taxable income is entitled to a personal relief of Kshs. 1,162 per month (i.e. Kshs. 13,944 per annum). This is a uniform relief and employers are advised to automatically grant personal relief to all employees irrespective of their marital status. Individuals serving several employers qualify for personal relief from only one […]
In ascertaining the total income of a person for a year of income interest paid on amount borrowed from specified financial institution shall be deductible. The amount must have been borrowed to finance either:- the purchase of premises or improvement of premises – which he occupies for residential purposes. The amount of interest allowable under the law […]
Contributions paid by a non-taxable employer to unregistered pension scheme or excess contributions paid to a registered pension scheme, provident fund or individual retirement fund; shall be employment benefit chargeable to tax on the employee.
When an employer himself pays for or reimburses the cost of tickets for passages, including leave passages for his employee and family, the value of the passages is a non-taxable benefit of the employee if the employee is recruited outside Kenya and is in Kenya solely for the purpose of serving his employer and he […]
There are certain instances when an employer wishes to pay his employees salaries negotiated net of tax. In such circumstances the employer bears the burden of tax on behalf of such employees. The tax so paid by the employer for the employee becomes a benefit chargeable to tax.
As a measure to mitigate the economic effects as a result of covid 19 pandemic, the implementation of the Tax Law (Amendment) Act, 2020 which came to effect from 25th April, 2020 made the following changes: Reduction of Personal Income Tax top rate (PAYE) from 30% to 25% 100 % Tax Relief for persons earning […]
HOUSING – SECTION 5(3)a) The housing benefit for a director and a whole time service director shall be the higher of 15% of total income (or employment income, in case of whole time service director), the fair market rental value and the actual rent paid by the employer.b) Agricultural Employee(Including a whole time service director) who […]
CAR BENEFIT – SECTION 5 (2B)Where an employee is provided with a motor vehicle by employer, the chargeable benefit for private use shall be the higher of the rate determined by the Commissioner and the prescribed rate of benefit. Where such vehicle is hired or leased from third party, employees shall be deemed to have […]
