If you’re employed in Kenya, you’ve likely come across the term PAYE – short for Pay As You Earn. It’s the income tax that the Kenya Revenue Authority (KRA) deducts from your salary each month. But how exactly is this tax calculated? And how can you check if your deductions are accurate? That’s where the Kenyan PAYE calculator comes in handy.
In this article, we’ll break down what the PAYE calculator is, how it works, and how you can use it to better understand your payslip.
What is PAYE?
PAYE is a method of collecting income tax from employees at the source of income. Employers deduct the tax from employees’ salaries and remit it directly to the KRA on their behalf. The PAYE system ensures that employees pay their income taxes regularly, instead of waiting until the end of the year.
Who Pays PAYE?
If your monthly income exceeds KES 24,000 (as of 2025), you’re required to pay PAYE. The more you earn, the more you pay, due to the progressive tax system in Kenya.
PAYE Tax Bands in Kenya (2025 Rates)
As of July 2025, these are the applicable monthly tax bands:
| Income Bracket (KES) | Tax Rate |
|---|---|
| First 24,000 | 10% |
| Next 8,333 (24,001 – 32,333) | 25% |
| Above 32,333 | 30% |
Additional statutory deductions may apply, such as:
- NHIF (National Hospital Insurance Fund)
- NSSF (National Social Security Fund)
- Housing Levy (1.5% from employee + 1.5% from employer)
- Personal Relief (KES 2,400 per month)
What is the Kenyan PAYE Calculator?
The Kenyan PAYE Calculator is an online tool that helps you estimate your monthly tax deductions based on your gross salary. It calculates:
- PAYE tax
- NHIF and NSSF contributions
- Personal relief
- Net salary (take-home pay)
It’s especially useful for:
- Employees verifying payslip deductions
- Employers calculating payroll
- Freelancers and consultants budgeting their income
How to Use the PAYE Calculator
Most Kenyan PAYE calculators (like those on TaxTim Kenya, OnlineCalculators.co.ke, or KRA’s iTax portal) are easy to use. Here’s a general step-by-step guide:
- Enter your gross monthly salary
- Input any deductions (e.g., pension contributions)
- Indicate any other income or benefits (if applicable)
- Click ‘Calculate’
The tool then displays your:
- Gross salary
- Total tax due (PAYE)
- NHIF/NSSF deductions
- Housing levy
- Final net salary
Example Calculation
Let’s say you earn KES 50,000 per month:
- First 24,000 taxed at 10% = KES 2,400
- Next 8,333 taxed at 25% = KES 2,083
- Remaining 17,667 taxed at 30% = KES 5,300
- Total PAYE before relief = KES 9,783
- Less Personal Relief = KES 2,400
- Final PAYE = KES 7,383
Add NHIF (~KES 1,200) and Housing Levy (KES 750), subtract from gross, and you get a net salary of around KES 40,667.
Why It Matters
Using a PAYE calculator helps you:
- Confirm your employer is deducting the right amount
- Plan your personal budget accurately
- Understand how tax changes affect your income
It’s a crucial tool in an era where financial literacy is becoming essential for every working Kenyan.
Final Thoughts
Taxes can be complex, but tools like the Kenyan PAYE Calculator make it easier for you to stay informed and in control. Whether you’re newly employed or have years of experience, taking a few minutes to verify your monthly deductions can save you surprises down the road.