Is there a KES 30,000 tax-free threshold in Kenya?
Whether a KES 30,000 monthly tax-free threshold is part of Kenyan PAYE today, the bands in force, and what would change in Achekam if it became law.
By Achekam · · 4 min read · For Running a business businesses in Kenya
Every few months the same message does the rounds in Kenyan workplaces: the first KES 30,000 of monthly pay is now tax-free. Then payday comes, the payslip still shows PAYE, and the payroll administrator spends the afternoon explaining.
The short answer, at the time of writing, is that there is no such threshold in law. A KES 30,000 monthly tax-free threshold for PAYE has been consulted on, but it is not law. This article sets out what is in force, how Achekam's Kenyan payroll applies it, what would have to happen if the threshold were enacted, and what to tell staff in the meantime.
Consulted on, not law
A proposal that has been consulted on is a step in the policy process, not a change to the law. Until a threshold is enacted, with a start date, employers must keep deducting PAYE on the bands and reliefs that are in force. Deducting less because of a proposal would leave the employer owing the difference to KRA.
Keep an eye on the official channels rather than social media. KRA publishes its guidance on Pay As You Earn, explaining what PAYE is and how employers deduct it from employees' pay and remit it, and any enacted change will appear there.
The bands in force at the time of writing
Kenyan PAYE is charged monthly on these bands:
| Monthly taxable pay | Rate |
|---|---|
| First KES 24,000 | 10% |
| Next KES 8,333 | 25% |
| Above that, up to KES 500,000 | 30% |
| Above that, up to KES 800,000 | 32.5% |
| Above KES 800,000 | 35% |
These bands have been in force since 1 July 2023 and were unchanged by the Finance Acts 2025 and 2026. Rates and bands do change, so confirm them on KRA's site before relying on them.
Some contributions come off before PAYE is worked out. Since 27 December 2024, employees' SHIF and Affordable Housing Levy contributions are deductible from taxable pay, and pension contributions are deductible up to KES 30,000 a month. That pension limit is a different thing from a tax-free threshold, even though the figure is the same; it is worth saying so when staff ask.
Personal relief
After the bands are applied, personal relief of KES 2,400 a month is taken off the tax. Insurance relief, at 15% of qualifying premiums up to KES 60,000 a year, comes off as well where it applies.
Here is the point many staff miss. Because 10% of KES 24,000 is KES 2,400, personal relief cancels the tax on the first KES 24,000 of monthly taxable pay. In practice, then, a worker whose taxable pay stays within that first band pays no PAYE already. The proposal under discussion would raise that point; it would not create a tax-free amount where none existed.
How a person confirms the tax table
Achekam's Kenyan payroll calculates PAYE with personal and insurance relief, NSSF Tier I and II, SHIF, the Affordable Housing Levy and the NITA levy. It does so from a tax table, not from figures typed into each payslip.
Achekam ships its payroll tax tables pre-loaded but unconfirmed, and no payroll run uses a table until a named person at the business confirms its own copy. For Kenya, the shipped table is for 2026. Before your first run, someone who knows Kenyan payroll should check the table against KRA's published bands and reliefs and confirm it. That confirmation is a deliberate step, and the name on it is the person accountable for the figures.
Why a mid-year change cannot be entered in the app today
Suppose the threshold were enacted part-way through a year. Could you simply update the table? Not today. Only the 2026 Kenyan payroll table ships, and the app can confirm a table but not create or edit one. A business cannot type new bands or a new threshold into Achekam itself, and for the same reason a 2027 table cannot be set up in the app.
Two consequences follow:
- Any change in the law would have to reach Achekam as an updated table before runs could use it.
- Runs already approved stay as they are: an approved run is never recalculated. If a change were made retrospective, the correction for past months would have to be worked out with your accountant and put through as an adjustment.
If a change is ever enacted, check its start date first, then ask whether an updated table is available before preparing the first affected run.
What to tell staff who ask
A short, factual reply works best:
- "A KES 30,000 tax-free threshold has been discussed, but it is not law, so PAYE is still worked out on the current bands."
- "Personal relief already means there is no PAYE on the first KES 24,000 of monthly taxable pay."
- "If the law changes, we will apply it from the date it takes effect, and your payslip will show it."
- "Your payslip shows each deduction separately, so you can see exactly what was taken and why."
Put the same wording in a notice on the staff board or the intranet, so the payroll team gives one answer rather than many.
Keeping up
For a full list of what comes off a Kenyan payslip and who collects each deduction, see Kenyan payroll deductions and who collects them. The wider limits of Achekam's Nigerian and Kenyan payroll, including the tax-table limit described here, are gathered in Nigerian and Kenyan payroll gaps. Check KRA's PAYE page at the start of each quarter, and before confirming any new table.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
