PAYE in Kenya Explained: 2026 Tax Bands, Personal Relief, and How to Calculate It

Pay As You Earn (PAYE) is the single most disputed line on a Kenyan payslip, mostly because the calculation involves several deductions applied in a specific order before the tax bands are even touched.

The current tax bands

KRA applies PAYE on a graduated scale to taxable income (monthly):

• Up to KES 24,000 — 10%
• KES 24,001 to 32,333 — 25%
• KES 32,334 to 500,000 — 30%
• KES 500,001 to 800,000 — 32.5%
• Above KES 800,000 — 35%

What happens before you apply the bands

Taxable income is not the same as gross salary. NSSF, SHIF, and Affordable Housing Levy contributions are deducted from gross pay first, and the resulting figure is what the tax bands are actually applied to. Skipping this step is the most common manual-payroll error we see.

Personal relief

Every resident employee is entitled to a personal relief of KES 2,400 per month, which is subtracted directly from the computed tax — not from taxable income. If the computed tax is lower than the relief, no PAYE is due.

A worked example

For a gross salary of KES 80,000: NSSF, SHIF and Housing Levy are deducted first to arrive at taxable pay, the graduated bands above are applied to that figure, and the KES 2,400 personal relief is subtracted from the result to arrive at final PAYE payable.

Where employers go wrong

The two most common mistakes are applying PAYE to gross pay instead of taxable pay, and forgetting to update tax bands or relief amounts when the Finance Act changes them. Both are easy to get wrong in a spreadsheet and easy to get right in software that is kept current automatically.

Our free PAYE calculator runs this exact calculation instantly, and Tornad Payroll applies it automatically to every payroll run, with tax bands updated centrally whenever KRA changes them.