Compliance and Statutory

2021 PAYE rates effective from 1st January 2021

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The Covid-19 tax relief comes to an end on 31st December 2020. On 22nd  December 2020, the National Assembly passed Tax Laws (Amendment) [No.2] Bill, 2020 introducing the new tax rates. The Bill introduced new 2021 PAYE rates. The proposed Bill will come into effect on the 1st of January 2021. The same will be posted on KRA website .

Below are the new 2021 PAYE Rates compared to the COVID-19 PAYE  rates.

COVID-19 PAYE rates

Annual Salary Monthly  Salary Rate
First KES 288,000 First KES 24,000 10%
Next KES 200,000 Next 16,666.67 15%
Next KES 200,000 Next 16,666.68 20%
Above KES 688,000 Above KES 57,333.33 25%

2021 PAYE rates

Annual Salary Monthly  Salary Rate
First KES 288,000 First KES 24,000 10%
Next KES 100,000 Next 8,333 25%
Above KES 388,000 Above 32,333 30%

Personal relief

Personal relief remains at KES 2,400 (KES. 28,800 per annum) and the minimum monthly taxable income is KES. 24,001. This means that individuals earning less than KES 24,000 monthly (KES 288,000 per year) continue to be exempt from income tax.

Use our PAYE Calculator to get accurate PAYE figures for your employees. For users of Workpay, the new 2021 PAYE rate will be automatically effected from 1st January 2020. Get a demo to see Workpay in action.

 

 

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