Employer's guide to pay as you earn in kenya revised edition - 2006

APPENDIX 4A
TABLE I
HOW TO FILL IN TAX DEDUCTION CARD P.9B (TAX-FREE REMUNERATION)
USE TABLE 1 AND TABLE 2 EXAMPLES (APPENDIX 4C AND 4D)
Where an employer pays the tax liability due on an employee's earnings such that the
employee receives income free of tax; then the employer shall calculate the monthly tax
liability as follows:-
A. Where the employee does NOT receive housing benefits, calculate the tax liability for
the month as follows:-
(1) Monthly cash income before pension deduction Kshs. 15,000
(2) Deductible pension contribution Kshs. 630
(3) Monthly cash income after pension deductions (1)-(2) Kshs. l4,370
(4) Monthly benefits Kshs. 10,000
(5) Monthly taxable income (3+4) Kshs. 24,370
(6) Tax on monthly taxable income (calculated from Table 1 column (b) Kshs. 3,378
(7) Monthly personal reliefs Kshs. 1,162
(8) Tax net of relief (6)-(7) Kshs. 2,216
(9) Factor without housing (Table 1 Column (d) for taxable income in
row (5) above) Kshs. 1.250
(10) Monthly tax payable (multiply (8) by (9) Kshs. 2,770
(11) Chargeable income (10)+(1) (Enter gross
pay in column (A) of P.9B) Kshs. 17,770*
*See Jan-May entries - (APPENDIX 4)
Normally an employer pays an employee a gross salary out of which tax is deducted. When
employer pays an employee a net-of tax salary, then tax has to be paid by the employer on
top of net salary paid to the employee.