Employer's guide to pay as you earn in kenya revised edition - 2006
Employer's guide to pay as you earn in kenya revised edition - 2006
Employer's guide to pay as you earn in kenya revised edition - 2006
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EMPLOYER’S GUIDE TO “PAY AS YOU EARN”<br />
CONTENTS<br />
PAGES<br />
PART 1 - GENERAL …………………………………………………………………….………………………………… 1<br />
1. “PAY AS YOU EARN” APPLIES TO ALL EMPLOYMENTS………………………………………………… 1<br />
2. EMPLOYER’S DUTY TO DEDUCT INCOME TAX...…………………………….…………………………… 1<br />
3. PURPOSE OF EMPLOYER’S GUIDE TO “PAY AS YOU EARN”.…………………………………………. 1<br />
4. REGULATIONS ……………………………..…………………………………………………………………………. 1<br />
5. DEFINITIONS OF TERMS USED……….………………………………………………………………………….<br />
a. Employer ………………………………………………………………………………………………………<br />
b. Employee ……………………………………………………………………………………………………..<br />
c. Pay<strong>in</strong>g Po<strong>in</strong>t ………………………………………………………………………………………………….<br />
d. Monthly Pay ………………………………………………………………………………………………….<br />
e. “Paid” …………………………………………………………………………………………………………..<br />
2<br />
2<br />
2<br />
2<br />
2<br />
2<br />
6. EMPLOYMENT BENEFITS………………………………………………………………………………………….. 3<br />
7. LOW INTEREST RATE, EMPLOYMENT BENEFIT/FRINGE BENEFIT …………………………….. 3<br />
I. Low Interest Rate Benefit …………………………………………………………………………<br />
II. Fr<strong>in</strong>ge Benefit Tax Payable by Employer (Sect. 12B) ……………………………………<br />
4<br />
4<br />
8. HOUSING SECTION 5(3) ……………………………………………………………………………………….....<br />
a. Direc<strong>to</strong>r …………………………………………………………….………………………………………….<br />
b. Whole Time Service Direc<strong>to</strong>r ……………………………………………………………….............<br />
c. Agricultural Employee ……………………………………………….……………………………………<br />
d. Any Other Employee ……………………………………………………………………………………..<br />
e. Notes……..……………………………………………………………………………………………………..<br />
5<br />
5<br />
5<br />
5<br />
6<br />
6<br />
9. CAR BENEFIT SECTION 5 (2B)………………………………………………….……………………………….. 6<br />
10. TAX FREE REMUNERATION……………………………………….………………………………………………. 7<br />
11. PASSAGES………………………………………………………………………………………………………………… 7<br />
12. MEDICAL……………………………………………………………….. ………………………………………………. 7<br />
13. DEFINED BENEFIT FUND OR DEFINED CONTRIBUTION FUND…………. …………………………. 7<br />
14.<br />
15.<br />
EMPLOYER’S CONTRIBUTIONS ETC…………………………………………………………………………….<br />
HOME OWNERSHIP SAVINGS PLAN…………………………………………………………………………….<br />
8<br />
8<br />
16. OWNER OCCUPIED INTEREST SEC. 15 (3) (b)…………………………………………………………….. 8<br />
17. PERSONAL RELIEFS ………………………………………………………………………………………………… 9<br />
18. MONTHLY TAX TO BE DEDUCTED…..…………………………………………………………………………. 10<br />
19. MONTHLY PAY-SLIP ………………………………………………………………………………………………… 11<br />
20 TAX DEDUCTION CARD…………………………………………………………………………………………….. 11<br />
21. PROCEDURE ON COMPUTATION OF TAX FOR LUMP SUM PAYMENTS…..……………………….. 11 - 14
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