Doing Business in Kenya - RSM International

c) Housing• The higher of market rental, actual rent paid and:* For directors: 15% of total income excluding the value of the premises.* For whole-time service directors: 15% of total employment incomeexcluding the value of the premises.* For employees: 15% of total employment income excluding the valueof the premises.• Agricultural employees: 10% of total employment income.• Where the total employment income exceeds Shs 600,000 p.a., the housingbenefit is the higher of rent paid and the fair market value.• Rent received from an employee is deducted in calculating housingbenefit.d) Employee LoansLoans granted after 11th Jun 1998 are subject to Fringe Benefit Tax payable by theemployer at the resident corporate tax rate on the difference between the marketinterest rate (average 91-day Treasury Bill interest for the previous quarter) and theinterest paid by the employee.e) Registered Employee Share Ownership PlanTaxable on the employee based on the difference between the offer price and themarket price per share at the date the option is granted. The benefit accrues atvesting.f) Pension and Provident Funds• The amount that is deductible against taxable income of an employee forcontributions made by an employee to a registered fund, including theNational Social Security Fund (NSSF), is the lower of 30% of pensionableincome, actual contribution paid or Shs 240,000 p.a.• Insurance premiums paid by an employer to a registered fund on thelife of, and for the benefit of an employee or his dependents are not ataxable benefit on the employee. However, where they are paid to anotherunderwriter, they become taxable on the employee.• An individual who is not a member of a registered fund may contribute toa registered individual retirement fund operated by a bank or an insurancecompany. Such a person is entailed to claim contributions made to sucha fund against his taxable income subject to the limits prescribed above.• Contributions made by employers to registered or un-registered fundsare not chargeable to tax on the employee. However, employees of taxexempt bodies will be taxed on contributions that the employer makes toan unregistered fund or on the excess contribution to a registered fund.36DOING BUSINESS IN KENYA