Employment Tax in Kenya

Chapter 3

Employment Income Chargeable to tax in Kenya?

As a general rule, all types of remuneration and benefit received by an employee for services rendered constitute taxable income. s.5(2).

  • Gains or profits from employment include;

    1. Wages, salaries, overtime and leave pay.

    2. Sick pay, commissions and fees; and
    3. Bonus, gratuity or subsistence, travelling, entertainment or other allowances
    4. Any other allowance received in the course of employment
  • Amounts above are charged on an "earnings" basis and not "receipts" basis

  • Employment income for a non-resident person in relation to services rendered to an employer who is resident in Kenya or a P.E in Kenya of an employer who is not so resident is deemed to have accrued in or to have been derived from Kenya. s.5(1)b

  • Any amount not paid in cash but credited to an employee's account with the employer is to be treated as income and tax deducted accordingly.

  • Employment compensation can take either of these two forms which determines method of valuation:

    1. Cash emoluments; or
    2. Non-cash benefits @2014-2024 All rights reserved
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