Employment Tax in Kenya

Chapter 4

Types of Employment Compensation in Kenya

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

  1. Cash emoluments; or
  2. Non-cash benefits
Taxable Cash Emoluments in Kenya
  1. Per diem.
    Per diems are per day allowances normally given for upkeep of staff when on official travel.

    • The first KShs 2,000 is deemed to be a reimbursement w.e.f 16 June 2006. (s.5(2)a)
    • The Act does not provide per diem rates for oversees travel.
  2. Tax free emoluments
    • Where employee earns gross income, the tax paid by the employer on behalf of employees is in itself a benefit chargeable to tax.
    • The Commissioner has given a formula to compute the tax-on-tax effect – Appendix 4C and 4D of PAYE guide. @2014-2023 All rights reserved
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