^KENYA

Employment Tax in Kenya

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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.

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