Employment Tax in Kenya
Types of Employment Compensation in Kenya
Employment compensation can take either of these two forms which
determines method of valuation:
Taxable Cash Emoluments in Kenya
- Cash emoluments; or
- Non-cash benefits
- 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.
- 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.