Employment Tax in Kenya

1. Passage for Non-Citizens (s.5(4)(a))
   Expenditure on passages between Kenya and any place outside Kenya borne by the employer for the benefit of
   
   
   • an employee recruited or engaged outside Kenya, and;
   • who is in Kenya solely for the purpose of serving the employer, and;
   • is not a citizen of Kenya.
2. Medical benefit (s.5(4)(b)
   Medical cover (subject to a Kshs.1 million limit) for sole proprietor and directors holding not more than 5% of a company’s shares {whole time service director of a company)
3. Pension Contribution (s.5(4)(b)
   The allowable deductions shall be the lesser of :-
   
   
   • actual contribution or
   • 30% of salary or
   • Kshs.20,000
   paid by the employer as a contribution to a registered or unregistered pension fund, provident fund or scheme up to a maximun of 240,000/- per year.
   
   Contributions by a non-taxable employer to
   
   
   1. unregistered pension scheme, or
   2. excess contribution to a registered scheme
   shall be employment benefit chargeable to tax on the employee.
4. Educational Fees (s.5(4)(d)
   Educational fees paid for an employee’s dependants taxed on employer.
5. Free meals (s.5(4)f)
   The cost of meals served in canteens and cafeterias operated by an employer or third party who is a registered taxpayer for the benefit of the employees will be treated as a non taxable benefit where the monthly cost does not exceed KShs. 4,000 per month.