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Originally published by Kenyanstop
October 2, 2025
2h ago
KRA Issues New Income Tax Guidelines for Employers
The new guidelines take effect following amendments introduced by the Finance Act, 2025...
✨ Key Highlights
The Kenya Revenue Authority (KRA) has issued new income tax guidelines for employers, effective following amendments introduced by the Finance Act, 2025. These directives aim to ensure consistent and correct application of all allowable deductions, reliefs, and exemptions when computing income tax on employee earnings.
- Employers are now mandated to automatically apply personal relief for all resident employees and factor in insurance relief, mortgage interest deductions, and contributions to registered pension schemes and Post Retirement Medical Funds when calculating PAYE.
- The KRA emphasized that contributions like the Affordable Housing Levy and Social Health Insurance Fund must be deducted and included in the employee's taxable income, and employers must validate tax exemption certificates for employees.
- Employees are advised to submit supporting documentation such as certificates and receipts promptly to their employers to ensure correct application of reliefs and deductions.
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