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May 21, 2026

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Bankers Propose Major PAYE Tax Changes Affecting Salaries Below Ksh30,000

Bankers Propose Major PAYE Tax Changes Affecting Salaries Below Ksh30,000

If adopted, salaried workers could see a significant boost in their monthly take-home pay as the proposal seeks to reduce the amount deducted from employees’ incomes as PAYE tax...

✨ Key Highlights

The Kenya Bankers Association (KBA) has proposed a significant revision to Kenya's Pay As You Earn (PAYE) system, aiming to reduce the tax burden on salaried Kenyans.

A key proposal involves taxing monthly incomes up to Ksh30,000 at a 10% rate.
The KBA is advocating for this change as part of submissions for the Finance Bill 2026.
This move follows a previous, uncaptured proposal by the Treasury to scrap PAYE completely for those earning up to Ksh30,000 monthly, a possibility that Cabinet Secretary John Mbadi stated is still under consideration.

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