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Originally published by Kenyanstop
August 31, 2026
1h ago
KRA Sets Conditions for Employees to Receive Tax-Free Gratuity
KRA's explanation provides employees and employers with a basis for determining whether a particular gratuity payment qualifies for the tax exemption before the payment is made...
✨ Key Highlights
The Kenya Revenue Authority (KRA) has outlined the criteria for employees to receive tax-free gratuity payments under the Finance Act 2026.
- To qualify for tax exemption, the employment contract must last at least three continuous years.
- The gratuity amount must not exceed 31 per cent of the employee's emoluments during the contract period.
- Both the duration of the contract and the gratuity amount relative to emoluments must be satisfied.
- This clarification aims to guide taxpayers and employers on end-of-service benefit tax relief.
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