Kenya Tax Rates 2026: PAYE, Corporate Tax, VAT, Withholding Tax and Capital Gains Tax
Updated: 3 September 2026This guide summarises the principal Kenya tax rates applicable in 2026, including individual income tax and PAYE, corporation tax, withholding tax, VAT, capital gains tax, turnover tax, advance tax and key filing deadlines.
Kenya Personal Income Tax and PAYE Rates for 2026
Kenya applies progressive individual income tax rates ranging from 10% to 35%. The current bands were introduced by the Finance Act 2023 and remain the rates published by the Kenya Revenue Authority for PAYE calculations.
| Monthly taxable pay (KSh) | Annual taxable income (KSh) | Rate |
|---|---|---|
| First 24,000 | First 288,000 | 10% |
| Next 8,333 | Next 100,000 | 25% |
| Next 467,667 | Next 5,612,000 | 30% |
| Next 300,000 | Next 3,600,000 | 32.5% |
| Above 800,000 | Above 9,600,000 | 35% |
Employers deduct PAYE from taxable employment income and generally remit both the tax and the PAYE return to KRA by the 9th day of the following month.
Kenya Personal Reliefs and Employment Deductions
| Relief / deduction | Current rule |
|---|---|
| Personal relief | KSh 2,400 per month / KSh 28,800 per year for resident individuals |
| Insurance relief | 15% of qualifying premiums, subject to a maximum relief of KSh 60,000 per year |
| Mortgage interest deduction | Up to KSh 30,000 per month / KSh 360,000 per year, subject to statutory conditions |
| Registered pension, provident or individual retirement fund contributions | Up to KSh 30,000 per month / KSh 360,000 per year |
| Post-retirement medical fund contributions | Up to KSh 15,000 per month |
| Social Health Insurance Fund contributions | Deductible in determining taxable employment income under the current PAYE rules |
Affordable Housing Levy
Under the Affordable Housing Act, the levy is generally 1.5% of an employee's gross monthly salary, with the employer contributing an equivalent 1.5%. Other persons receiving income accrued in Kenya are also subject to the levy on gross income where applicable. The statutory remittance deadline is the ninth working day after the end of the relevant month.
Kenya Corporation Tax Rates for 2026
| Company type | Rate |
|---|---|
| Resident company | 30% |
| Non-resident company / branch | 37.5% |
Special incentives, exemptions and reduced rates may apply to qualifying entities and investments. Taxpayers should confirm eligibility under the Income Tax Act and the relevant incentive provisions before applying a preferential rate.
Kenya Withholding Tax Rates
Kenya requires withholding at source on specified payments. For a non-resident without a permanent establishment in Kenya, the tax withheld is generally final. For residents, some withholding taxes are final while others are credits against the recipient's income-tax liability.
| Payment | Resident | Non-resident |
|---|---|---|
| Qualifying dividends | 10% | 15% |
| Qualifying interest / interest | 15% | 15% |
| Royalties | 5% | 20% |
| Management, professional and training fees | 5% | 20% |
| Contractual payments | 3% | 20% |
| Commercial rent | 10% | 30% |
| Residential rent withheld by appointed tax agents | 7.5% | 30% |
| Winnings | 5% | 5% |
| Supply of goods to a public entity | 0.5% | 5% |
Applicable tax treaties may reduce certain non-resident withholding rates where treaty conditions are satisfied. Withholding tax is generally remitted to KRA within five working days after deduction.
Kenya VAT Rate for 2026
The standard Value Added Tax rate is 16%. Qualifying zero-rated supplies are taxed at 0%, while exempt supplies are outside the VAT charge and generally do not carry an input-tax deduction.
| VAT category | Rate |
|---|---|
| General taxable goods and services | 16% |
| Specified zero-rated supplies | 0% |
| Exempt supplies | Exempt |
A person supplying or expecting to supply taxable goods or services worth KSh 5 million or more in a year is generally required to register for VAT. VAT returns and payment are generally due by the 20th day of the following month.
Kenya Capital Gains Tax for 2026
Capital Gains Tax applies to qualifying gains arising from the transfer of property situated in Kenya. The current rate is 15% of the net gain. CGT is a final tax and is payable by the transferor at the tax point prescribed by law.
This replaces the historical position on the original page stating that Kenya did not impose capital gains tax. CGT was reintroduced from 1 January 2015 and the rate increased to 15% from 1 January 2023.
Kenya Turnover Tax
Turnover Tax applies to eligible resident businesses whose gross annual turnover is more than KSh 1 million but does not exceed KSh 25 million, unless the taxpayer validly elects out of the regime or another exclusion applies.
| Tax | Current rate |
|---|---|
| Turnover Tax | 1.5% of gross sales |
An eligible Turnover Tax taxpayer making VATable supplies must also consider VAT registration once the KSh 5 million VAT threshold is reached.
Kenya Advance Tax for Commercial and Public Service Vehicles
Advance tax is paid before a qualifying commercial or public service vehicle is licensed. It is not a final tax and is credited when the taxpayer files the annual income-tax return.
| Vehicle category | Advance tax rate |
|---|---|
| Vans, pick-ups, trucks, prime movers, trailers and lorries | KSh 1,500 per ton of load capacity, subject to a minimum of KSh 2,400 per year |
| Saloons, station wagons, minibuses, buses and coaches | KSh 60 per passenger capacity per month, subject to a minimum of KSh 2,400 per year |
The general due date is 20 January or before transfer of ownership, as applicable.
Kenya Income Tax Return and Payment Deadlines
| Obligation | General deadline |
|---|---|
| Individual annual income-tax return | 30 June following the end of the year of income |
| Company income-tax return | By the end of the sixth month after the accounting period ends |
| PAYE return and payment | By the 9th day of the following month |
| VAT return and payment | By the 20th day of the following month |
| Withholding tax | Within 5 working days after deduction |
KRA confirmed that returns for the 2025 year of income were due by 30 June 2026. From the 2026 year of income onward, KRA has stated that declared income and expenses should be supported by valid electronic tax invoices generated and transmitted through eTIMS/TIMS, subject to applicable law and exceptions.
Official Kenya Tax Resources
- Kenya Revenue Authority - PAYE and current individual tax bands
- Kenya Revenue Authority - Individual Income Tax
- Kenya Revenue Authority - Corporation Tax
- Kenya Revenue Authority - Value Added Tax
- Kenya Revenue Authority - Capital Gains Tax
- Kenya Revenue Authority - Turnover Tax
- Kenya Revenue Authority - Advance Tax
- Kenya Revenue Authority - Withholding Tax rates and rules
Historical Kenya Tax Information
Earlier PAYE bands and pre-2015 capital-gains treatment are historical and should not be used for current tax calculations. The 2026 rates above replace outdated figures previously shown for 2014-2017 while retaining the still-relevant descriptions of PAYE, withholding tax, corporation tax and advance tax in updated form.