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How to File your P.A.Y.E (Pay As You Earn) Returns

What is PAYE?

PAYE is a strategy of collecting tax from individuals who are in profitable jobs. Gains or Profits incorporates salary, easygoing wages, pay, leave pay, wiped out payment, installment instreAd of leave, expenses, commission, reward, tip, or resource, voyaging, amusement other settlement got regarding employment; your administrations delivered.

Business owners are required to register for this obligation.

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As an employer, you are supposed to deduct PAYE from your employees pay rates and wages at the overarching rates and transmit the equivalent to KRA’s prior payments next month.

How would I record for PAYE?

PAYE returns are submitted online through iTax. If you have no PAYE to declare, you are needed to present a NIL return.

How do I pay for PAYE? 

After filing the return online, you are required to generate a payment slip via iTax, which you will present at any of the KRA appointed banks to pay the tax due. 

  • You can make payments via Mpesa.
  • Use the KRA Pay bill number 572572.
  • The Account Number is the Payment Registration number quoted at the top right corner of the generated payment slip.

What is the punishment for late filing and paying?

Date: Return ought to be recorded and charge payable at the latest the ninth of the next month.

Punishment on late filing: Whichever is higher between 25% of the expense due or Kshs. 10,000.

Punishment on late installment: 5% of the highest due and delinquent installment of 1% each month on the neglected duty until the expense is settled ultimately.

PAYE rates in Kenya

PAYE follows a reformist tax collection framework. People acquiring lower wages are burdened less contrasted with those with tremendous pay rates.

Ksh. 0 to Ksh. 12,298 tax collection rate is 10% while that of Ksh. 12,299 to Ksh. 23,885 is 15%. Representatives are procured compensation,886 to Ksh. 35,472 compensation 20% of their pay rates as an expense while those are taking between Ksh. 35,473 to Ksh. 47,and 059, 25%. Salaried people procure over 47,059 pay 30% of their wages.

To ascertain the aggregate sum of duty you should pay, follow the below basic methodology:

Figure your gross pay: Add you’re initial compensation to all The commissions and remittances.

Ascertain available pay: Subtract all derivations from your gross income and some other exclusions permitted by the law, like Private Pension and NSSF.

Ascertain negligible duties: Check the tax collection sections your aggregate sum of available pay fall in. Increase it with the assessment rate in each progressive expense section.

Add all the negligible expenses: Add the qualities got from progressive assessment sections.

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Acquire the absolute PAYE: Subtract in general close to home alleviation, protection help, and other reliefs from the add up to get the worth you will pay as tax.

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