KRA urges employers to verify payroll records, file October returns and pay outstanding PAYE by Monday to avoid penalties and interest.
The Kenya Revenue Authority (KRA) has reminded employers of the Monday, November 9, 2026, PAYE deadline. Employers must file their October returns and pay the tax due by that date to avoid penalties and interest.
On Friday, November 6, the authority issued a nine-point checklist to guide employers through the process. The guidance covers payroll checks, tax calculations, filing returns and keeping payment records.
Payroll checks before the PAYE deadline
KRA advised employers to begin by preparing payroll records and checking employees’ Personal Identification Numbers (PINs). They should also confirm that they have correctly captured those details before proceeding with their returns.
Next, employers must review taxable benefits, including allowances, bonuses and other employment-related payments. They must also account for applicable deductions and reliefs before applying the correct income tax bands.
After calculating the tax, employers should cross-check the figures against their payroll records to avoid errors. They must then log into iTax, complete and submit their October PAYE returns, and generate payment slips.
Once they have paid the amount due, employers should download their filing acknowledgement receipts. KRA also urged them to retain proof of payment for future reference.
Taxable benefits, rates and late-payment penalties
Section 37 of the Income Tax Act requires employers to deduct PAYE from taxable employment income. This includes salaries, wages, bonuses, commissions, allowances, overtime and leave pay before employers remit the tax to KRA.
Employer-provided housing, company vehicles and other facilities also count as taxable benefits. Employers must therefore include these benefits when calculating employees’ monthly PAYE.
For 2026, monthly PAYE rates range from 10 per cent to 35 per cent. The first Ksh24,000 attracts 10 per cent, while the next Ksh8,333 attracts 25 per cent.
Income from Ksh32,334 to Ksh500,000 attracts 30 per cent. Meanwhile, the rate for income between Ksh500,001 and Ksh800,000 stands at 32.5 per cent. Monthly taxable income above Ksh800,000 attracts the highest rate of 35 per cent.
Late filing attracts a penalty of 25 per cent of the tax due or Ksh10,000, whichever is higher. Separately, late payments attract a five per cent penalty and monthly interest of one per cent.
