Kenyan Income Tax (PAYE): Rates, KRA and Departure Procedures
Kenya's income tax (Income Tax Act Cap 470, as amended by Finance Acts) uses a progressive system administered by the Kenya Revenue Authority (KRA — kra.go.ke). 2026 individual PAYE rates: 10% (up to KES 24,000/month), 25% (KES 24,001–32,333), 30% (KES 32,334–500,000), 32.5% (KES 500,001–800,000), 35% (above KES 800,000/month). Personal Relief: KES 2,400/month (reduces tax payable — not a deduction from income). Insurance Relief: 15% of premiums on qualifying life insurance policies (up to KES 60,000/year). Affordable Housing Levy (AHL): 1.5% of gross salary (introduced 2023 — employer contributes 1.5% too). Employment income: withheld at source via PAYE — employer remits to KRA by the 9th of the following month. KRA iTax: Kenya's electronic tax platform (itax.kra.go.ke). Used for: PAYE filings, income tax returns, TCC applications, and correspondence with KRA. Annual income tax return: due June 30 for the previous tax year (January–December). Tax residency: Kenyan tax residency applies if: (1) present in Kenya for 183+ days in a tax year; or (2) present for an average of 122+ days in each of the last 3 years. Loss of residency: cessation of Kenya residency ends worldwide tax obligations. Non-residents: 20% withholding on Kenyan-source dividends, interest, royalties; 30% on professional fees. Notify KRA via iTax of departure and update domicile to foreign address.
KRA Tax Compliance Certificate (TCC) and Departure Requirements
The KRA Tax Compliance Certificate (TCC) confirms a taxpayer is compliant with Kenya tax obligations. Required for: (1) Passport renewals (Kenyan citizens — required at Huduma Centres). (2) Work permit applications and renewals. (3) Professional licence renewals. (4) National Construction Authority (NCA) registration for contractors. (5) Kenya Power connections for business. (6) AGPO (Access to Government Procurement Opportunities) certificates. (7) Some bank loan applications. Process via iTax: (1) Log into itax.kra.go.ke with your PIN (Personal Identification Number — similar to tax ID). (2) File all outstanding income tax returns — including for the current partial year if departing mid-year (file estimated return). (3) Ensure all PAYE (if employer) and income tax liabilities are paid. (4) Apply for TCC via iTax — typically issued instantly online if records are clear, or within 5 working days for more complex cases. (5) TCC is valid for 12 months. For departing foreign nationals: ensure your employer files the final PAYE return covering your departure month. If you have a sole proprietorship, file cessation of business with KRA. Importantly: iTax online access remains available after departure — useful for viewing your TCC history, filing returns for ongoing Kenyan property income, and managing your Kenyan tax affairs remotely.
NSSF and SHIF: Social Security and Health Insurance on Departure
NSSF (National Social Security Fund — nssf.or.ke): Kenya's public pension savings scheme. 2024 reform: the NSSF Act 2013 (Supreme Court validated June 2023) significantly increased contributions — employee contribution: 6% of pensionable pay (up to upper earnings limit — National Average Wage × 2); employer: 6% matching. Previous contribution: KES 200/month fixed (much lower). Balance: NSSF maintains individual member accounts. On departure: for non-Kenyan nationals permanently departing Kenya, NSSF allows withdrawal of accumulated member account balance under certain conditions — subject to NSSF Act provisions and administrative guidelines. Required: application form, passport, evidence of permanent departure, PIN number. Processing: 30–60 working days. Tax on NSSF withdrawal: subject to income tax; qualifying retirement lump sums receive exemptions. NSSF Kenya is in the process of transitioning from old to new rates under NSSF Act 2013 — verify current contribution and withdrawal rules at nssf.or.ke. SHIF (Social Health Insurance Fund — previously NHIF, reformed under Social Health Insurance Act 2023): replaces NHIF. Contributions: 2.75% of gross income (employee and voluntary contributors). SHIF coverage: terminates on the last date of contribution. There is no refund of SHIF/NHIF premiums. Arrange private international health insurance from your departure date.
Capital Gains Tax, Real Estate, and KES Transfers
Capital Gains Tax (CGT): Kenya reintroduced CGT under the Tax Laws Amendment Act 2014 and has expanded it since. Rate: 15% on capital gains from transfer of property (real estate and shares). Applies to: sale of Kenyan real estate, sale of shares in Kenyan companies, transfer of interests in partnerships. Calculation: gain = sale consideration − acquisition cost − allowable expenditure. Residential exemption: gains from the sale of a principal private residence (occupied for 3+ years) up to KES 3M are exempt. Filing: CGT return due within 30 days of the transfer. Non-resident CGT: 15% applies to non-residents on gains from Kenyan property and securities. Stamp Duty on real estate transfer: 4% of market value (urban areas); 2% (rural). Annual Land Rent: government land rent applies to properties on leasehold land — varies by location. Property income as non-resident: 30% withholding applies to gross rental payments from Kenyan property (Monthly Rental Income Tax — MRI, introduced 2023 at 7.5% for gross rents up to KES 288,000/year; 30% for larger rental income). KES Currency transfers: Kenya shilling is freely convertible. No formal capital controls. International wire transfers via Kenyan banks (Equity Bank, KCB, Co-operative Bank, NCBA, Standard Chartered Kenya) with standard AML documentation. Wise from Kenya: well-supported for KES to GBP/USD/EUR transfers — popular for diaspora remittances. For large transfers (property proceeds): coordinate directly with bank.