Kenya taxation guide | Updated October 2026
Kenya Income Tax Rates 2026: Personal Tax, Capital Gains and Corporate Tax
A practical guide to Kenya's individual income tax bands, PAYE, tax residency, property capital gains tax and corporation tax, with historical 2018-2019 figures retained for reference.
Important: The historical 2018-2019 tables below are not current rates. For present-day compliance, consult the Kenya Revenue Authority (KRA) and the Income Tax Act (Cap. 470), as amended. Special regimes and later legislative changes can affect particular taxpayers.
Individual Income Tax and PAYE Rates
Kenya's Income Tax Act (Cap. 470) charges tax on taxable income derived from or accrued in Kenya. Employers generally deduct Pay As You Earn (PAYE) on employment income. Under the Finance Act 2023 bands published by KRA, effective 1 July 2023, the following progressive rates apply:
| Annual taxable income (KSh) | Monthly taxable income (KSh) | Marginal rate |
|---|---|---|
| First 288,000 | First 24,000 | 10% |
| Next 100,000 | Next 8,333 (approx.) | 25% |
| Next 5,612,000 | Next 467,667 (approx.) | 30% |
| Next 3,600,000 | Next 300,000 | 32.5% |
| Above 9,600,000 | Above 800,000 | 35% |
Eligible resident individuals receive personal relief of KSh 2,400 per month (KSh 28,800 per year). Relief reduces tax payable rather than taxable income. PAYE is normally filed and remitted by the employer by the ninth day of the following month. See the official KRA PAYE guidance.
Resident and Non-Resident Individuals
Tax residence is determined under the statutory residence tests, including a permanent home and physical presence criteria. Both resident and non-resident individuals may be taxed on Kenya-source income, but reliefs, withholding obligations and treaty treatment may differ. An individual's nationality alone does not determine tax residence. Confirm the applicable test and any double-taxation agreement before filing.
Capital Gains Tax in Kenya
Capital Gains Tax (CGT) generally applies to chargeable gains on transfers of property situated in Kenya. Under the Eighth Schedule to the Income Tax Act, as amended by the Finance Act 2022, the general CGT rate increased from 5% to 15% of the net gain from 1 January 2023. The gain is broadly the transfer value less allowable adjusted acquisition and transfer costs. CGT is ordinarily a final tax.
| Transaction / period | General rate |
|---|---|
| Chargeable property transfers from 1 January 2023 | 15% of net gain |
| Chargeable property transfers during 2018-2019 | 5% of net gain (historical) |
Qualifying transfers, including certain family transfers, private residences and approved reorganisations, may be exempt subject to statutory conditions. Some indirect disposals involving interests in entities holding Kenyan immovable property may also fall within CGT. Check the KRA capital gains tax guidance for calculations, exemptions and payment timing.
Corporation Tax Rates in Kenya
Corporation tax applies to taxable profits of companies and other qualifying corporate entities. The general resident-company rate is 30%. KRA's published general rate for a non-resident company carrying on business through a Kenyan permanent establishment is 37.5%; treaty provisions, statutory amendments and the applicable tax year should be checked before relying on this rate.
| Corporate taxpayer | General rate |
|---|---|
| Resident company | 30% |
| Non-resident company / Kenyan branch under KRA's general published guidance | 37.5% (verify for applicable year) |
| Qualifying entities under special investment, export or housing regimes | Special rates or exemptions may apply |
A company may be resident where it is incorporated in Kenya or its management and control is exercised in Kenya, subject to the statutory rules. Corporate returns are generally due within six months after the end of the accounting period. See KRA corporation tax guidance.
Historical Kenya Income Tax Rates for 2018-2019
The original article covered 2018-2019. The following historical rates are retained to help readers researching those years. They should not be applied to current payrolls.
Individual income tax bands for 2018
| Annual taxable income (KSh) | Rate |
|---|---|
| 0 to 147,580 | 10% |
| 147,581 to 286,624 | 15% |
| 286,625 to 425,667 | 20% |
| 425,668 to 564,710 | 25% |
| Over 564,710 | 30% |
Individual income tax bands for 2017
| Annual taxable income (KSh) | Rate |
|---|---|
| 0 to 134,164 | 10% |
| 134,165 to 260,567 | 15% |
| 260,568 to 386,970 | 20% |
| 386,971 to 513,373 | 25% |
| Over 513,373 | 30% |
Earlier historical income bands before 2017 also used marginal rates from 10% to 30%, but the old source table contained inconsistent income boundaries; consult the relevant year's statutory schedules for exact historical assessments.
Filing and Compliance
- PAYE: Employers generally submit monthly PAYE returns and remit tax by the ninth day of the following month.
- Individual annual returns: Generally due by 30 June following the income year, subject to applicable requirements.
- Corporate returns: Generally due within six months after the accounting period ends.
- Capital gains: Declare the transfer and settle CGT in accordance with KRA's current transfer and payment rules.
Taxpayers can access electronic services through the KRA iTax portal.
Official Sources and Legal References
- KRA: PAYE and personal income tax rates
- KRA: Capital Gains Tax
- KRA: Understanding Corporation Tax
- KRA: Individual Income Tax
This guide is general information, not a substitute for the consolidated Income Tax Act, Finance Acts, relevant regulations or professional advice. Confirm changes applicable to your year of income and taxpayer category.