Pay As You Earn (PAYE)-KRA-the ultimate guide
PAYE is an individual income tax deducted from employees' salaries by their employers and submitted to the KRA.
Pay As You Earn (PAYE) is one of the self-taxes you may have encountered while on the iTax portal. Normally, you will file for PAYE if your salary is Kshs 24,000 and above.
These deductions should be made and sent to the authorities before date 9 of the following month. Any day later than that will attract penalty charges.
We go into details in this article, introducing you to everything you need to know about PAYE as follows;
Here's a step by step guide on how you can file for PAYE as follows;
Here's a simple video tutorial you can use for filing your PAYE.
PAYE is calculated using the PAYE calculator provided on the KRA portal for tax calculations. You will fill in the questions concerning the type of PAYE deductions you want to make, then click calculate. You can also download the KRA PAYE calculator from the apple and google stores, respectively.
The employee's basic salary + allowances they get + commissions.
Gross income - all deductions that are to be made.
PAYE multiplied by the net taxable income
Filing returns is a must do obligation for every individual, and failure to do that will have you facing inevitable consequences for your actions. As an employer, you must submit and file your employee's PAYE returns to the Kenya Revenue Authorities on or before the 9th of the following month.
Failure to do that will result in you paying an amount of Kshs 10,000 or 25% amount of the tax due. If you pay late, you will also be charged 5% of the tax due and 1% for each month your late payment is only paid for once you complete the payments.
There are so many benefits an employee can get from a given company. Some may be chargeable, and some not. Let's look at some that are chargeable benefits;
We have certain deductions subjected to employees from their salaries that will be added to their PAYE mortgage interest deductions.
We have two types of tax reliefs under PAYE;
Any person working in a stable employment sector should be able to participate in PAYE filings and have them submit to the KRA.
Paying for PAYE is important to employees who are working in profitable companies. By doing that, the KRA portal eases your work and saves you lots of time taken for calculations since KRA has an online calculator for easy work done.
NOTE: You can also check out our short YouTube video made on the PAYE tax filing.
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