Two employees can earn the same salary and take home different amounts because of tax reliefs. A relief is not a deduction from your pay. It is an amount taken off the tax itself, which makes it more valuable than a deduction of the same size. This guide explains each relief an employee can use in Kenya, how they interact, and how to check that your payslip applies them.

Relief versus deduction

A deduction reduces the income on which tax is charged. If you deduct KES 10,000 and your top rate is 30%, you save KES 3,000. A relief reduces the tax bill directly. A KES 2,000 relief saves KES 2,000 regardless of your rate. Kenya uses both: pension and certain levies are deducted before tax is worked out, and reliefs are subtracted afterwards.

Personal relief

Every resident employee is entitled to personal relief of KES 2,400 a month. It is applied automatically by payroll once your employer has your KRA PIN on record. Because the first band of pay is taxed at 10%, personal relief is what makes the first slice of earnings effectively tax free. If you have two jobs, only one employer should apply it: see tax when you have two jobs.

Insurance relief

If you pay premiums on a life, education or health insurance policy on your own life or your spouse's or children's lives, you can claim insurance relief equal to a percentage of the premiums, up to a monthly cap. The current rate and cap are held in the rates table: 15% of premiums, to a maximum relief each month. Policies must be with insurers licensed in Kenya, and the premium must be yours. Our step-by-step guide to claiming insurance relief shows the documents to give your employer.

SHIF and the Affordable Housing Levy

Contributions to the Social Health Insurance Fund and the Affordable Housing Levy are now deducted from your pay before PAYE is worked out. Read housing levy and SHIF now deductible before PAYE for the reasoning. They are no longer reliefs.

Pension and NSSF

Your NSSF contributions and contributions to a registered pension scheme reduce taxable pay up to the legal limits. NSSF is deducted automatically. For a private pension, ask payroll to deduct it before tax, and see pension contributions and tax relief for the limit.

Disability and mortgage interest

Persons with a disability who hold a KRA exemption certificate are exempt from tax on a large slice of employment income: use the disability exemption checker and read disability tax exemption explained. Homeowners paying interest on a loan used to buy or build their home can deduct that interest up to a yearly cap, covered in mortgage interest relief for homeowners.

A worked example

Take an employee with a gross salary of KES 150,000, NSSF of KES 6,480 on the capped tiers, SHIF at the statutory rate, and the housing levy at 1.5%. Payroll first removes NSSF, SHIF and the levy to reach taxable pay, applies the PAYE bands, then subtracts personal relief and any insurance relief. Try your own figures in the PAYE calculator: each line of the result shows the order of the steps. The tax reliefs calculator isolates the relief part so you can see what an insurance premium is worth.

Checklist: are you getting every relief?

  • Is your PIN on file with your employer? Without it, relief and PAYE can be mishandled.
  • Did you give payroll your insurance premium certificate for the year?
  • Is only one job applying personal relief?
  • Is your pension deducted before tax, not after?
  • If you are disabled, has your employer seen your exemption certificate?

Compare your payslip with a calculation line by line, using how to read your payslip. A mistake is far easier to fix in the month it happens than at the end of the year, when you must claim it back with your return. Our annual income tax estimator workbook totals the year so you can spot gaps early.

What to do if a relief was missed

Tell payroll in writing and attach the proof. If the employer cannot correct it, the amount shows up when you file your annual return, where the overpayment is credited or refunded: see claiming a PAYE refund. Reliefs change with Finance Acts, so the figures on this page come from the rates held for the site and show the date they were last checked.

Frequently asked questions

Is personal relief given automatically? Yes, payroll applies it to every resident employee each month. You only need to act if you have two jobs or if your employer has no record of your KRA PIN.

Can I claim relief for my spouse's insurance policy? Premiums on policies covering your own life, your spouse's or your children's lives qualify, provided the insurer is licensed in Kenya and you pay the premium.

Do reliefs reduce my taxable pay? No. They reduce the tax after it has been worked out, which is why a relief of a given size is worth more than a deduction of the same size.

What happens if I only learn about a relief after the year ends? Claim it on your annual return. The overpayment is then credited against other tax or refunded to you.