Instalment Tax Calculator Kenya 2026

What instalment tax is

Instalment tax is a way of paying a year's income tax in advance, in parts, instead of in one lump after the year ends. It applies to businesses and individuals with business or rental income that are not fully covered by PAYE or other withholding. The idea is to spread the cash flow burden for taxpayers and for the government.

The schedule

The tax is paid in four instalments, each a quarter of the total (the shares are in the rates table below), due by the 20th day of the 4th, 6th, 9th and 12th months of the accounting year. For a company whose year runs from January to December, that means 20 April, 20 June, 20 September and 20 December. For a year starting in July, the due dates are 20 October, 20 December, 20 March and 20 June.

The calculator asks which month your accounting year ends in, and works out the actual calendar dates for the year you choose.

How the base amount is chosen

The instalments are based on the estimated tax for the year. A taxpayer may instead base them on the tax shown on the previous year's return, increased by a set percentage. The calculator offers both, and applies the uplift held in the rates for this site, which is 1.1 times last year's tax. Whichever basis you use, you must pay the full total across the four dates. If your actual tax for the year ends up higher than the instalments, the difference is payable with the final return. If it ends up lower, you get a credit or refund.

A worked example

Estimated tax of KES 400,000 for a calendar-year taxpayer gives four instalments of KES 100,000. Basing the instalments on last year's tax of KES 400,000 with the uplift gives KES 440,000.00 in total.

Who must pay

The rules cover those expected to owe more than a minimum amount after taking credits. Employees with only PAYE usually owe nothing extra. A company that has just started and has no estimate may need to make a first-year estimate based on its projections. Where the law exempts someone from instalment tax, they pay the whole tax with the return. If you are unsure whether you are caught, ask a tax adviser.

What happens if you miss an instalment

Late or short payments attract interest and penalties. Underestimating tax on purpose is penalised: if the estimate is much lower than the final tax, the taxpayer may have to pay extra. Use the penalty calculator to see the cost of paying late. Paying through iTax produces a payment slip you should keep.

Instalments and credits

Withholding tax and other credits reduce the instalments you need to pay: they do not change the dates. Deduct credits when you estimate tax, and keep the withholding certificates for the return.

Practical tips

• Put the four dates in a calendar as soon as the year starts.
• Revisit the estimate midyear if profits change a lot, and adjust the remaining instalments.
• Keep the iTax payment confirmation for each instalment.
• Landlords on the annual route, and sole traders, can use the same schedule.

About the result

The schedule and uplift come from the rates held for this site. This is an estimate for information only, and a tax adviser should confirm what applies to your business.

Keeping up with changes in profit

An estimate is only as good as the information behind it. If profit is climbing faster than planned, revise the estimate after the first quarter so that later instalments catch up, since underpaying early instalments can lead to interest. If profit is falling, you can also reduce later instalments by submitting a revised estimate, but be careful: if the final tax turns out much higher than the estimate, KRA can charge a penalty. Reviewing the numbers each quarter, with your accountant, is a sensible habit.

Guides, tools and templates for this topic

Read next: How to build a 12-month cash flow forecast for a small business, KRA penalties and interest explained: what late filing and payment cost, The KRA filing calendar for small businesses: every monthly and yearly deadline

Related calculators: Corporation Tax Calculator, KRA Late Filing Penalty and Interest Calculator, Turnover Tax Calculator

Excel templates: Instalment tax planner

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