Tax Reliefs Calculator Kenya 2026

Deductions versus reliefs

Kenyan income tax has two ways of lowering your bill, and they work differently. A deduction reduces the pay that is taxed, so its value depends on your tax band. A relief is subtracted from the tax itself, so it is worth the same amount to everyone. Knowing which is which explains why a pension contribution saves a high earner more than a low earner, while personal relief is the same for all.

The reliefs and deductions covered

• Personal relief of KES 2,400 a month is given to every resident employee automatically. It is not something you claim: payroll should apply it.
• Insurance relief is 15% of the premiums you pay on qualifying life, education and health policies, capped each month. You usually claim it through your employer by giving them the policy certificates, or on your annual return.
• Pension contributions are deductible up to KES 30,000 a month, which is a combined cap that includes your NSSF contribution.
• Mortgage interest on a loan used to buy or build your own home is deductible up to KES 30,000 a month. You need a certificate of interest paid from the lender.
• Home Ownership Savings Plan (HOSP) deposits stopped being deductible after the Finance Act 2020 removed the relief, so the calculator now allows no deduction for them (it was KES 96,000 a year).
• Post-retirement medical contributions are deductible up to KES 15,000 a month.

How the calculator shows the saving

For each item you enter, the calculator runs your payroll with only that item and reports how much PAYE it saves each month. It then runs everything together, because the savings do not simply add up: a deduction can move you into a lower tax band, and caps limit what can be claimed.

A worked example

For a basic salary of KES 100,000 with insurance premiums of KES 10,000 a month, the insurance relief alone saves KES 1,500.00 of PAYE each month. Add a mortgage interest figure or a pension contribution and the combined saving grows.

How to claim

Reliefs and deductions are only given if the right paperwork reaches the right place. Employees normally give their payroll department the insurance certificate, mortgage interest certificate or pension statement, and payroll adjusts PAYE from that month on. If payroll missed a claim, you can claim it on your annual return and receive a refund through iTax. Keep the original certificates for at least five years in case KRA asks for them.

Common questions

• Does my SHIF count as insurance? SHIF and the Housing Levy are treated separately from private insurance: for most periods they are deductible before tax rather than eligible for insurance relief.
• Is there a limit on relief? Yes. Each relief has a cap, shown in the "rates used" table, so premiums above the cap save no extra tax.
• Should I buy insurance only for the tax saving? No. Relief returns a fraction of what you pay, so it lowers the cost but does not make a policy free.

About the figures

Caps and rates are held as editable rates and change by Finance Act, so always check the date. The result is an estimate for information only and is not tax advice.

Making sure payroll applies your reliefs

A relief does nothing until payroll knows about it. At the start of each year, hand over a copy of your insurance policy certificates, your mortgage interest certificate and your pension statement, and ask for confirmation in writing. Review your first payslip after that, to see that PAYE dropped as expected. If a certificate arrives late in the year, ask payroll to correct earlier months or claim the difference on your annual return.

Guides, tools and templates for this topic

Read next: SHIF contributions explained: rate, minimum and who pays, Gross pay versus net pay: how to negotiate a salary in Kenya, How PAYE is calculated in Kenya, step by step

Related calculators: PAYE Calculator, Annual Tax Return Estimator (P9), Disability Tax Exemption Checker

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