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Freelancer turnover tax versus annual tax comparison

Enter twelve months of freelance income and costs and see whether turnover tax or normal income tax costs you less.

Freelancer turnover tax versus annual tax comparison template

Freelancers often can choose between turnover tax on gross income and normal income tax on profit, and the better choice depends on how big your costs are. This workbook takes monthly income and expenses, computes the tax under each route with the current rates, checks whether you are within the turnover tax limits and shows which is cheaper and by how much.

Freelancers, consultants, designers, developers and content creators, and the accountants who advise them, who want to choose the cheaper route and plan their cash for tax.

What is included

  • Twelve months of income and expenses
  • Tax under the annual route, band by band
  • Turnover tax on gross income
  • Eligibility check against the limits
  • Cheaper route and the saving

Screenshots

  • Income and expenses by month of Freelancer turnover tax versus annual tax comparison

How to use it

  1. Check the rates, limits and bands on the Rates sheet.
  2. Enter each month's income and expenses.
  3. Read the tax under both routes and whether turnover tax is available.
  4. Use the cheaper route result when you set aside tax each month.

Templates are tools to help with your own records. They are not tax or legal advice. Check the figures against official sources before filing or paying.

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What the freelancer turnover tax versus annual tax comparison does

Freelancers often can choose between turnover tax on gross income and normal income tax on profit, and the better choice depends on how big your costs are. This workbook takes monthly income and expenses, computes the tax under each route with the current rates, checks whether you are within the turnover tax limits and shows which is cheaper and by how much.

Who it is for

Freelancers, consultants, designers, developers and content creators, and the accountants who advise them, who want to choose the cheaper route and plan their cash for tax.

How to use the workbook

  1. Check the rates, limits and bands on the Rates sheet.
  2. Enter each month's income and expenses.
  3. Read the tax under both routes and whether turnover tax is available.
  4. Use the cheaper route result when you set aside tax each month.
  5. Save a copy under a new name for each month or year, so earlier records stay as they were.

What is inside

  • Twelve months of income and expenses
  • Tax under the annual route, band by band
  • Turnover tax on gross income
  • Eligibility check against the limits
  • Cheaper route and the saving

The workbook has these sheets: Instructions, Compare, Months, Rates. Yellow cells are for you to fill in and grey cells calculate by themselves, so leave the grey cells alone. The example rows show how it works; type over them with your own entries.

Tips for getting it right

  • Turnover tax suits low-cost work; high costs favour the annual route.
  • Include all income, in shillings, at the rate on the day you received it.
  • Check whether your kind of work is excluded from turnover tax.
  • Revisit the comparison during the year as income changes.

Why keep this record

Most tax trouble comes from late or missing records rather than from the tax itself. When the figures are collected as they happen, preparing a return becomes a matter of copying totals, not of searching for receipts. A workbook that follows the same layout as the return also makes it easier to spot a number that looks wrong before KRA does, and to explain it if asked.

Questions people ask

Do I need to know Excel formulas? No. Type into the yellow cells and the rest is worked out for you. The formulas are visible if you want to see how a figure is reached.

Can I add rows or change the layout? You can add your own columns to the right and your own notes. If you insert rows inside a table, copy the grey formula cells down so the new rows calculate too.

Will it work on my phone or in Google Sheets? Yes for viewing and typing, but dropdown lists and the charts look best in desktop Excel or LibreOffice.

Keeping it safe and up to date

Tax figures change with each Finance Act, so check the Rates sheet against KRA's current guidance before you file. Keep the supporting documents with the workbook, and keep each year's copy for at least five years in case KRA asks for proof.

Read the KRA filing calendar for small businesses for the wider picture. Free calculators that go with it: Freelancer tax calculator, Turnover tax calculator. See more tax templates or ask us for a custom one.

The workbook works in Microsoft Excel, LibreOffice and Google Sheets. It is a tool to help you work out and record figures, not tax, legal or accounting advice, and it is not affiliated with the Kenya Revenue Authority. If something does not work as described, contact us and we will put it right.

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