Withholding tax guide for Kenyan businesses

What the withholding tax guide for kenyan businesses gives you

Withholding tax catches many businesses by surprise. This guide explains what withholding tax is, when a business must deduct it from a payment, the common rates for fees, rent, dividends, interest and payments to non-residents, how and when to remit, how to issue certificates, and how a supplier uses the credit, with a worked example and a checklist.

Who it is for

Business owners, accountants and finance officers who pay suppliers, landlords and service providers.

How to use it

1. Identify which of your payments are subject to withholding.
2. Deduct at the right rate before you pay.
3. Remit by the 20th of the next month and issue a certificate.
4. Record each deduction in a register.
5. Keep a signed or dated copy with your records, so you can show what was agreed or done.

What is inside

• When withholding applies
• Table of common rates
• Worked example
• Remittance and certificates
• Checklist and register

The document is a ready-to-print PDF with these parts: How it works, Common rates, Worked example, Your routine. It is laid out for A4, with the headings, tables and tick boxes already in place, so you can print it and fill it in by hand, or type into it with a PDF editor.

Tips for getting it right

• Check the supplier's residence status before you pay.
• Withhold on the amount before VAT.
• Never pay the full amount and 'remember later'.
• Give the supplier the certificate promptly.

Why it helps

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

Can I edit it? It is a PDF, so it is meant to be printed and completed, or filled with a PDF editor. If you want to change the wording, copy the text into Word or Google Docs and adapt it to your business.

Is it legal advice? No. It is a practical starting point written for Kenya. Rules change, so check the current position and ask a professional where the stakes are high.

Will it work on my phone? Yes for reading. For filling in and printing, a computer or a PDF app works best.

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: Withholding tax calculator, Vat calculator. See more tax templates or ask us for a custom one.

This document is general information, 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.

Related guides, calculators and templates

• Free calculator: Withholding Tax Calculator
• Free calculator: VAT Calculator
• Guide: How to set up an M-Pesa till or Paybill for your business and account for it
• Guide: KES 102M SportPesa jackpot: how much KRA takes and what the winner keeps
• Guide: How KRA uses data matching and what it means for you
• Another template: Dividend and withholding tax tracker
• Another template: Turnover tax vs VAT comparison workbook
• Another template: VAT basics cheat sheet for Kenyan businesses

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