Turnover Tax Calculator Kenya 2026

What turnover tax is

Turnover tax (TOT) is a simplified tax for small businesses. Instead of working out profit, deducting expenses and filing a full income tax return, a qualifying business pays a small percentage of its gross sales every month. The current rate is 3%. It replaces income tax on that business income, and it is meant to reduce paperwork for small traders.

Who qualifies

TOT is for a resident person, an individual or a company, with annual turnover from business of between KES 1,000,000 and KES 25,000,000. Several kinds of income are excluded, including income from employment, rental income, management or professional services and some income from certain regulated activities. A business above the upper limit must use ordinary income tax and, from the VAT threshold, VAT.

You must register for TOT on iTax before you can file. A business that registers but is later ineligible has to move back to income tax.

How the calculator works

You enter your sales for the period, say whether it is for a month or a whole year, and optionally your annual turnover. The calculator applies the rate to the sales and tests eligibility using the annual figure. If you entered a month, it multiplies by twelve to estimate the year when you have not given an annual figure. It also asks whether the business is a professional or management service, which is not eligible.

A worked example

With sales of KES 500,000 in a month and annual sales of KES 6,000,000, turnover tax is KES 15,000.00 for the month. The result confirms that the turnover is inside the range.

Filing and payment

Returns are filed monthly, and the tax is paid by the 20th of the following month. A nil return is still required in a month with no sales. Late filing and late payment attract penalties, so set a reminder. Keep records of daily sales, cash register or eTIMS invoices and bank statements. The eTIMS electronic invoicing system is now expected for many businesses.

TOT versus income tax

For a business with high costs, income tax on actual profit can be lower than TOT on gross sales, because TOT does not allow any expense deduction. A business with low costs, or poor records, may find TOT cheaper and simpler. The decision is made when you register, and you can change regime under the rules.

TOT and VAT

TOT is different from VAT. A business whose taxable supplies reach the VAT registration threshold must register for VAT in addition to its other tax obligations. Use the VAT registration checker to test your sales against the threshold.

What this calculator does not decide

It does not decide whether your type of income is excluded, and it does not check whether you are registered. Rules on TOT have changed more than once, including the rate and the limits, so use the date box to test other periods.

The result is an estimate for information only. A tax adviser or KRA can confirm whether your business qualifies.

Moving between regimes

A business that grows past the upper turnover limit must leave turnover tax and move to income tax, and one that drops below the lower limit may have a different position. Review your turnover regularly, and tell KRA when you cross a limit. Keep your records in a form that works under both regimes, with sales, purchases and expenses, so that a switch does not leave you without the information you need to compute profit.

If you are close to the lower limit of the range, consider whether registering is worthwhile. A business below it may have no turnover tax to pay at all, but it still has records to keep and, in some cases, other obligations, so take advice before you decide to register or to stay unregistered.

Guides, tools and templates for this topic

Read next: Bank reconciliation step by step: match your books to your bank, How to build a 12-month cash flow forecast for a small business, KRA penalties and interest explained: what late filing and payment cost

Related calculators: VAT Registration Threshold Checker, VAT Calculator, Airbnb and Short-Stay Income Tax Calculator

Excel templates: Turnover Tax (TOT) tracker

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