Withholding Tax Calculator Kenya 2026

How withholding tax works

Withholding tax is income tax collected at the moment a payment is made. Instead of paying the full amount to a supplier, consultant or shareholder and leaving them to declare it later, the payer keeps part of the payment and sends it to KRA. The payer is called the withholding agent, and the person paid receives a net amount plus a certificate for the tax withheld.

For a resident, withholding tax on many payments is a credit against that person's final tax. For a non-resident it is often the final tax, which means no further tax is due on that income in Kenya.

Types of payment and rates

The rate depends on the type of payment and on whether the payee is resident. The calculator covers these categories, with the rates held for this site:

• Management or professional fees, including consultancy, legal and audit fees.
• Contractual fees, paid under a contract for services or works.
• Dividends paid to shareholders.
• Interest on loans and deposits.
• Commissions to agents and other commission recipients.
• Royalties for the use of intellectual property.

The "rates used" table on this page lists the current rates for each type, split between residents and non-residents. Rates differ because the law treats each kind of income differently, and double tax treaties may reduce the non-resident rate.

A worked example

On a professional fee of KES 100,000 paid to a resident consultant, the tax to withhold is KES 5,000.00, and the consultant receives KES 95,000.00. For a non-resident, the withheld tax is KES 20,000.00.

What the agent must do

1. Work out the tax on the gross payment before VAT, where VAT is charged separately.
2. Deduct it when you pay.
3. Pay it to KRA by the 20th of the following month, through iTax, using your own login.
4. Give the payee a withholding tax certificate, so they can claim the credit on their return.

A payer who fails to withhold can be asked to pay the tax out of their own pocket, plus penalties and interest.

Thresholds and exemptions

Some payments are below a minimum amount, where withholding does not apply, and some payees are exempt, for example certain approved institutions. The calculator does not apply these tests, so check whether withholding applies before you use the result. Payments to a resident who holds an exemption certificate are not withheld. The rules differ for payments of rent, which the rent withholding calculator covers, and for investment income, which the dividends and interest calculator covers.

Withholding VAT is separate

Withholding VAT is a different obligation that applies where certain appointed agents buy taxable goods and services. It is not the same as withholding income tax, and some payments attract both. The withholding VAT calculator covers the second.

For the person being paid

Ask for the certificate every time, check that the amount matches what you were paid, and claim it on your annual return. If the credit is greater than your tax for the year, you can claim a refund or carry it forward. Keep the certificates for at least five years.

About the figures

The rates come from the rates held for this site, which are listed as unverified until they have been checked against KRA's table. Use the result as an estimate for information only.

Paying the right people

A business that withholds tax needs to know which payees are subject to it. Ask new suppliers whether they hold a tax exemption certificate, record their residence status and PIN, and decide at the point of payment which category the payment falls into. Contracts that mix services, such as consultancy and materials, may need to be split. Keeping a payment register with the gross amount, the tax withheld and the date you paid KRA makes the monthly return quick to prepare.

Guides, tools and templates for this topic

Read next: Withholding tax in Kenya explained: rates, agents and credits, How to get a KRA PIN, VAT for small businesses in Kenya: when to register and what to charge

Related calculators: Withholding VAT Calculator, Withholding Tax on Rent Calculator, Tax on Dividends and Interest Calculator

Excel templates: Project budget and cost tracker, Supplier bills and accounts payable tracker, Withholding tax schedule

More in the blog and the template shop, or ask for a custom template.