Amount of Money Kenyans Earning KSh 50,000 Will Pay in Taxes in the New Zero PAYE Plan

Employees earning more than KSh 50,000 a month are set to take home less under a Treasury plan that raises the tax-free income threshold to KSh 32,333 and scraps the KSh 2,400 monthly personal relief for all workers.

Treasury Cabinet Secretary John Mbadi confirmed the details on Thursday, saying the changes respond to genuine complaints that recent government decisions had eroded the value of payslips.

“For someone who is earning a lot of money it may sound ridiculous, but for someone who is earning that 32,000, it is something,” he said. President William Ruto unveiled the policy direction during Mashujaa Day celebrations in Eldoret on October 20.

Under the current structure, the first KSh 24,000 is taxed at 10%, but the personal relief effectively cancels that liability. The new plan would exempt the first KSh 32,333 entirely, while the higher rates of 25%, 30%, 32.5% and 35% stay the same.

According to a report by NTV, workers earning between KSh 32,334 and KSh 50,000 would save up to KSh 596 monthly, while those on exactly KSh 32,333 could gain about KSh 2,083.

Above KSh 50,000, losing the relief pushes deductions up. An employee on KSh 60,000 would pay KSh 473 more, one on KSh 100,000 would pay KSh 892 more, and a worker on KSh 200,000 would pay KSh 3,867 more every month.

Kenya has about 3,468,997 formal workers, of whom 1,328,625 are already exempt from PAYE. The change would remove another 362,846 from the tax bracket, lifting the exempt share from roughly 38% to nearly 49%.

National Assembly Finance and Planning Committee chair Kuria Kimani said the implementing bill is expected before Parliament next week. Until it is passed and gazetted, employers must continue applying existing PAYE rules.

The Kenya Bankers Association had separately proposed a five-percentage-point cut across all PAYE bands, which Treasury has not adopted.

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