The Government, through the Kenya Tax Laws (Amendment) Act 2020, revised the individual monthly Pay-As-You-Earn (PAYE) tax brackets and increased the monthly personal relief with effect from April 2020. Through these changes, monthly gross pay of up to KES. 24,000 per month shall have a 100% tax relief. The maximum PAYE band has also been reduced from 30% to 25%. This is the third expansion of PAYE rates in four years. With this latest expansion, the government aims to protect jobs in the economy and also provide some certainty for employers in the wake of the Covid-19 crisis and its adverse effects on the Kenyan economy.
Therefore, starting with the payroll processing for April 2020 and the PAYE return due on or before 9th May 2020, employers, employees and the general public are advised to implement the following changes to their payroll processing: