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Taxes, Benefits and Family

All about Taxes, Benefits and Family, What Must I Pay in Tax?, What About Tax and My Partner, Benefits and Family Members and more on Mywage Kenya.

What is tax relief?

In Kenya tax relief is granted on a monthly basis. There are basically two types of tax relief: personal relief and insurance relief.

Personal Relief:

Insurance Relief:

What does the tax law say if one has a partner?

In Kenya the Income Tax Act (cap 470), Section 30 allows for personal relief at the rate determined under the third schedule, which sets rates of relief. Presently personal relief on taxable income is set at 1,162 shillings per month, which accumulates to 13,942 shillings per year. This is a uniform relief and employers are advised to automatically grant personal relief to all employees irrespective of their marital status. The income of a married couple is treated separately for tax purposes, even though there is an option of joint filing. However, even with joint filing, the husband’s and wife’s incomes are not lumped together.

Do tax reliefs cover children’s education?

Yes. In Kenya the Income Tax Act (cap 470), Section 31 allows for insurance relief on premiums paid for education policies for resident individuals if he/she proves that they have paid a premium for education insurance, and provided that the premiums paid have a maturity period of at least 10 years. Presently the insurance relief is at 15% of premiums paid subject to a maximum Kshs. 5,000 per month (or Kshs. 60,000 per annum).

Do disabled persons qualify for tax relief?

Yes. Section 12 (3) of the Persons with Disability Act, 2003, provides for all persons with disabilities who are in receipt of an income to apply to the Minister of Finance for exemption from income tax and any other levies on such incomes. Based on this act the tax-exemption policy qualifies that for disabled persons, the first 150,000 shillings of their total income per month is exempt from tax. In addition such a person is allowed to deduct from his chargeable income any expenses in respect of “home care” and “personal care” subject to a maximum of 50,000 shillings per month (paragraph 5(2) of the regulations)

The Tax Exemption Section 35 (1) Persons with Disability Act, provides for persons to apply to the Minister responsible for Finance for exemption from income tax and any other levies on such incomes. Such application has to be done after every three years.

What about old age and tax relief?

The Income Tax Act (cap 470), Section 31 allows for a person who has a life insurance policy to receive a tax relief of 15% of the premium subject to a maximum of Kshs. 5,000 per month or Kshs. 60,000 per year. The rates of tax are reviewed from time to time and the tax relief at any one time can authoritatively be confirmed from the Kenya Revenue Authority.

In addition, Section 22A (2) specifies that deductions in respect of contributions made to registered funds of the employer shall be limited to 20, 000 shillings per month of service or a maximum of 240,000 shillings per annum. The benefits payable under retirement benefit schemes are tax relief.

I have an age dependent relative. Do I qualify for tax relief?

Kenya does not clearly provide for tax relief in case an employee is caring for an aged relative.

What about pay if my partner has an accident?

If the accident occurs outside the workplace it is treated as normal sickness. Under the Employment Act, Section 7 (3), an employee is entitled to paid sick leave after a period of two consecutive months of service. Thus, the Employment Act provides the minimum period of entitlement while the Regulation of Wages Order, subsidiary to the Regulations of Wages and Conditions of Employment Act, section 12, provides the longest period granted by law.

The minimum period of entitlement is seven days with full pay and seven days with half-pay for every twelve months, while the longest period of entitlement is thirty days with full pay and fifteen days with half-pay. The employee is however expected to produce a certificate of incapacity to work signed by a duly qualified medical practitioner. And the notice should be given to the employer within a period of seven days.

If an accident occurs at the workplace then Part III of the Work Injury Benefits Act, 2007, provides for compensation to employees for work related injuries and diseases contracted in the course of their employment and for connected purposes

What about pay if my partner is sick?

Employment Act, section 7 (3) and Regulation of Wages Order, subsidiary to the Regulations of Wages and Conditions of Employment Act, section 12, applies in sickness as well.

What about social security schemes and contributions?

Contributions made to the national Social Security Fund qualify as a statutory deduction.

Social security contributions are made both by employee and employer at a rate of 5% each of payroll to the National Social Security Fund, up to an annual maximum of KES 2,400 per employee.

Where an employee is a member of a pension scheme pr a provident fund and at the same time the National social security fund (NSSF) the maximum allowable contributions should not exceed KES 20,000 per month in aggregate.

The law does not provide for tax relief in case of social security contributions.

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In Kenya tax relief is granted on a monthly basis. There are basically two types of tax relief: personal relief and insurance relief.

Personal Relief:

Insurance Relief:

What does the tax law say if one has a partner?

In Kenya the Income Tax Act (cap 470), Section 30 allows for personal relief at the rate determined under the third schedule, which sets rates of relief. Presently personal relief on taxable income is set at 1,162 shillings per month, which accumulates to 13,942 shillings per year. This is a uniform relief and employers are advised to automatically grant personal relief to all employees irrespective of their marital status. The income of a married couple is treated separately for tax purposes, even though there is an option of joint filing. However, even with joint filing, the husband’s and wife’s incomes are not lumped together.

Do tax reliefs cover children’s education?

Yes. In Kenya the Income Tax Act (cap 470), Section 31 allows for insurance relief on premiums paid for education policies for resident individuals if he/she proves that they have paid a premium for education insurance, and provided that the premiums paid have a maturity period of at least 10 years. Presently the insurance relief is at 15% of premiums paid subject to a maximum Kshs. 5,000 per month (or Kshs. 60,000 per annum).

Do disabled persons qualify for tax relief?

Yes. Section 12 (3) of the Persons with Disability Act, 2003, provides for all persons with disabilities who are in receipt of an income to apply to the Minister of Finance for exemption from income tax and any other levies on such incomes. Based on this act the tax-exemption policy qualifies that for disabled persons, the first 150,000 shillings of their total income per month is exempt from tax. In addition such a person is allowed to deduct from his chargeable income any expenses in respect of “home care” and “personal care” subject to a maximum of 50,000 shillings per month (paragraph 5(2) of the regulations)

The Tax Exemption Section 35 (1) Persons with Disability Act, provides for persons to apply to the Minister responsible for Finance for exemption from income tax and any other levies on such incomes. Such application has to be done after every three years.

What about old age and tax relief?

The Income Tax Act (cap 470), Section 31 allows for a person who has a life insurance policy to receive a tax relief of 15% of the premium subject to a maximum of Kshs. 5,000 per month or Kshs. 60,000 per year. The rates of tax are reviewed from time to time and the tax relief at any one time can authoritatively be confirmed from the Kenya Revenue Authority.

In addition, Section 22A (2) specifies that deductions in respect of contributions made to registered funds of the employer shall be limited to 20, 000 shillings per month of service or a maximum of 240,000 shillings per annum. The benefits payable under retirement benefit schemes are tax relief.

I have an age dependent relative. Do I qualify for tax relief?

Kenya does not clearly provide for tax relief in case an employee is caring for an aged relative.

What about pay if my partner has an accident?

If the accident occurs outside the workplace it is treated as normal sickness. Under the Employment Act, Section 7 (3), an employee is entitled to paid sick leave after a period of two consecutive months of service. Thus, the Employment Act provides the minimum period of entitlement while the Regulation of Wages Order, subsidiary to the Regulations of Wages and Conditions of Employment Act, section 12, provides the longest period granted by law.

The minimum period of entitlement is seven days with full pay and seven days with half-pay for every twelve months, while the longest period of entitlement is thirty days with full pay and fifteen days with half-pay. The employee is however expected to produce a certificate of incapacity to work signed by a duly qualified medical practitioner. And the notice should be given to the employer within a period of seven days.

If an accident occurs at the workplace then Part III of the Work Injury Benefits Act, 2007, provides for compensation to employees for work related injuries and diseases contracted in the course of their employment and for connected purposes

What about pay if my partner is sick?

Employment Act, section 7 (3) and Regulation of Wages Order, subsidiary to the Regulations of Wages and Conditions of Employment Act, section 12, applies in sickness as well.

What about social security schemes and contributions?

Contributions made to the national Social Security Fund qualify as a statutory deduction.

Social security contributions are made both by employee and employer at a rate of 5% each of payroll to the National Social Security Fund, up to an annual maximum of KES 2,400 per employee.

Where an employee is a member of a pension scheme pr a provident fund and at the same time the National social security fund (NSSF) the maximum allowable contributions should not exceed KES 20,000 per month in aggregate.

The law does not provide for tax relief in case of social security contributions.

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