What Is the Tax-Free Salary Threshold in Kenya 2026?
Introduction
Many employees in Kenya ask:
"At what salary do I start paying PAYE?"
"Is there a salary amount that is tax-free?"
"Why am I earning less but still seeing deductions?"
The answer can be confusing because Kenya does not simply say:
“Income below X is tax-free.”
Instead, the tax-free effect comes from combining:
- PAYE tax bands
- Personal tax relief
- Allowable deductions
Under the current PAYE structure and personal relief rules, the practical monthly
PAYE tax-free threshold remains approximately KSh 24,000 per month for resident
employees.
How the Tax-Free Threshold Works
Kenya uses a progressive tax system. The current PAYE structure is:
| Monthly Taxable Income | Tax Rate |
|---|---|
| First KSh 24,000 | 10% |
| Next KSh 8,333 | 25% |
| Next KSh 467,667 | 30% |
| Next KSh 300,000 | 32.5% |
| Above KSh 800,000 | 35% |
Resident taxpayers also receive:
Personal Relief = KSh 2,400 per month
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Why KSh 24,000 Becomes the Effective Tax-Free Threshold
The first:
KSh 24,000 × 10% = KSh 2,400
But personal relief is:
KSh 2,400
So:
Tax = KSh 2,400
Less relief = KSh 2,400
PAYE payable = KSh 0
That is why KSh 24,000 per month effectively becomes the PAYE tax-free level.
Monthly Examples
Here is the approximate PAYE position at different income levels.
| Gross Monthly Income | Approximate PAYE Position |
|---|---|
| KSh 20,000 | PAYE generally KSh 0 |
| KSh 24,000 | PAYE generally KSh 0 |
| KSh 30,000 | PAYE begins to apply |
| KSh 50,000 | Higher PAYE deductions apply |
| KSh 100,000 | Higher PAYE deductions apply |
Actual payslips may differ because of:
- NSSF deductions
- SHA contributions
- Pension contributions
- Insurance relief
- Other allowable deductions
Important Point: Tax-Free Does Not Mean No Deductions
Many people assume:
"No PAYE means no deductions."
Not necessarily.
You may still see deductions such as:
- SHA contributions
- NSSF contributions
- Pension contributions
- SACCO deductions
- Loan deductions
So someone earning below the PAYE threshold may still receive less than gross
salary.
Example
Suppose Sarah earns:
Gross salary = KSh 24,000
Possible deductions:
- SHA
- NSSF
PAYE:
KSh 0
Take-home pay:
Gross salary − other deductions
Proposed Changes vs Current Rules
There have been proposals to increase the threshold to KSh 30,000, but proposals do
not automatically become law. As of current KRA guidance, the effective PAYE
threshold remains tied to the KSh 24,000 first band and KSh 2,400 personal relief.
Frequently Asked Questions
Do I pay tax if I earn KSh 24,000 monthly?
Under the current PAYE structure, PAYE would generally be offset by personal relief.
Is KSh 24,000 completely tax-free income?
For PAYE purposes effectively yes, but other statutory deductions may still apply.
Can the threshold change in future?
Yes. Parliament can amend tax laws and tax bands.
Key Takeaway
A simple way to remember it:
First KSh 24,000 taxed at 10% → KSh 2,400 tax
Personal relief → KSh 2,400
Final PAYE → KSh 0
Your salary may still have other deductions, but for many employees the practical
PAYE tax-free threshold remains KSh 24,000 per month.
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