Allowances & Benefits Tax Checker Kenya

• Basic salary, wages, leave pay, sick pay, pay in lieu of leave

  Employment income.

  Full amount·ITA s.5(2)(a)·PAYE calculator

  Yes

• Overtime, bonus, commission, 13th cheque

  Taxed in the month paid.

  Full amount·ITA s.5(2)(a)·Bonus tax

  Yes

• House or rent allowance (cash)

  Cash allowance.

  Full amount·ITA s.5(2)(a)

  Yes

• Transport or commuter allowance (cash)

  Round-sum cash allowance.

  Full amount·ITA s.5(2)(a)

  Yes

• Airtime or phone allowance (cash)

  Cash allowance.

  Full amount·ITA s.5(2)(a)

  Yes

• Employer-provided phone line or mobile (bills paid by employer)

  Non-cash benefit at the prescribed rate, counted toward the KES 5,000 a month non-cash limit.

  30% of bills·ITA s.5(2)(b), s.5(5)(b); KRA prescribed rates

  Partially

• Hardship, entertainment, responsibility and acting allowances

  Cash allowance.

  Full amount·ITA s.5(2)(a)

  Yes

• Per diem or subsistence while away from the usual workplace on official duty

  The first KES 10,000 per day is treated as reimbursement. The excess is taxable unless receipted.

  10,000 a day·ITA s.5(2)(a)(iii) (Finance Act 2025)

  Partially

• Reimbursement of expenses spent wholly and exclusively for work (receipted)

  Excluded when the Commissioner is satisfied it is a reimbursement.

  Actual receipted cost·ITA s.5(2)(a)(ii)

  No

• Mileage or travelling allowance for official duty

  Excluded up to the AA of Kenya standard mileage rate. The excess is taxable.

  AA rate × official km·ITA s.5(2)(a)(iv)

  Partially

• Car provided by employer (private use available)

  Higher of 2% of cost a month and KRA's fixed rate by engine size. A hired car is valued at the hire cost.

  See car benefit calculator·ITA s.5(2B), (2C)·Car benefit

  Yes

• Housing provided by employer (quarters)

  15% of employment income compared with the rent or market rent, depending on who owns the house and who lives there.

  15% of income (10% for farm workers)·ITA s.5(2)(e), s.5(3)

  Yes

• Low-interest or interest-free staff loan

  The employer pays 30% fringe benefit tax on the interest difference at KRA's market rate.

  Market rate 8% (Jul–Sep 2026)·ITA s.12B, s.5(4)(e)·Staff loan benefit

  No for the employee. The employer pays FBT

• Meals in an employer or third-party canteen or cafeteria

  The first KES 60,000 a year is excluded and the excess is taxable. The canteen must be run by the employer or a registered taxpayer.

  60,000 a year (5,000 a month)·ITA s.5(4)(f) (TLAA 2024)

  Partially

• Meal or lunch allowance paid in cash, or meal vouchers usable anywhere

  Cash or cash equivalent.

  Full amount·ITA s.5(2)(a)

  Yes

• Medical services or medical insurance for a full-time employee and beneficiaries

  Excluded for the employee, spouse and up to 4 children aged 21 or under. A limit set by the Cabinet Secretary applies to non-full-time directors.

  No limit for full-time employees·ITA s.5(4)(b), (h)

  No

• Employer contribution to a registered pension or provident fund, or to NSSF

  Excluded. Taxable only for an employer not chargeable to tax paying an unregistered scheme, or paying above the s.22A limits.

  No limit for most employers·ITA s.5(4)(c)

  No

• School or education fees for the employee's children or relatives

  Excluded only if the employer did not claim the cost as a deduction in its own tax return.

  Full amount·ITA s.5(4)(d), s.16(2)(a)(iv)

  Yes, unless taxed on employer

• Life insurance premium paid by employer for the employee's benefit

  Taxable benefit, and the employee may claim 15% insurance relief. Not taxable if paid to a pension scheme or for group life cover that gives the employee no benefit.

  Full premium·ITA s.5(2)(f)

  Yes

• Club entrance and subscription fees

  Taxable where the employer claims a deduction.

  Full amount·ITA s.5(2)(fa)

  Yes

• Electricity supplied by employer (communal or generator)

  Prescribed value, counted toward the KES 5,000 a month non-cash limit.

  1,500 a month (farm workers 900)·ITA s.5(5)(b); KRA prescribed rates

  Partially

• Water supplied by employer (communal or borehole)

  Prescribed value, counted toward the KES 5,000 a month non-cash limit.

  500 a month (farm workers 200)·ITA s.5(5)(b); KRA prescribed rates

  Partially

• Furniture provided with housing

  1% of the employer's cost a month, or the hire cost if hired. Counted toward the non-cash limit.

  1% of cost a month·ITA s.5(5)(b); KRA prescribed rates

  Yes, if non-cash total reaches the limit

• Employee's own utility bills, rent or groceries paid directly by employer

  Private spending paid by the employer counts as pay.

  Full amount·ITA s.5(2)(a),(b); KRA Guide §5(iii)

  Yes

• Domestic worker, gardener, security guard or driver paid by employer

  Non-cash benefit at the higher of cost and market value.

  Cost to employer·ITA s.5(2)(b), s.5(5)

  Yes, if non-cash total reaches the limit

• Staff discounts, free goods or services, gifts in kind

  Higher of cost and market value. Taxable only once non-cash benefits reach the limit.

  5,000 a month (60,000 a year)·ITA s.5(2)(b), s.5(5)

  Yes, if non-cash total reaches the limit

• Cash gifts, such as holiday or wedding cash

  Cash pay.

  Full amount·ITA s.5(2)(a)

  Yes

• Passages and air tickets, including leave passages

  Excluded only for a non-citizen recruited outside Kenya who is here solely to work for the employer. Otherwise taxable.

  Full amount if taxable·ITA s.5(4)(a)

  Partially

• Gratuity paid into a registered pension scheme

  Excluded up to KES 360,000 per year of service (not for s.22A claimants).

  360,000 a year of service·ITA s.5(4)(g)

  Partially

• Contribution to a gratuity (contract of 3 years or more)

  Finance Act 2026: excluded if the contract runs 3 continuous years or more and the gratuity is no more than 31% of pay earned over the contract.

  31% of contract pay·ITA s.5(4)(ga) (Finance Act 2026)·Gratuity

  No, if within the cap

• Compensation for termination of employment

  Taxable, spread over the unexpired contract term or the following period.

  Full amount·ITA s.5(2)(c)·Final dues

  Yes

• Employee share options (ESOP)

  Market value at exercise minus the offer price, taxed when exercised.

  Gain at exercise·ITA s.5(5)(a), s.5(6)

  Yes

• Shares given instead of cash by an eligible start-up

  Taxed within 30 days of the earliest of 5 years, selling the shares, or leaving the company.

  Market value at that point·ITA s.5(7), (8)

  Deferred

• Tax paid by employer on the employee's behalf (net-of-tax pay)

  The tax borne is itself a taxable benefit, so pay is grossed up.

  Tax borne·KRA Guide §10; ITA s.5(2)(b)·Net to gross

  Yes

• Reimbursement to public officers under a written law

  Excluded from 27 July 2022.

  Full amount·ITA s.5(4)(fa)

  No

Work out the taxable amount

Per diem, non-cash benefits and canteen meals for one month. Cars, housing and staff loans have their own rules and don't count toward the KES 5,000 non-cash limit.