PAYE Return Form (Kenya)
PAYE RETURN FORM
Income Tax Act Cap. 470, Section 37 | Tax Procedures Act No. 29 of 2015 | Income Tax (Pay As You Earn) Rules (Legal Notice No. 39 of 2010)
Employer: [Employer Name]
KRA PIN: [Employer KRA PIN]
Address: [Employer Address]
Return Period: [Return Month] [Return Year]
Return Type: [Return Type]
PART A — EMPLOYEE PAYROLL SUMMARY
Total Employees on Payroll: [Total Employees]
New Employees Joined This Month: [New Employees]
Employees Who Left Employment This Month: [Exiting Employees]
Total Gross Emoluments Paid: [Total Gross Emoluments]
Total Chargeable Income (after allowable deductions): [Total Chargeable Income]
Note: Full employee-level payroll data is recorded in the PAYE Deductions Schedule (separate document) maintained under Section 23 of the Tax Procedures Act No. 29 of 2015.
PART B — PAYE AND AFFORDABLE HOUSING LEVY TOTALS
Total Gross PAYE Computed (before reliefs): [Total Gross PAYE]
Less: Total Personal Relief (s.30 ITA Cap. 470 — KES 2,400/employee/month): [Total Personal Relief]
Less: Total Insurance Relief (s.31 ITA Cap. 470 — 15% of premiums, max KES 5,000/employee/month): [Total Insurance Relief]
Total Net PAYE to Remit to KRA: [Total Net PAYE]
Affordable Housing Levy — Employee Deductions (1.5% of gross salary, Affordable Housing Act 2024): [Total Employee AHL]
Affordable Housing Levy — Employer Contribution (1.5% of gross salary): [Total Employer AHL]
Total Amount to Remit to KRA (PAYE + AHL): [Total Remittance]
KRA PAYE Tax Bands (Finance Act 2023): 10% on first KES 24,000/month; 25% on KES 24,001–32,333; 30% on KES 32,334–500,000; 32.5% on KES 500,001–800,000; 35% above KES 800,000 per month.
PART C — PAYMENT DETAILS
Payment Method: [Payment Method]
KRA Payment Reference Number: [Payment Reference Number]
Date of Payment: [Payment Date]
KRA iTax Acknowledgment / Filing Reference Number: [iTax Acknowledgment Number]
Filing Deadline: PAYE must be filed and remitted to the KRA on or before the 9th of the month following the payroll month under Section 37(3) of the Income Tax Act Cap. 470 and Regulation 7 of the Income Tax (Pay As You Earn) Rules (Legal Notice No. 39 of 2010). Late filing: 5% penalty under Section 84, Tax Procedures Act No. 29 of 2015. Late payment: 20% penalty plus 1% per month interest under Section 87, Tax Procedures Act No. 29 of 2015.
PART D — COMPLIANCE NOTES
Nil Returns: A nil PAYE return must be filed for any month in which no PAYE is deducted, under Section 26 of the Tax Procedures Act No. 29 of 2015. Failure to file a nil return attracts a minimum penalty of KES 20,000 under Section 84 of the Tax Procedures Act No. 29 of 2015.
Employee KRA PINs: Every employee included on the PAYE return must have a valid KRA PIN under Section 12 of the Tax Procedures Act No. 29 of 2015. New employees must register for a KRA PIN at itax.kra.go.ke before their first payroll inclusion.
Tax Compliance Certificate (TCC): An up-to-date PAYE filing record is required for the issuance of a Tax Compliance Certificate under Section 13 of the Tax Procedures Act No. 29 of 2015, which is mandatory for government tenders under the Public Procurement and Asset Disposal Act No. 33 of 2015.
Records Retention: All PAYE returns and supporting payroll records must be retained for a minimum of five years from the end of the year of income under Section 23 of the Tax Procedures Act No. 29 of 2015.
Amended Returns: An amended return may be filed within three years of the original due date under Section 31 of the Tax Procedures Act No. 29 of 2015. Additional PAYE due on amendment attracts interest under Section 87.
PART E — EMPLOYER DECLARATION
I, [Authorised Signatory Name], authorised signatory for [Employer Name] (KRA PIN: [Employer KRA PIN]), declare that this PAYE Return for [Return Month] [Return Year] is true, complete, and accurate, and that the total PAYE and Affordable Housing Levy stated above have been or will be remitted to the Kenya Revenue Authority via the KRA iTax portal on or before the statutory deadline.
Date: [Return Date]
Authorised Signatory (Finance Director / Chief Finance Officer)
________________
Signature
What Is a PAYE Return Form (Kenya)?
A PAYE Return Form in Kenya records the income, deductions and tax due for the period it covers.
The legal basis for PAYE in Kenya is Section 37 of the Income Tax Act Cap. 470, which imposes a duty on every employer who pays emoluments to an employee to deduct from those emoluments the amount of tax chargeable on the employee for the year of income. The Income Tax (Pay As You Earn) Rules (Legal Notice No. 39 of 2010), made under Section 130 of the Income Tax Act Cap. 470, set out the detailed mechanics of the PAYE system, including the obligation to file monthly returns, the format of the return, and the penalties for non-compliance.
The Tax Procedures Act No. 29 of 2015, which consolidated and reformed Kenya's tax procedures, provides the overarching framework for all tax filings in Kenya, including PAYE returns. Section 26 of the Tax Procedures Act No. 29 of 2015 requires every employer registered for PAYE to file a return for each month in which emoluments were paid, even if no tax was deducted (a nil return). Section 83 of the Tax Procedures Act No. 29 of 2015 makes it an offence to fail to file a required tax return.
In practice, the PAYE Return in Kenya is filed electronically on the KRA iTax portal (itax.kra.go.ke). The employer logs into the iTax portal using their KRA PIN and password, follows to the Returns menu, selects PAYE, and uploads a CSV file containing the employee payroll data or enters the data directly into the iTax form. The return captures aggregate PAYE for all employees and, from 2023, also includes the Affordable Housing Levy (AHL) under the Affordable Housing Act 2024.
The KRA iTax system was introduced in 2013 as part of the KRA's modernisation programme and replaced the manual PAYE return process. The iTax platform is integrated with the National Registration Bureau (NRB) for NIC verification, the Business Registration Service (BRS) for company data verification, and the NSSF electronic contribution system, allowing cross-referencing of payroll data across government systems.
The PAYE Return Form template provided by forms-legal.com is designed for employers who wish to maintain a paper or spreadsheet record of the monthly return data before uploading to iTax, or for employers in areas of limited internet connectivity who need to compile data offline before going online to file.
The legal framework governing the PAYE Return Form (Kenya) in Kenya draws on several key statutes and regulatory bodies. Under Kenyan law, the Constitution of Kenya 2010 is the supreme law. The Law of Contract Act (Cap. 23) governs contractual obligations. The Kenya Revenue Authority (KRA) administers tax under the Income Tax Act (Cap. 470). The High Court of Kenya, established under Article 165 of the Constitution, has unlimited original jurisdiction. The Data Protection Act No. 24 of 2019 and the Office of the Data Protection Commissioner (ODPC) govern personal data. Parties executing a PAYE Return Form (Kenya) in Kenya should confirm the document reflects current law, including any amendments enacted since the original drafting date. The Income Tax Act Cap. 470 sets the foundational requirements.
When Do You Need a PAYE Return Form (Kenya)?
A PAYE Return Form is required in Kenya every month in which an employer pays emoluments to employees, regardless of the amount of tax deducted.
The PAYE Return must be filed on or before the 9th day of the month following the month of payment under Section 37(3) of the Income Tax Act Cap. 470 and Regulation 7 of the Income Tax (Pay As You Earn) Rules (Legal Notice No. 39 of 2010). An employer who pays January salaries on 30 January must file the PAYE Return and remit the PAYE by 9 February.
A nil PAYE return is required even in months where no PAYE is deducted — for example, where all employees earn below the PAYE threshold after personal relief. Section 26 of the Tax Procedures Act No. 29 of 2015 requires the return to be filed even if the tax due is zero. Failure to file a nil return is treated as a failure to file under Section 83 of the Tax Procedures Act No. 29 of 2015.
The PAYE Return is required when an employer has made mid-month salary adjustments, back-pay awards, or lump-sum bonus payments that affect the PAYE liability for the month. The return must capture the actual PAYE deducted, including any amounts relating to adjustments.
A PAYE Return is required when the employer is applying for a Tax Compliance Certificate (TCC) from the KRA. Section 13 of the Tax Procedures Act No. 29 of 2015 provides that a TCC will only be issued to a taxpayer who is fully compliant with all tax filing and payment obligations, including PAYE returns. TCCs are required for government tenders under the Public Procurement and Asset Disposal Act No. 33 of 2015.
The return is also required when an employer is winding down operations and processing final payroll — the final PAYE return must be filed with a note that it is the employer's final return, and the employer must deregister from PAYE on the iTax portal under Section 17 of the Tax Procedures Act No. 29 of 2015.
Parties in Kenya should prepare a PAYE Return Form (Kenya) proactively rather than waiting for a dispute to arise. Courts interpret agreements based on the written terms rather than oral representations. Under Kenyan law, the Constitution of Kenya 2010 is the supreme law. The Law of Contract Act (Cap. 23) governs contractual obligations. The Kenya Revenue Authority (KRA) administers tax under the Income Tax Act (Cap. 470). The High Court of Kenya, established under Article 165 of the Constitution, has unlimited original jurisdiction. The Data Protection Act No. 24 of 2019 and the Office of the Data Protection Commissioner (ODPC) govern personal data. Where the transaction involves regulated activities, prior approval from the relevant authority may be required before execution.
What to Include in Your PAYE Return Form (Kenya)
A complete PAYE Return Form in Kenya under the Income Tax Act Cap. 470 and the Tax Procedures Act No. 29 of 2015 must include the following key elements.
Employer Identification: The employer's full legal name and KRA PIN, which is the mandatory identifier on all KRA iTax filings. The KRA PIN is issued by the Kenya Revenue Authority under Section 12 of the Tax Procedures Act No. 29 of 2015 and is unique to each registered taxpayer.
Return Period: The specific month and year of income to which the return relates. The return period must be stated clearly to allow the KRA to match the filing to the correct assessment period.
Employee Payroll Summary: For each employee, the return must capture: full legal name; KRA PIN; gross emoluments for the month; chargeable income after allowable deductions; PAYE computed at the graduated rates under the Finance Act; personal relief deducted; insurance relief under Section 31 of the Income Tax Act Cap. 470; net PAYE deducted; and Affordable Housing Levy (AHL) deducted at 1.5% of gross salary.
Aggregate PAYE Summary: Total gross emoluments for all employees; total chargeable income; total PAYE deducted; total personal reliefs; total insurance reliefs; net PAYE to be remitted; and total AHL to be remitted. The aggregate figures on the return must match the totals on the PAYE Deductions Schedule prepared for the month.
New Employees: Details of any employees who joined the payroll during the return month, including their employment commencement date and KRA PIN. Employees who do not yet have a KRA PIN must apply on the KRA iTax portal before they can be included on the PAYE return.
Exiting Employees: Details of employees who left employment during the return month, with their exit date and final PAYE deducted. The employer must issue a certificate of tax deduction (P45 equivalent) to departing employees under the Income Tax (Pay As You Earn) Rules.
Payment Details: The payment reference number generated by the KRA iTax system upon submission of the return, confirming that the PAYE and AHL amounts have been received by the KRA. Payment is made via the KRA payment gateway, linked to MPESA, bank transfers, or direct debit mandates approved by the KRA.
Employer Declaration: Confirmation by the employer's authorised signatory that the return is complete and accurate, with name, title, signature, and date.
Forms-legal.com provides this Kenya PAYE Return Form template as a preparation and record-keeping tool for employers before and after filing on the KRA iTax portal. The iTax portal generates an official acknowledgment receipt upon successful filing, which is the definitive proof of compliance with Section 37 of the Income Tax Act Cap. 470.
Additional compliance elements for a PAYE Return Form (Kenya) used in Kenya include: Under Kenyan law, the Constitution of Kenya 2010 is the supreme law. The Law of Contract Act (Cap. 23) governs contractual obligations. The Kenya Revenue Authority (KRA) administers tax under the Income Tax Act (Cap. 470). The High Court of Kenya, established under Article 165 of the Constitution, has unlimited original jurisdiction. The Data Protection Act No. 24 of 2019 and the Office of the Data Protection Commissioner (ODPC) govern personal data. Forms-legal.com provides this template as a starting point for Kenya-compliant documentation.
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Forms Legal. (2026). PAYE Return Form (Kenya) (Kenya) [Legal document template]. Forms Legal. https://forms-legal.com/kenya/government/tax-forms/paye-return-form-kenya
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note = {Free legal document template}
}Frequently Asked Questions
To file a PAYE return on the KRA iTax portal (itax.kra.go.ke) in Kenya: (1) Log in using your employer KRA PIN and iTax password; (2) Navigate to Returns > File Returns > PAYE; (3) Select the relevant return period (month and year); (4) Download the Excel PAYE return template from iTax, populate it with each employee's payroll data (KRA PIN, gross pay, PAYE, AHL, reliefs), and upload the completed file; alternatively, enter employee data directly in the iTax online form; (5) Validate the return data — iTax will flag errors such as invalid KRA PINs or missing fields; (6) Submit the return and note the submission acknowledgment number; (7) Proceed to payment by generating a payment slip on iTax and paying via MPESA (Paybill 572572), bank transfer, or other KRA-approved payment method; and (8) Retain the iTax filing acknowledgment and payment receipt as proof of compliance. The entire process must be completed by the 9th of the month following the payroll month under Section 37(3) of the Income Tax Act Cap. 470.
Under the Tax Procedures Act No. 29 of 2015, late PAYE filing and payment in Kenya attract significant penalties. For late filing: Section 84 imposes a penalty of 5% of the tax due (subject to a minimum of KES 20,000) for each month or part of a month during which the return remains unfiled, capped at 25% of the tax due. For late payment: Section 87 imposes a penalty of 20% of the unpaid tax, plus interest at 1% per month from the due date until the date of payment. For failure to deduct PAYE from employees: Section 37(5) of the Income Tax Act Cap. 470 makes the employer personally liable for PAYE that should have been deducted but was not. On conviction for wilful evasion: Section 96 of the Tax Procedures Act No. 29 of 2015 provides for a fine of up to KES 1,000,000 and/or imprisonment of up to 3 years. The KRA may also issue a Distress Notice under Section 41 of the Tax Procedures Act No. 29 of 2015 to seize and sell employer assets in satisfaction of unpaid PAYE debts.
Yes, an employer can amend a PAYE return already filed on the KRA iTax portal in Kenya. Under Section 31 of the Tax Procedures Act No. 29 of 2015, a taxpayer may file an amended return within three years of the original due date of the return. To amend a PAYE return on iTax: (1) Log into iTax and navigate to Returns > Amended Returns > PAYE; (2) Select the return period to amend; (3) Download the previously filed return data, make the necessary corrections, and re-upload the amended file; and (4) Submit the amended return. If the amendment results in additional PAYE payable, the employer must remit the additional amount plus applicable interest under Section 87 of the Tax Procedures Act No. 29 of 2015. If the amendment results in an overpayment, the employer may apply for a refund or credit note on iTax. The KRA Commissioner General may also amend an assessment within five years of the end of the year of income under Section 31(2) of the Tax Procedures Act No. 29 of 2015, if satisfied that the original return was incorrect.
Under the Tax Procedures Act No. 29 of 2015, every taxpayer in Kenya — including every employee subject to PAYE — must have a KRA Personal Identification Number (PIN). Section 12 of the Tax Procedures Act No. 29 of 2015 requires every person required to pay tax to register for a PIN. The KRA iTax portal will reject a PAYE return that includes an employee record without a valid KRA PIN. Employers must therefore ensure that all employees obtain a KRA PIN before or immediately upon commencement of employment. The KRA PIN can be obtained online at itax.kra.go.ke within minutes using the employee's National Identity Card number and mobile phone number for OTP verification. Employers can assist new employees to register for a KRA PIN as part of the onboarding process. An employer who includes an employee on the payroll without a KRA PIN may also be in breach of Section 37(4) of the Income Tax Act Cap. 470, which requires the employer to maintain accurate employee tax records.
A nil PAYE return in Kenya is a monthly PAYE return filed by an employer to report that no PAYE was deducted for the relevant month — either because no emoluments were paid, all employees earned below the taxable threshold after personal relief, or the employer had no employees on the payroll during the month. Under Section 26 of the Tax Procedures Act No. 29 of 2015, every employer registered for PAYE must file a return for every return period, regardless of whether any tax is due. Failure to file a nil return is treated as a failure to file under Section 83 of the Tax Procedures Act No. 29 of 2015 and attracts the same penalty of KES 20,000 (minimum) under Section 84. To file a nil PAYE return on the KRA iTax portal: navigate to Returns > File Returns > PAYE, select the return period, choose the nil return option, and submit. No payment is required for a nil return. Employers who consistently file nil returns but whose bank records show salary payments may be flagged for audit by the KRA under the risk-based audit selection criteria used by the KRA Domestic Taxes Department.
The Social Health Insurance Fund (SHIF) is a mandatory health insurance levy introduced by the Social Health Insurance Act No. 16 of 2024, replacing the National Hospital Insurance Fund (NHIF) deductions. SHIF contributions are deducted by the employer from each employee's gross salary at a rate of 2.75% of gross salary (with no upper cap) and remitted to the Social Health Authority (SHA) by the 9th of the following month. Unlike PAYE, SHIF contributions are not administered through the KRA iTax portal — they are filed separately on the SHA portal. However, SHIF deductions are relevant to the PAYE Deductions Schedule because: (1) Employee SHIF contributions are deductible for income tax purposes under Section 15 of the Income Tax Act Cap. 470, reducing the employee's chargeable income before PAYE is computed; and (2) Employer SHIF contributions are a deductible business expense for corporation tax under Section 15 of the Income Tax Act Cap. 470. Employers must therefore coordinate their PAYE return filings with their SHIF contribution schedules to ensure consistency in payroll records.
This template is provided for informational purposes only and does not constitute legal advice. Laws vary by jurisdiction and change over time. Consult a qualified attorney for advice specific to your situation.Full disclaimer
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