Congratulations to Agnes Mwaniki! Landing a bank teller job at a Tier 1 bank is a fantastic achievement. Now, as Agnes starts her new role, a question might pop into her head: how much will be deducted from her salary? Specifically, how much is PAYE (Pay As You Earn) for a Ksh 80,000 salary in Kenya?
This article will break down Agnes’ salary deductions, using his Ksh 80,000 salary as an example. It’s important to remember that this is an example, and actual deductions may vary slightly depending on individual circumstances.
Understanding the Breakdown:
The table below summarizes the breakdown of Agnes’ salary deductions:
| Description | Amount (Ksh) |
|---|---|
| Basic Pay | 80,000.00 |
| Deductions | |
| NSSF Contribution (6%) | 2,160.00 |
| Taxable Pay | 77,840.00 |
| Income Tax Reliefs: | |
| – Insurance Relief | -225.00 |
| – AHL Relief | -180.00 |
| – Personal Relief | -2,400.00 |
| Total Reliefs | -2,805.00 |
| Taxable Income | 75,035.00 |
| PAYE (Estimated) | 15,330.36 |
| Other Deductions | |
| NHIF Contribution (4%)** | 1,500.00 |
| Housing Levy (1.5%) | 1,200.00 |
| Net Pay | 59,809.64 |
Explanation of Deductions:
- NSSF Contribution (National Social Security Fund): This is a mandatory contribution that goes towards Agnes’ retirement savings. The current contribution rate for employees is 6%.
- Income Tax: This is the tax payable on Agnes’ income. However, before calculating the final tax amount, we consider reliefs:
- Insurance Relief: A small deduction for private medical insurance.
- AHL Relief: Relief for any contributions made towards an Approved Housing Scheme.
- Personal Relief: A tax-free amount granted to all taxpayers (This amount may vary depending on marital status and dependents).
- PAYE (Pay As You Earn): This is the final income tax amount Agnes will have deducted from his salary each month. The estimated amount is calculated based on his taxable income after reliefs.
- Other Deductions:
- NHIF (National Hospital Insurance Fund): This is a mandatory contribution towards healthcare.
- Housing Levy: This is a 1.5% contribution towards a government housing initiative.
- Net Pay: This is the amount Agnes will receive after all deductions.