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How much is PAYE for Ksh. 110,000

Is your payslip a mystery? Many Kenyans receive payslips each month, but understanding them can be tricky. Unfamiliar words and abbreviations can make them seem like a code needing to be broken.

Let’s clear things up! We’ll take a step-by-step look at a sample payslip, using Dr. Edna Kanini, a Kenyan doctor, as our example. By following along with Dr. Kanini’s breakdown, we’ll break down each section of her payslip in a clear and easy-to-understand way. This will help you understand what each part of your own payslip means. Understanding your payslip is vital for effective financial planning. The table below summarizes the breakdown of Dr. Kanini’s payslip for easier reference.

Dr. Kanini’s Payslip Breakdown

ComponentAmount (Ksh)Description
Basic Pay110,000.00Gross Salary before Deductions
NSSF Contribution-2,160.00Deduction for National Social Security Fund
Taxable Pay107,840.00Basic Pay minus Non-Taxable Deduction
Income Tax-27,135.36Initial Tax Calculation on Taxable Pay
Insurance Relief+255.00Reduction in Taxable Income
AHL Relief+247.50Reduction in Taxable Income
Personal Relief+2,400.00Reduction in Taxable Income
PAYE (Pay As You Earn)-24,232.86Actual Income Tax Deducted
Pay After Tax83,607.14Salary after Income Tax Deduction
NHIF Contribution-1,700.00Deduction for National Hospital Insurance Fund
Housing Levy-1,650.00Deduction for Government Housing Scheme
Net Pay80,257.14Final Amount Received by Employee

Dr. Kanini’s Base Salary

  • Basic Pay: Ksh.110,000.00 – This represents Dr. Kanini’s total salary before any deductions are applied.

Understanding Taxable Income

  • NSSF: Ksh.2,160.00 – Next, we encounter the National Social Security Fund contribution. This mandatory deduction goes towards Dr. Kanini’s future pension, ensuring financial security after retirement.
  • Taxable Pay: Ksh.107,840.00 – Here, we subtract the non-taxable NSSF contribution from Dr. Kanini’s basic pay to arrive at her taxable income.

Income Tax and Reliefs

  • Income Tax: Ksh.27,135.36 – This is the initial income tax calculated based on Dr. Kanini’s taxable pay. However, there are ways to reduce this amount.

Tax Reliefs to the Rescue:

  • Insurance Relief: Ksh.255.00
  • AHL Relief: Ksh .247.50
  • Personal Relief: Ksh.2,400.00 – Fortunately, Dr. Kanini qualifies for various tax reliefs. These deductions, highlighted here, lower her taxable income, ultimately reducing her overall tax burden.
  • P.A.Y.E: Ksh 24,232.86 – Finally, we reach the PAYE amount. This is the actual income tax deducted from Dr. Kanini’s salary each month, taking into account the applied reliefs.

Net Pay After Income Tax

  • Pay After Tax: Ksh 83,607.14 – This amount reflects Dr. Kanini’s salary after deducting PAYE from her taxable income.

Additional Deductions and Final Net Pay

There are further mandatory deductions to consider:

  • NHIF: Ksh.1,700.00 – This contributes to the NHIF, providing Dr. Kanini with access to medical cover.
  • Housing Levy: Ksh.1,650.00 – This contributes towards a government housing scheme.
  • Net Pay: Ksh.80,257.14 – After all deductions are applied, Dr. Kanini receives this final net pay amount.