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How much is PAYE deduction for Ksh.90,000

What is PAYE?

Ever scrutinize your payslip wondering where a chunk of your salary goes? In Kenya, Pay As You Earn (PAYE) plays a key role, collecting income tax throughout the year. Let’s use Tabitha Wambui, a head chef at a prestigious Kenyan restaurant, as an example to understand PAYE’s impact on your take-home pay.

PAYE is a system where the Kenyan Revenue Authority collects income tax through monthly deductions from your salary. This ensures a steady flow of tax revenue for the government.

Understanding Tabitha’s Payslip Breakdown:

The table below summarizes the key components of Tabitha’s payslip:

DescriptionAmount (Ksh)
Basic Pay90,000.00
NSSF2,160.00
Taxable Pay (Basic Pay – NSSF)87,840.00
Income Tax21,135.36
Reliefs and Allowances
– Insurance Relief240.00
– A.H.L Relief (Housing Levy Relief)202.50*
– Personal Relief2,400.00
Total Reliefs and Allowances2,842.50
PAYE (Income Tax – Reliefs & Allowances)18,292.86
Other Deductions
– NHIF (National Hospital Insurance Fund)1,600.00
– Housing Levy1,350.00
Net Pay (Basic Pay – Total Deductions)66,597.14

Calculating PAYE:

Tabitha’s PAYE is calculated by subtracting the total reliefs and exemptions from her initial income tax amount. These reliefs help reduce her taxable income, ultimately lowering her tax burden.

Additional Deductions:

NHIF and Housing Levy are mandatory deductions on top of PAYE. NHIF provides health insurance, while the Housing Levy supports affordable housing initiatives.pen_spark

Net Pay:

This is the amount Tabitha receives after all deductions, including PAYE, NHIF and Housing Levy.

Net Pay = Ksh 66,597.14

Empowering Yourself:

Analyzing your payslip like this empowers you to understand your tax contributions and how various deductions affect your net income.

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