Navigating the waters of salary deductions can be a daunting task, especially with the excitement of a promotion. Ali Mohammed, recently elevated within the cargo business realm, finds himself pondering the intricacies of PAYE deductions. With a newfound monthly salary of Ksh65,000, Ali is keen to unravel the mysteries of his take-home pay and comprehend his financial landscape.
Examining Ksh65,000 Payslip
Here’s a breakdown of the potential components you might see on your payslip, based on your 65,000 KES salary:
| Description | Amount (KES) | Explanation |
|---|---|---|
| Basic Pay | 65,000.00 | This is your total salary before any deductions. |
| NSSF Contribution (National Social Security Fund) | -2,160.00 | This mandatory contribution goes towards your retirement benefits. |
| Taxable Pay | 62,840.00 | This is your basic pay minus NSSF, used to calculate income tax. |
| Income Tax | -13,635.36 | This is the estimated tax payable to KRA based on your taxable income. |
| Tax Reliefs | These deductions reduce your tax liability: | |
| – Insurance Relief (15% of NHIF) | +195.00 | Reduces tax by 15% of your monthly NHIF contribution. |
| – AHL Relief (15% of Housing Levy) | +146.25 | Reduces tax by 15% of your monthly Housing Levy contribution. |
| – Personal Relief | +2,400.00 | Basic tax-free amount provided by the government. |
| Total Tax Reliefs | +2,741.25 | Total tax reliefs deducted from your income tax. |
| PAYE (Tax Payable) | -10,894.11 | This is your income tax minus tax reliefs (the remaining tax to be paid). |
| Net Pay | 51,945.89 | This is your take-home pay after tax deductions (NSSF, PAYE). |
| NHIF Contribution (National Hospital Insurance Fund) | -1,300.00 | This mandatory contribution provides you with access to healthcare services. |
| Housing Levy (Affordable Housing Development Levy) | -975.00 | This mandatory contribution goes towards affordable housing initiatives. |
| Total Deductions | -15,229.11 | Sum of all deductions from your gross pay (NSSF, NHIF, PAYE, Housing Levy) |
| Net Pay | 49,670.89 | This is your final take-home pay after all deductions. |
Ali Mohammed’s journey through salary deductions highlights the importance of understanding PAYE and its impact on take-home pay. Armed with knowledge about his salary breakdown, Ali can navigate his financial landscape with confidence and clarity. As he embarks on this new chapter in his career, Ali’s comprehension of PAYE will serve as a valuable tool in shaping his financial future and ensuring financial stability.