Tax system in Kenya
Kenya taxes residents on worldwide employment and business income through PAYE bands from 10% to 35%. A monthly relief of KES 2,400 softens every bill.
Payroll carries three extra levies: 1.5% affordable-housing from each side, 2.75% health insurance, and 6% pension to high ceilings. Companies pay 30% resident or 37.5% branches.
Gains pay a final 15%, dividends face 10% local or 15% outbound, estates face no duty since 1982, and VAT is 16%. Export zones offer decade-long holidays.
Tax rates at a glance
- Income tax
- 10% - 35%PAYE bands
- Wealth tax
- 0%
- Inheritance tax
- 0%
- Capital gains tax
- 15%
- Corporate tax
- 30%
- Dividend tax
- 10% / 15%
- VAT
- 16%
Who benefits most
These profiles tend to benefit most when the rules match their real residence, payroll and business setup.
EmployeesExpatsInvestorsFoundersCross-border groups
Watch out for
- Kenya is not low-tax for high salaries. The 35% top band plus housing, health and pension levies stacks steeply on top earners.
- Relief is KES 2,400 monthly, not more. Older guides quoting higher personal relief overstate take-home for everyone.
- Kenya sits on the FATF grey list. Banking diligence runs heavier even though tax law itself is unaffected.
- Zone incentives are real but fenced. Export and special-zone holidays need licences, thresholds and substance — not just registration.
Frequently asked questions
Is Kenya a high-tax country?
For top salaries, yes: 35% plus three payroll levies. But gains face a flat 15%, succession is duty-free, and zones offer long holidays.
Does Kenya have a wealth tax?
No. Kenya levies no net wealth tax, with property rates and gains tax doing the work instead.
Which taxes matter most in Kenya?
The main ones are PAYE with levies, 30% corporate tax, 15% final gains tax, 10% or 15% dividend withholding and 16% VAT.