Tax Reliefs and Exemptions
Reduce your tax burden with available reliefs and exemptions in Kenya.
Personal Relief
Official Definition (KRA):
Personal relief is a standard deduction available to all resident individuals. It's designed to provide basic tax-free income for essential living expenses.
Current Rates (2024)
- Monthly: KES 2,880
- Annual: KES 34,560
In Simple Terms:
Every employee gets KES 2,880 per month automatically deducted from their taxable income. This means the first KES 2,880 of your monthly salary is tax-free.
Worked Example
If your monthly salary is KES 50,000:
Your PAYE will be calculated on KES 47,120, not KES 50,000.
Insurance Relief
Eligible Policies
- Life insurance premiums
- Health insurance premiums
- Education policy premiums
Relief Calculation:
15% of your insurance premiums, up to a maximum of KES 5,000 per month(KES 60,000 per year).
Worked Example:
If you pay KES 10,000 per month in insurance premiums:
You can claim KES 1,500 per month (KES 18,000 per year) as insurance relief.
Mortgage Interest Relief
Eligibility
Available to individuals who have taken a mortgage loan to purchase or construct a residential house.
Relief Amount:
Up to KES 25,000 per month (KES 300,000 per year) of mortgage interest paid.
Important Notes:
- Only interest is deductible, not principal repayments
- Property must be for residential use (not rental)
- You must provide a certificate from your lender
- Maximum relief is KES 25,000/month regardless of interest paid
Other Reliefs
Disability Relief
Available to individuals with disabilities registered with the National Council for Persons with Disabilities.
Amount: KES 150,000 per year
Owner-Occupier Interest Relief
For interest paid on loans used to purchase or improve your owner-occupied residence.
Amount: Up to KES 300,000 per year
Tax Exemptions
Common Exemptions
- • Income from retirement funds (up to certain limits)
- • Income from approved pension schemes
- • Certain government allowances
- • Income from tax-exempt bonds
- • Agricultural income (under certain conditions)
Important Reminders
- • Keep all receipts and certificates for relief claims
- • Reliefs are deducted before calculating tax
- • You must file your annual return to claim some reliefs
- • Consult a tax professional for complex situations