How to File PAYE Returns on KRA iTax for Employers

Understanding PAYE Returns in Kenya

Pay As You Earn (PAYE) is a monthly tax obligation for all Kenyan employers with employees earning above the personal relief threshold of KSh 2,400. The Kenya Revenue Authority (KRA) requires employers to calculate, withhold, and remit PAYE tax monthly via the iTax portal at itax.kra.go.ke. Filing PAYE returns on time protects your business from penalties and ensures compliance with the Income Tax Act.

As of 2026, PAYE filings are mandatory digital submissions through iTax. The deadline is the 9th day of the month following the month in which tax was withheld—for example, January PAYE is due by 9 February. Missing this deadline triggers automatic penalties of 5% per month, capped at 50% of the tax due.

Step-by-Step PAYE Filing Process

1. Register on KRA iTax

First, ensure your business has a valid KRA PIN (Personal Identification Number). You'll need this to access iTax. If you don't have one, register at itax.kra.go.ke using your business details. Ensure you register under the correct employer category—sole proprietor, partnership, company, or institution.

2. Log In and Navigate to PAYE Section

Use your KRA PIN and password to log into iTax. Navigate to the PAYE Returns section under 'Returns and Tax Management'. You'll see a dashboard showing your tax periods and filing status.

3. Declare Employee Details

Input all employees' information: full names, ID numbers, gross salary, taxable income after pension contributions, and any other applicable deductions. iTax calculates tax automatically using KRA's standard tax bands and personal relief of KSh 2,400 per month. Accuracy here is critical—mismatches with employee P9A slips lead to audits.

4. Calculate and Verify Tax Amount

Review the system-generated PAYE amount. Cross-check against your payroll records. The total tax due appears clearly on the return form. If you've already made partial remittances via M-Pesa to KRA's paybill 572572, ensure the balance reconciles correctly.

5. Submit Return and Generate Deposit Slip

After verification, submit the return electronically. iTax generates a payment reference number. If tax remains outstanding, the system generates a deposit slip. Pay via M-Pesa (paybill 572572, account: your KRA PIN), bank transfer, or over-the-counter at KRA offices.

Common Filing Mistakes to Avoid

Many employers incorrectly calculate pension deductions—only employer and employee contributions to registered schemes reduce taxable income. Medical and life insurance do not. Also, don't file nil returns if you have employees; declare every individual and ensure employee tax compliance records align with submitted data.

If you're uncertain about calculations or employee classifications, consult PAYE experts on Kaziiko who understand current KRA regulations. Alternatively, find a verified Kenyan expert on Kaziiko to handle submissions monthly and avoid costly penalties.

Final Checklist

• File by the 9th of the following month
• Verify all employee names and ID numbers match payroll
• Ensure pension deductions are claimed correctly
• Remit payment promptly to avoid 5% monthly penalties
• Keep iTax submission receipts and bank payment confirmations for audit trails

Staying compliant with PAYE filing protects your business reputation and avoids the cash flow stress of penalties. Use iTax consistently, and your tax affairs remain in order with KRA.