Kenya's Finance Bill 2025: Employers Must Apply Tax Reliefs to PAYE Deductions
The Kenyan government has introduced a significant change in the Finance Bill 2025, mandating all employers to apply applicable tax reliefs when calculating Pay As You Earn (PAYE) deductions for their employees. This move aims to reduce the tax burden on employees and increase their take-home pay. By applying tax reliefs, such as personal relief and insurance relief, employers can help minimize the amount of taxes deducted from their employees' salaries. This change is expected to have a positive impact on the overall tax compliance and employee satisfaction in Kenya. With the implementation of this new rule, employers must ensure they are up-to-date with the latest tax regulations and apply the necessary tax reliefs to avoid any penalties. The Finance Bill 2025 also highlights the importance of tax planning and management for businesses in Kenya, emphasizing the need for employers to stay informed about tax laws and regulations, including tax relief and payroll tax deductions.
