KRA restricts tax reliefs on staff lump-sum gratuity payouts

Clients seek services at KRA headquarters in Nairobi on February 23, 2024. 

Photo credit: File | Nation Media Group

Tax reliefs on employee lump-sum payouts will be limited to fresh payouts, while gratuity covering periods before July 1, 2025, will be subject to income tax irrespective of the effective date of payment, KRA has said.

This implies that employees qualifying for gratuity payments for periods served before July this year will be taxed even if their former employers are yet to make the payout.

PAYE Tax Calculator

Note: The results are not exact but very close to the actual.