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Kenya Finance Bill 2024: Key changes affecting payroll

Kenya payroll

Running payroll in Kenya? The recently published Finance Bill 2024 proposes several changes affecting employee allowances, deductions, and tax benefits. These amendments will come into effect on July 1st, 2024.

Key Changes for Payroll:

  • Increased Allowance Exemptions: The exempt amount for travel, subsistence, and entertainment allowances increases from Ksh 2,000 per day to 5% of gross monthly earnings. Employers will need to establish a policy for these expenses.
  • Higher Miscellaneous Fringe Benefit Threshold: The threshold for miscellaneous fringe benefits to be taxable increases from Ksh 36,000 to Ksh 48,000 annually.
  • Increased Meal Benefit Exemption: The exempt value for employer-provided meals rises from Ksh 48,000 to Ksh 60,000 annually.
  • Tax Deductible Contributions: The Bill proposes allowing employee contributions to the Social Health Insurance Fund, Affordable Housing Levy, and post-retirement medical funds as tax deductions (with limitations for post-retirement medical funds).
  • Increased Tax Deductions: The tax deduction for mortgage interest and contributions to registered retirement funds (including NSSF) is set to increase from Ksh 300,000 to Ksh 360,000 annually.
  • Changes to Tax Reliefs: Insurance tax relief for health policies after January 1st, 2007, and contributions to the National Hospital Insurance Fund will no longer be offered.

Stay Compliant with PaySpace:

These changes can impact your payroll processes. PaySpace, a leading provider of statutory compliant payroll solutions in Kenya, can help you navigate these updates and ensure your payroll remains compliant.

Contact PaySpace today to learn more!