Want a comprehensive iTax PAYE returns guide? Check out how to pay your employer or employee KRA PAYE per month. See how to PAYE online on iTax too.
You can now calculate and Pay your PAYE Kenya on iTax! iTax has become the Kenyan digital way of paying taxes online. Nowadays, you no longer have to queue all day to pay your tax. Instead, the iTax website is a one-stop tax shop. Normally, filing the iTax returns is done in June- at the end of the fiscal year. But KRA PAYE is a monthly exercise.
How to Pay PAYE for your Employees 2019: The Complete Kenyan Guide
While it seems a hectic exercise, this article seeks to simplify the calculation of PAYE. First, note that if you have trouble calculating or paying your PAYE on iTax- whether you’re an employer or employee- we’ll do it for you at an affordable fee! This post spells out how to pay the PAYE on iTax in Kenya. Be my guest, will you?!
What Is iTax PAYE?
iTax PAYE is a form of tax where you Pay As You Earn to KRA online. The Kenya Revenue Authority uses it as a way of taxing the earnings of employees. The PAYE is deducted from the salary of anyone who is employed. The PAYE also applies on wages, annual salaries, monetary gifts and all commission earned at workplaces. In short, all the money you make is predisposed to taxation.
So, if you are a boss somewhere, it is time you start deducting the KRA PAYE before it gets late. The law requires that all employees to deduct and pay PAYE to KRA. Also, you must do your Withholding Tax for any firm or person that offers consultant services to you. This helps you keep off penalties.
Thus, the information in this article is very relevant to everyone who owns a business or does accounting. Whether it is a small start-up business, micro-finance or SME, you need to oblige to the law. And, this is your perfect guide to updating your PAYE on iTax.
People Who Need To Calculate PAYE
- Company owners
- Accounting officers
- Business owners
- Human resource managers
- Companies/entrepreneurs who want to apply KRA Tax Compliance Certificate
- Employees (make sure your boss pays the tax on time)
If you’re planning to start a business, we have easy steps to register a company online in Kenya.
Why Kenyans Must Do PAYE on ITax
In Kenya, few understand why they should do their PAYE on iTax. But, as an aspiring entrepreneur, you need to know what the law has in store for defaulters. At least, you will understand why paying your tax early is necessary. Here are a few reasons to do PAYE on iTax.
- The commissioner penalizes any employer who does not deduct PAYE when paying their workers.
- Also, the commissioner imposes penalties to those who cannot account for the PAYE money. The employer must comply before 9th of every month. This regulation ensures that employees get their emoluments in time.
- If the PAYE tax is delayed past the date, it attracts a 20% penalty.
- The commission can penalize the employer at a whooping rate of 25%, or a total of Sh. 10000 in case of defaulting.
- Also, the commissioner may impose fines if an employee does not supply the Certificate stated in the PAYE Rules.
- Late or unpaid PAYE tax is slapped with a 2% per month compounded interest.
How to File PAYE Returns on ITax
The iTax PAYE procedure seems hard, but it is easy if you follow the instructions below. So, you only need a little patience. Here’s the summary:
- Download PAYE Sheet from the iTax website
- Fill in the Excel sheet and convert it into a Zip file
- Upload PAYE zip file to the iTax website
- Create a Pay slip for the KRA PAYE submission
- Finally, Pay at your company’s bank
1. Download Sheet from the iTax website
The PAYE sheet is a Microsoft Excel file located at the ‘Returns’ category on the iTax website. Downloading the sheet requires the same process as filing the annual returns. To navigate the PAYE sheet, use the path below.
How to download the iTax PAYE Returns Form
Returns>File Returns>Income tax>PAYE>Download File
- Do to the iTax website
- Choose File returns
- Click on income Tax
- Choose PAYE
- Download the PAYE file
Brace yourself if you have the Open Office program because the PAYE spreadsheet format is an Open Document. But, for a recommendation, have the Microsoft Excel and Windows OS in place… just in case!
2. Fill in the iTax PAYE Excel sheet from iTax and convert it into a Zip file
When filling the form, emphasize on the fields that are the most relevant to you. As you will see, the sheet contains numerous columns. So, be sure to go straight to what you need. Again, the sheet is programmed to detect any errors. Go through the document and make appropriate corrections before turning it into a ZIP file.
If your document is correct, you’ll generate the Zip file. Then, save it on your device.
3. Upload zip file to the iTax website
To upload the PAYE zip file, you must sign in to the system. Here, you need your company’s PIN and the password. Then, you will need to follow the navigation below.
How to Upload PAYE zip file on iTax
Follow this: Returns>File Return>e-Returns>Tax Obligation>Income Tax – PAYE
- Log in to iTax using your company/Business PIN
- Head to Returns menu
- Click on File Returns
- Choose e-Returns
- Tap on Tax Obligation
- Choose Income Tax- PAYE
- Upload the zip file
When you are logged in, your Taxpayer PIN will be already filled out by default. So, head to the Tax Obligation tab and choose the Income Tax PAYE. The website only requires the monthly returns- so, most of the details will have been filled out already.
Then, you will need to upload the zip file. Tap on the ‘Upload’ button and choose the Zip file you saved on your device. After uploading the PAYE zip file on iTax, check the Terms and Conditions slot. Then, hit ‘Submit’ and your PAYE sheet will be uploaded. You do not have to add files, unless you have a multiple of them under the same business.
In most cases, the system will give you a Returns Receipt after uploading the PAYE zip file. But, that will only work if your submission is successful. If it does not show the receipt, then you have done an error.
An error message means you need to check through your KRA PAYE Excel Sheet. See if there are errors that need fixing. After you solve the errors, repeat the same process by uploading the rectified zip file. In the process, ignore the ‘File Amended Return’ tab because you are yet to have a successful upload.
Then, a ‘Returns Receipt’ will appear if you are successful. Click on the link to download it- it is important for your business record. Remember, there is still a long way to go because all you have done is submit the PAYE file on iTax.
4. Create a Pay slip for the Submission
The KRA PAYE submission needs you to get a Payment Slip. The bank will need this is this slip. So, head to the Payment tab and tap it. The e-Payment Registration form will have most of your details in it because you are already known to the KRA system. But, you may need to fill in the gaps- though hardly any.
How to Submit Pay slip on iTax
- On your iTax business account, tap Liability Details
- Hit Add
- Choose the Mode of payment (Cheque, Cash or RGTS)
- If you decide its Cheque, choose the Receiving Bank
- Print your Payment Slip
So, confirm by hitting the Liability Details– this means you have to pay at the bank. Then, enter your liabilities and tap on the button named ‘Add’. Hitting the button means that you have added the Liability Details to your Payment Details. After performing the addition, the system will show you the total amount you should pay.
Thus, you will need to choose a method of paying the tax to KRA so that you can finish this. Under the ‘Mode of Payment’, you can choose the Cheque, Cash or RTGS. The ‘Receiving Bank’ is the financial institution that will let you pay out the tax. So, it needs to be where your company banks. Hit ‘Submit’ to send the details.
After you make the submission, you will get a Payment Slip in the form of a link. And, the link should let you download the file. Then, PRINT your Payment Slip.
5. Finally, Pay your KRA PAYE at your company’s bank
You need to take 2 copies of your Payment Slip to your bank. Take the two copies alongside with the money specified on the iTax payment slip. Then, the bank will take one payment slip and stamp the other for your files.
Your copy is important because it shows you comply with the law in compiling paying tax. If the bank or anyone else has issues with your PAYE tax payments, you can produce your copy as evidence. Also, you will receive an email from iTax as a confirmation that you are successful in paying the PAYE. It is a congratulations message. Congratulations for being a patriotic Kenyan and doing PAYE on iTax!
Answers to Your Questions on PAYE iTax Payment
My employer did not do the PAYE on time. Am I going to be penalized?
Answer: If your employee fails to pay your PAYE in time, you are likely to attract a penalty of sh. 10,000 or 5% of the tax. KRA chooses the deduction that is larger. So, they will result to 5% if it is more than sh. 10,000. KRA wants you to pay on time- thus; they will deduct a monthly-compounded interest of 2%. Please make sure to find out if the employer actually pays your monthly PAYE.
My submission was successful, but I have not paid at the bank yet.
Answer: It is no worry- you still have time to go to the bank as long as it is before 9th. Otherwise, KRA might penalize you with at least sh. 10,000 if they don’t get the money by that date.
How can I download NSSF or VAT?
Answer: You need to create an account on iTax. Then, you will be able to download all the files you need, including the iTax PAYE.
Am a sole proprietor for my business. How do I pay for my employee’s PAYE if I had ITMS?
Answer: If you have a PAYE account on ITMS, you should receive all the services on the iTax website. Also, you can update the information on ITMS before proceeding to iTax. Then, fill the PAYE Excel Sheet and follow the procedure above to submit it. If the problem persists, contact KRA for more details- they are located at your county’s Huduma Center. You can also let us assist you at an affordable price..
Do all my employees need iTax accounts? Or, how then do I fill out their data on the sheets?
Answer: Never mind about the iTax accounts because the KRA PINs do not expire. iTax Accounts are basically KRA PIN’s. So, when filling employee details, enter the old PINs. They should work.
My PAYE does not match with the Excel Sheet. What is wrong with my PAYE filing?
Answer: Well, the PAYE Excel Sheet is thoroughly scrutinized to remove any possible bugs. So, your calculations could be the problem. Thus, to remove the error, enter the correct details.
I have received an email from iTax implicating me as a defaulter. I remember filing all my returns the right way. After submitting an amended iTax sheet, they still hold that am a defaulter. What should I do?
Answer: If you are listed as a defaulter, it is bad news for your business. So, first go settle with the penalties. Then, go through the sheet again and correct the errors. After you have cleared, KRA will clear you. If the problem persists, go to the nearest KRA offices or contact us for premium assistance.
In the older method, I addressed the cheque to ‘Yourselves’. What should I do for the new iTax method?
Answer: If you need to pay your employee’s PAYE, address it to the bank you are paying the money to. Or, if you’re having any challenges filling the cheque, ask the teller and they will guide you through.
I am confused. I keep getting the message ‘The Type of Return does not match with the Type of Return in the form you are trying to upload.’ Time is going and I need urgent help.
Answer: There is no need to panic. The message appears to everyone who makes a mistake when entering details on the Excel spreadsheet. So, check the errors on your iTax PAYE spreadsheet. There are high chances that you have selected the wrong options.
The system has refused to take my KRA PIN. What is the possible reason for the rejection?
Answer: Is your KRA PIN valid? Check out on KRA PIN Checker on their website. If it is not, check the PIN again. But, if the problem persists, head to the nearest Huduma Center and explain your problem.
There is no PAYE or income tax on my account. How do I the feature active?
Answer: You need to go to your iTax account and update the details needed. So, check out for the registration or PIN details too. You should be able to add your taxation obligations.
I have been employed for the last ten years. We have been filing our returns manually. Who should register on the new KRA PAYE?
Answer: You should register on iTax ASAP alongside your employer. KRA demands that the company and its employees file their PAYE returns.
I have a multiple of jobs with different employers. So, how should I have my PAYE calculated? My employer says am confusing her.
Answer: If you have two or more jobs, inform each company involved so that they can file your PAYE in the correct way. Computing your second iTax PAYE takes effect from the last bracket where your first employer left. For instance, if you earn 50,000 from each employer, the first will calculate the lower tax brackets. That is, 15%, 20% or 25%. Then, the second employer will start computing at 30%. Also, NHIF and NSSF should be computed by the 1st boss.
What if I earned nothing this month, and the PAYE is 0?
I’m so sorry that you had such a bad month. If you earned nothing, let the total iTax PAYE be 0. Go through the process above and submit the returns as a null payment. Again, you still need to print a Payment Slip.
If you have issues computing your PAYE or filing your monthly or annual KRA PAYE, we will be glad to help you in the comment section below.