What employers must do before Monday’s KRA PAYE deadline

The Kenya Revenue Authority (KRA) has issued a stern advisory to employers across the country, reminding them that the deadline for filing and remitting October Pay As You Earn (PAYE) returns is rapidly approaching.

With the clock ticking toward Monday, November 9, 2026, businesses are racing to file and remit their returns to avoid heavy financial sanctions and administrative headaches.

To streamline the process and minimize recurring errors, the tax authority issued a comprehensive nine-point checklist designed to guide human resources and finance departments through the intricacies of monthly payroll preparation.

The KRA's proactive advisory emphasizes that compliance goes far beyond simply transferring funds. Employers must execute a series of methodical verification steps before submitting their returns on the digital iTax platform.

Payroll data verification: Employers are directed to compile and audit their active payroll registers, ensuring that all permanent personnel, short-term contractors, and casual workers crossing the tax threshold are fully accounted for.

KRA PIN confirmation: A foundational requirement is checking that every employee's Personal Identification Number (PIN) is active and correctly integrated into the corporate records to prevent system rejections on iTax.

Review of taxable benefits: Companies must account for all non-cash benefits and perks such as employer-provided housing, company vehicles, regular bonuses, commissions, and specific allowances before running final tax computations.

Application of correct tax bands: Payroll managers must utilize current progressive tax brackets. For the 2026 fiscal cycle, monthly PAYE bands range from 10% to 35 %, with the initial Sh24,000 taxed at 10%, the next Sh8,333 at 25%, and income bracket tiers stretching up to the top marginal rate of 35 % for monthly earnings exceeding Sh800,000.

Relief deductions: Accountants must correctly factor in mandatory personal relief currently standing at Sh2,400 per month for resident employees alongside allowable insurance reliefs.

Cross-checking computations: A rigorous cross-examination of tax figures against raw payroll sheets is required to mitigate clerical errors that frequently trigger automated discrepancies and subsequent audits.

Portal submission and E-Slip generation: Once calculations are validated, employers must log onto the iTax portal, fill out their October PAYE returns, and generate the corresponding payment slips.

Independent remittance: Funds must be remitted promptly via approved channels, including authorized commercial banks or mobile money platforms.

Documentation and archiving: Finally, companies are instructed to download filing acknowledgement receipts and maintain meticulous digital or physical trails of payment proof for future audit defenses.

Under Section 37 of the Income Tax Act, employers act as agents of the state, bearing the legal duty to deduct the correct tax portions from employees' wages, salaries, and associated benefits before passing them on to the national revenue pool.

Failing to meet the November 9 deadline triggers immediate punitive measures. Under current statutory guidelines, late filers face a steep penalty equivalent to 25% of the total tax due or Sh10,000 whichever amount is higher.

Furthermore, delayed remittances attract an additional 5% penalty coupled with a 1 % monthly interest charge for every month or part thereof that the balance remains unpaid. Tax experts and business associations continue to advise firms to finalize submissions days in advance to bypass potential system congestion on the final day.