💡 Introduction
If you employ household staff in Kenya — a nanny, house manager, cook, gardener, caregiver, personal driver, or security guard — you may be legally required to deduct and remit PAYE (Pay As You Earn) every month.
Under the Income Tax Act (Cap. 470) and Tax Procedures Act (Cap. 469B), household employers have the same obligations as any other employer. And in 2025, KRA has intensified enforcement, especially after the rollout of eTIMS, real-time payroll validation, and iTax employer compliance checks.
This guide walks you through:
- When PAYE is required for domestic workers
- How to calculate PAYE correctly
- How to register as an employer on iTax
- Monthly PAYE filing steps
- Example salary computations
- Penalties for non-compliance
- Common mistakes and how to avoid them
Let’s break it down.
1. When Do You Need to Deduct PAYE for Household Staff?
You must deduct PAYE when your domestic worker earns a taxable salary above the PAYE threshold.
2025 PAYE Thresholds
Under the 2025 tax bands:
| Monthly Gross Pay | PAYE Requirement |
|---|---|
| KSh 0 – 24,000 | No PAYE |
| KSh 24,001+ | PAYE must be deducted monthly |
This includes:
- Base salary
- Cash allowances
- Benefits (e.g., housing, utilities, bonuses)
- Any non-cash benefits above the tax-free limit
If the worker specifically lives on the property, the housing benefit rules may apply.
2. Step 1 — Register as an Employer on iTax
Even private households must register.
How to register:
1️⃣ Log into iTax → Registration → Amend PIN.
2️⃣ Under “Basic Information”, select:
- Source of Income: Employment
- Add Employer Obligation: PAYE (Employer)
3️⃣ Submit → PIN is updated instantly.
4️⃣ You can now generate P9 forms, file returns, and remit PAYE.
3. Step 2 — Calculate PAYE for Your Househelp
To calculate PAYE, you must consider:
a) Gross Monthly Salary
Salary before any deductions.
b) Allowances (if any)
- Transport
- Food
- Overtime
- Bonuses
c) NHIF and NSSF Deductions
These are statutory.
d) Apply PAYE Tax Bands
2025 PAYE Rates
| Band | Monthly Taxable Income | Rate |
|---|---|---|
| 1 | 0 – 24,000 | 0% |
| 2 | 24,001 – 32,333 | 15% |
| 3 | 32,334 – 500,000 | 20% |
| 4 | 500,001 – 800,000 | 25% |
| 5 | Above 800,000 | 30% |
🌟 Example Calculation
House manager salary: KSh 30,000/month
- First 24,000 → 0%
- Next 6,000 → 15% = 900
PAYE = KSh 900
After that, apply:
- NSSF (Tier I & II based on 2024/2025 enhanced rates)
- NHIF (replaced by SHIF — still include contribution until full SHIF implementation details are finalized)
4. Step 3 — Deduct and Remit PAYE Monthly
📌 Deadline
PAYE must be filed and paid by the 9th of every month, for the previous month.
How to file on iTax
1️⃣ Log into iTax
2️⃣ Go to Returns → File PAYE Return
3️⃣ Select Month
4️⃣ Enter:
- Employee’s name
- Employee’s PIN (optional if they don’t have one)
- Gross pay
- NSSF
- NHIF/SHIF
- PAYE amount
5️⃣ Validate the form → Upload
6️⃣ Generate Payment Slip (PRN)
7️⃣ Pay via M-PESA, bank, or online banking
5. Are You Required to Give Your Househelp a Payslip?
YES.
Kenya’s Employment Act requires all employers to give written payslips, even for domestic workers.
Payslip must include:
- Gross salary
- Deductions (PAYE, NHIF, NSSF)
- Net pay
- Employer name
This protects both the employer and employee.
6. Penalties for Not Filing PAYE (2025 Rates)
Late filing penalty
- KSh 10,000 or
- 25% of PAYE due, whichever is higher.
Late payment penalty
- 5% of unpaid tax
Interest
- 1% per month until settlement.
Example:
If PAYE due = KSh 900 and you fail to file:
- Penalty = KSh 10,000 (minimum)
- Interest applies if unpaid
So yes — hiring a househelp without compliance can become expensive fast.
7. Common Mistakes to Avoid
| Mistake | Problem | Solution |
|---|---|---|
| Paying cash but not accounting | Illegal & risky | Keep records |
| Not registering for PAYE | Penalties accumulate | Update PIN on iTax |
| Forgetting filing dates | Automatic charges | Set calendar reminders |
| Using wrong tax calculations | Underpayment penalties | Use PAYE calculator |
| Not issuing payslips | Violates Employment Act | Use template payslips |
8. Frequently Asked Questions (FAQs)
Q1: My househelp earns KSh 18,000. Should I file PAYE?
No PAYE — but you still need to deduct NSSF and NHIF/SHIF.
Q2: What if my domestic worker doesn’t have a KRA PIN?
You can still file PAYE under “PIN Not Provided”, but encourage them to register.
Q3: What if I have two househelps?
Each must be listed separately on your PAYE return.
Q4: What if my househelp lives with me?
Housing benefit rules may apply for high salaries, but typically don’t affect low-income earners.
Q5: Does PAYE filing help with my TCC?
YES — KRA checks employer compliance before issuing a Tax Compliance Certificate.
9. Conclusion
Hiring household staff comes with responsibilities — and KRA treats domestic employers the same as corporate employers.
But with the right knowledge and the simple steps in this guide, PAYE compliance is easy, affordable, and fully manageable.