Are freelancers and online workers in Kenya required to pay tax? This 2025 guide explains your KRA tax obligations, how to register, and how to stay compliant.
💻 Who is a Freelancer in Kenya?
A freelancer is anyone offering services independently without formal employment. In Kenya, this includes:
- Writers, designers, and developers on platforms like Upwork & Fiverr
- Social media managers, content creators, and influencers
- Consultants and online coaches
- Virtual assistants and transcribers
- YouTubers, TikTokers, affiliate marketers
If you’re earning income from your skills, KRA considers you a taxpayer.
⚖️ Is Freelance Income Taxable in Kenya?
Yes. According to Kenyan tax law, any income earned locally or globally by a resident is taxable — unless specifically exempted.
Even if you work with foreign clients, as long as you live in Kenya, your freelance income is subject to Income Tax.
🧾 Which Taxes Apply to Freelancers?
| Tax Type | Applies When | Notes |
|---|---|---|
| Income Tax (Individual) | You earn over Ksh 24,000/month | Use the graduated PAYE bands |
| Turnover Tax (TOT) | You earn 1M–25M annually & not VAT-registered | 1% of gross income (no expenses deducted) |
| Presumptive Tax | County-based licensing (rare now) | Based on business license amount |
| Digital Service Tax | Applies to non-residents selling digital services in Kenya | Freelancers in Kenya are not charged DST |
🛠️ How to Stay Compliant as a Freelancer
✅ Step 1: Get a KRA PIN
Register via iTax
Choose “Individual” and select the relevant tax obligation: Income Tax Resident Individual
✅ Step 2: File Your Income Tax Return
You must file your return every year by June 30 (even if you made no income = nil return)
✅ Step 3: Declare Your Earnings
Option 1: File under normal Income Tax if your income is irregular or over Ksh 25M
Option 2: Register for Turnover Tax (TOT) if between Ksh 1M–25M
TOT is due monthly by the 20th of the following month
🔍 What If You Use PayPal, Wise, Mpesa or Crypto?
KRA has increasingly requested bank and Mpesa statements, and may track inflows from:
- PayPal to Equity withdrawals
- Wise/Payoneer transfers
- Mpesa business till earnings
- Localcrypto or Binance P2P deposits
🚨 Pro Tip: Keep records of your income and invoices.
❌ What Happens If You Don’t Pay?
- Penalties for late filing (Ksh 2,000+)
- Audits or compliance notices
- Difficulty getting a Tax Compliance Certificate (TCC)
- Risk of blacklisting for tenders or loans
💬 FAQs
Q: What if I didn’t earn anything this year?
You must still file a Nil Return before June 30.
Q: What if I’m still a student or just doing it part-time?
As long as you earn income, you are required to declare it. There’s no age limit for tax responsibility.
Q: Can I deduct expenses like internet, software, or equipment?
If using Income Tax (not TOT), yes — you can deduct business-related expenses.
📣 Call to Action
Freelancing is freedom — don’t let non-compliance block your growth.
💬 Need help registering for KRA or filing your freelance taxes? Reach out to Ushuru.com or subscribe for guides!