Do you earn online through platforms like Upwork, Fiverr, PayPal, or YouTube? Learn how online income is taxed in Kenya, how to stay compliant, and what KRA expects in 2025.
🌐 What Counts as Online Income in Kenya?
Online income refers to money earned through the internet — often from foreign clients or platforms. This includes:
- 🧑💻 Freelance work (Upwork, Fiverr, Toptal)
- 🎥 Content creation (YouTube, TikTok, Instagram)
- 📧 Digital marketing (affiliate links, dropshipping)
- 💼 Remote consulting or virtual assistance
- 💸 Payments received via PayPal, Payoneer, or Wise
✅ If you’re a Kenyan resident earning income online — it’s taxable.
⚖️ Does KRA Tax Online Work?
Yes. The Kenya Revenue Authority (KRA) treats online income the same as regular income. According to Kenyan tax law:
“A resident individual is taxed on their worldwide income.”
Even if your client is in the US, UK, India, or Canada — your income is taxable in Kenya as long as you’re based here.
💸 Which Taxes Apply to Online Workers?
| Tax Type | When It Applies | Rate |
|---|---|---|
| Income Tax | If you earn over Ksh 24,000/month | 10%–30% based on PAYE bands |
| Turnover Tax (TOT) | If gross income is between 1M–25M annually | 1% on gross income |
| Digital Service Tax (DST) | Applies to non-resident platforms only | Not applicable to individuals in Kenya |
🧾 How Does KRA Know About My Online Income?
KRA increasingly uses data matching from:
- Bank & Mpesa statement requests
- Foreign currency transactions flagged by banks
- PayPal to Equity/Absa/Co-op withdrawals
- Platforms like YouTube sending reports via Adsense
They may ask:
“Explain the source of these funds in your account.”
📌 Tip: Keep digital records (invoices, emails, contracts).
🛠️ How to File Tax for Online Income (Step-by-Step)
✅ Option 1: Income Tax (Recommended if > Ksh 1M/year)
- Log in to iTax
- Go to “Returns” → “File Return”
- Choose Income Tax – Resident Individual
- Fill out amounts earned and allowable expenses
- Submit before June 30
✅ Option 2: Turnover Tax (TOT) – for simpler filing
- Apply for TOT registration via iTax
- Declare total monthly earnings (no expenses deducted)
- Pay 1% of gross income by the 20th of each month
🧮 Example
Mary, a freelance virtual assistant, earns:
- $500/month from Upwork = ~Ksh 80,000
- $100/month affiliate commissions via PayPal
She must:
✅ File an Income Tax return
✅ Pay tax on the KES equivalent of total income
✅ Declare using iTax (either as TOT or Income Tax)
💬 FAQs
Q: I only receive small payments on PayPal — should I still file?
Yes. If your total annual income exceeds Ksh 288,000, you’re liable.
Q: Do I need to register a business for online work?
Not necessarily. You can file as an individual with a KRA PIN.
Q: Can I deduct expenses (WiFi, laptop, software)?
Only if you’re filing under Income Tax (not Turnover Tax).
Q: Will YouTube or Fiverr report me to KRA?
Not directly. But your local withdrawals (bank/Mpesa) may be reviewed.
📣 Call to Action
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