Which tax allowances

There is more information on the basic personal allowance, including an example, in our tax basics section. Blind person's allowance BPA reduces the amount of taxable income that you have to pay tax on. If you are eligible for BPA, you are entitled to it in addition to the personal allowance. There is more information on BPA including the eligibility criteria in the tax basics section.

The married couple's allowance MCA does not reduce the amount of taxable income on which you pay tax. It is used to calculate an amount to reduce your tax bill instead. You are only entitled to MCA if you are married or in a civil partnership and at least one of you was born before 6 April There is more information on MCA including examples in the pensioners section.

You can find information on the relief for maintenance payments in our tax basics section. We are often asked if married couples or civil partners can transfer their tax allowances to their spouse or partner if they do not use them. Some allowances are transferable, but others are not. You can only give up some of your personal allowance so that your spouse or civil partner may claim a tax reduction, if you meet certain conditions.

There is more information about the marriage allowance in the tax basics section. Be careful because although this allowance reduces the personal allowance of the donor spouse or civil partner, it acts to reduce the tax bill of the spouse or civil partner who receives it: it is not strictly an allowance in the hands of the person who receives it.

You can transfer the BPA to your spouse or civil partner, if your income is too low to make use of it. For more information on transferring BPA, visit the tax basics section. You can transfer the MCA to your spouse or civil partner, if your tax bill is too low to make use of it.

For more information on transferring MCA, visit the pensioners section. For information on how marriage separation affects your tax allowances, look at our tax basics section. Skip to main content. What tax allowances am I entitled to? Updated on 2 August Note carefully, though, that some allowances work differently. Am I eligible for tax allowances?

What is the personal allowance? Resident employees are taxed on worldwide earned income, in respect of any employment or services rendered in Kenya or outside Kenya. Residents are also taxed on any other income that has accrued in or is derived from Kenya. Non-resident employees are taxable only on their income earned from within Kenya or derived from Kenya. Effective 01 January , the tax rates applicable to taxable income are tabulated as follows:.

The Finance Act, removed the exemption on income from employment paid in the form of bonuses, overtime, and retirement benefits to employees whose taxable employment income before bonuses and overtime allowances does not exceed the lowest individual tax bands.

It is worth noting that the tax relief introduced by the government effective April for persons earning a gross monthly income of up to KES 24, per month currently the lowest tax band for individuals , as a means of cushioning the low income earners from the impact of the COVID crisis, continues to apply. Examples of such emoluments include leave pay, salary, wages, sick pay, payment in lieu of leave, fees, commissions, bonus gratuity, subsistence, travelling, entertainment or any other form of payment arising from employment or services rendered paid in form of cash.

Employees who do not know that such payments are taxable are often surprised to note that tax deductions have been made on their final pay. Cash benefits are subject to taxation as provided for in Section 3 2 a ii read together with section 5 2 a of the Income Tax, Cap Cash allowances made to employees may vary from one employer to another.

In most cases, terms of employment and company policy determine the allowances that an employee shall be entitled from those provided above among others. On the other hand, the said policy, in addition to cash allowances shall specify other non-cash benefits which could either be taxable or exempt.

There are other components of non-cash emoluments which an employer may extend to his employees which are taxable as part of employment income including provision of housing or motor vehicles. Tax reliefs. How much tax you pay. How to calculate your tax bill. All 11 articles in guide. Latest tax news. Autumn Budget what was in the small print? Autumn Budget dividend tax rises and capital gains deadline extended. Autumn Budget National Insurance rates and thresholds rise, while income tax is frozen.

Related guides in Income tax. In Tax. What is National Insurance? Find out everything you need to know about National Insurance and your National Insurance number. Use these 30 ways to pay less tax, including checking your tax code and making the most of tax credits and dozens of other ways to reduce your tax bill.