As part of its ongoing effort to modernize tax administration and enhance service delivery, the Kenya Revenue Authority (KRA) has overhauled the process of filing Pay As You Earn (PAYE) tax returns.
Starting July 1, 2025, all employers must transition to a newly simplified system aimed at improving efficiency and minimizing filing errors.
Announced on June 23, 2025, this development affects employers in all sectors, including government institutions, private enterprises, and non-profit organizations.
KRA says the changes are the result of extensive consultations and feedback from taxpayers who sought a less cumbersome way to handle their monthly PAYE obligations.
The enhanced system is technologically advanced, integrating with key national platforms such as the Integrated Financial Management Information System (IFMIS), the Central Bank of Kenya (CBK), and Human Resource Information Systems through API connectivity. These integrations ensure smooth, real-time data processing and compliance.
A critical component of the reform is that it categorizes employees for more tailored tax return submissions. It also allows for automatic deductions of PAYE and other statutory payments, such as the Affordable Housing Levy and NITA contributions, directly from employer payroll systems.
To start the new process, employers must download a Simplified Excel Template available on the KRA website. This tool helps in accurately inputting payroll details by guiding users through pre-set formats and formulas. Sample CSV files are also provided to ease the transition for businesses using digital payroll systems.
The filing process follows three main steps: download and populate the template, validate the entries, and submit the returns via KRA’s iTax platform or through integrated API systems. Once the returns are submitted, employers are prompted to remit all due payments without needing separate procedures for each levy.
KRA is urging employers to familiarize themselves with the template and start using the new process before the July deadline to avoid last-minute confusion or compliance issues. Those needing help can reach out to the KRA support team through the provided phone numbers or the official email address.
This mandatory shift reflects KRA’s broader strategy of adopting data-driven solutions to improve tax compliance, reduce paperwork, and offer a better user experience for employers across Kenya.
