What Happens to Your PAYE When You Change Jobs in Kenya

Switching jobs in Kenya? Your PAYE doesn't reset—miss the handoff, and you could overpay taxes big time. Mastering this keeps your wallet happy amid rising costs. We'll break down PAYE basics, Form P9A transfers, cumulative calculations, tax band carryovers, and fixes for common pitfalls. Ready to dodge surprises? Let's dive in!

Understanding PAYE in Kenya

PAYE (Pay As You Earn) is Kenya's mandatory payroll tax system where employers withhold income tax from salaries monthly and remit to KRA by the 9th of the following month under Income Tax Act Cap 470.

The system uses progressive tax bands from the Finance Act 2024, ranging from 10% to 37.5%. Employers act as withholding agents, calculating and deducting tax on employment income like salaries, bonuses, and allowances.

KRA collected KSh 1.2 trillion in PAYE from 2.8 million employees in 2024. The tax year runs from January to December, with monthly remittances via the iTax portal.

Employees need a PIN (Personal Identification Number) registered on iTax for compliance. Employers handle PAYE computation, including deductions for NSSF contributions, NHIF deductions, and pension contributions before applying tax bands.

What is PAYE?

PAYE automatically deducts tax from your salary before you receive it, ensuring KRA gets paid monthly rather than waiting for annual self-assessment.

The process follows a clear 5-step PAYE flow. First, the employer calculates taxable income by subtracting allowable deductions from gross pay.

1. Employer calculates taxable income.
2. Applies current tax bands from Finance Act 2024 (10% on first KSh 24,000, up to 37.5% on amounts over KSh 800,000).
3. Deducts reliefs like KSh 2,400 personal relief.
4. Withholds the tax amount.
5. Remits via iTax by the 9th of the next month.

The basic formula is Tax = (Gross Pay - Reliefs) × Tax Rate. For a KSh 50,000 salary, after personal relief and other deductions, tax might total KSh 5,760, leaving take-home pay adjusted accordingly.

PAYE Calculation Basics

Kenya's 2024 PAYE uses 5 progressive tax bands from 10% to 37.5%, with KSh 2,400 monthly personal relief reducing everyone's tax bill. The Kenya Revenue Authority (KRA) applies these bands to taxable income after deductions. This system ensures fair taxation on employment income.

To compute PAYE, start with gross salary and subtract allowable reliefs like pension contributions, insurance relief (up to KSh 5,000), and mortgage interest relief (up to KSh 25,000). Apply the tax bands progressively to the remaining amount. Then deduct the KSh 2,400 personal relief for the final PAYE due.

Here is a sample table for monthly salaries from KSh 30,000 to KSh 200,000, assuming no additional reliefs beyond personal relief. For example, a KSh 80,000 salary yields KSh 11,600 PAYE after computation.

Monthly Salary (KSh)	Taxable Income (KSh)	Tax Before Relief (KSh)	Personal Relief (KSh)	PAYE Due (KSh)
30,000	30,000	2,400	2,400	0
50,000	50,000	6,400	2,400	4,000
80,000	80,000	14,000	2,400	11,600
100,000	100,000	19,000	2,400	16,600
150,000	150,000	37,250	2,400	34,850
200,000	200,000	57,250	2,400	54,850

Additional reliefs can lower your bill further. For instance, NSSF contributions and NHIF deductions reduce taxable income before banding. Always check your iTax portal for accurate PAYE computation during a job switch.

Job Change Notification Process

When switching jobs in Kenya, notify your new employer within 30 days with Form P9A to avoid emergency tax rates of up to 30% on your first payslips.

The P9A must cover January-December cumulative earnings for the tax year in Kenya. This document ensures smooth PAYE computation at your new job. Without it, your new employer applies higher emergency tax code rates until proof arrives.

1. Request P9A from previous employer within 30 days of leaving to capture all year-to-date earnings and tax paid.
2. Register your new employment on the iTax portal using your PIN.
3. Submit the P9A to your new employer HR for payroll updates.
4. Update KRA employment details via iTax to reflect the job switch and avoid penalties for late filing.

Follow this 4-step process promptly to maintain tax relief like personal relief of 2400 KES and prevent double taxation. For example, if you leave in July with KSh 500,000 earnings already taxed, the P9A stops your new salary from being taxed fully again. Experts recommend keeping copies for your IR1 form submission by year-end.

Form P9A from Previous Employer

Form P9A shows your year-to-date earnings and tax paid, preventing double taxation when starting new employment mid-year.

This form lists key details like Total Earnings (KSh), Total Tax Paid (KSh), and Month-End Balances. Your previous employer issues it under Income Tax Act Cap 470. It helps compute cumulative tax across the tax year Kenya from January to December.

1. Email your HR request before your last working day, mentioning the need for P9A due to job change.
2. Employer generates it via Sage Payroll or QuickBooks, typically within 48 hours.
3. Verify P9A totals match payslips, checking PAYE deduction, NHIF deductions, and NSSF contributions.
4. Get a KRA-stamped copy if disputed, contacting KRA via iTax for validation.

If delays occur, remind your employer of their employer obligations Kenya for monthly PAYE remittance. For instance, a mid-year switch with prior pension contributions ensures tax bands Kenya apply correctly from 10% to 37.5%. Retain it for self-assessment tax to claim any tax rebate.

Starting PAYE with New Employer

Your new employer needs your PIN and P9A within first week to compute correct PAYE using your full-year earnings history. This ensures cumulative tax calculation aligns with Kenya Revenue Authority rules for the tax year Kenya from January to December. Delays can trigger higher deductions.

On Day 1, submit your Personal Identification Number and ID copy to HR for initial verification. By Day 5, provide the original Form P9A from your previous employer. Complete iTax employment registration and sign payroll authorization forms promptly.

Without the P9A, your new employer applies the emergency tax code at 30% on gross pay for the first three months. This avoids underpayment but leads to excess tax deduction until history is updated. Request your P9A immediately upon resignation to smooth the job switch tax implications.

Employers use this data for accurate PAYE computation across tax bands Kenya, factoring tax relief, pension contributions, NHIF deductions, and NSSF contributions. Confirm details via KRA portal after onboarding to verify monthly PAYE aligns with your total employment income.

Providing P9A to New Employer

Hand over original P9A to HR who inputs data into Sage Payroll or QuickBooks Kenya for seamless cumulative tax calculation. This updates Year-to-Date Earnings and Tax fields in the payroll system. It prevents errors in payroll tax for your new job registration.

1. HR scans the P9A form into the payroll software.
2. They enter previous employer earnings, tax paid, and reliefs.
3. A test PAYE calculation runs to check totals.
4. First payslip generates showing carryover from prior months.

For example, if Jan-May earnings totalled KSh 300K with KSh 45K tax paid, June monthly tax remittance builds on this baseline. HR adjusts for salary change, housing allowance Kenya, or medical allowance within taxable income rules. This maintains compliance with Income Tax Act Cap 470.

Employees must ensure P9A accuracy matches iTax login records to claim personal relief 2400 KES or insurance relief. If discrepancies arise, contact your previous employer for a corrected form. This step minimises emergency tax code risks during job transition.

Cumulative PAYE System Explained

Kenya's cumulative PAYE ensures you never overpay tax regardless of salary changes, recalculating based on full-year earnings each month. The Kenya Revenue Authority (KRA) uses this system to track your total income from January to December, the tax year Kenya. This prevents over-taxation during a job switch.

Your new employer receives your P9 form from the previous employer, showing tax paid so far. They then compute monthly PAYE by projecting your annual income and deducting prior tax. This cumulative tax approach adjusts for any salary change.

The key formula is: Monthly Tax = [Total Expected Annual Tax × (Month/12)] - Tax Already Paid. Employers apply tax bands Kenya to the projected yearly pay after reliefs like personal relief 2400 KES. Pension contributions and NHIF deductions reduce taxable income.

During a job transition, update your PIN on the KRA portal via iTax login. This ensures smooth PAYE computation and avoids emergency tax code issues. Always request your Form P9A upon resignation.

Side-by-Side Comparison: Old Job vs New Job

This table illustrates a practical example for someone earning KSh 400,000 over the first half-year in the old job, then KSh 600,000 in the new job for the second half. Total annual income reaches KSh 1,000,000, spread correctly via cumulative PAYE. Assume standard tax brackets 2024 Kenya after personal relief.

Month	Old Job (Months 1-6) Monthly Salary: KSh 66,667	New Job (Months 7-12) Monthly Salary: KSh 100,000	Projected Annual Income	Expected Annual Tax (After Reliefs)	Cumulative Tax Due	Monthly PAYE Deducted
1-6	KSh 66,667 gross Tax: ~KSh 5,000/month	-	KSh 800,000	~KSh 120,000	Month 6: KSh 60,000	KSh 5,000/month
7	-	KSh 100,000 gross	KSh 1,000,000	~KSh 200,000	KSh 200,000 × (7/12) = KSh 116,667 - KSh 60,000 paid = KSh 56,667	KSh 56,667
8	-	KSh 100,000 gross	KSh 1,000,000	~KSh 200,000	KSh 200,000 × (8/12) = KSh 133,333 - KSh 60,000 paid = KSh 73,333	KSh 16,666 (additional)
9-12	-	KSh 100,000 gross	KSh 1,000,000	~KSh 200,000	Adjusts monthly to total KSh 200,000 by Dec	Decreasing amounts to catch up

By month 12, total tax matches the 10% band, 25% band, up to 37.5% band on KSh 1,000,000. Your employer obligations Kenya include accurate monthly tax remittance. Employees should verify via iTax for job switch tax implications.

Tax Bands and Relief Carryover

The 2024 tax bands in Kenya (10% on first KSh 24,000, up to 37.5% over KSh 800,000) apply to your full-year income with personal relief carrying over automatically. These bands determine your PAYE computation based on cumulative employment income from January to December, the tax year in Kenya. Job changes do not reset this process.

Your new employer receives data from your previous employer via Form P9A, ensuring tax bands Kenya align across jobs. This prevents over-taxation or under-taxation during a job switch. For example, if you earned KSh 300,000 in the first half of the year, the second half salary slots into the correct band.

Income Range	Marginal Rate	Tax on Band
First KSh 24,000	10%	KSh 2,400
Next KSh 8,333	25%	KSh 2,083
Next KSh 467,667	30%	KSh 140,300
Next KSh 300,000	32.5%	KSh 97,500
Above KSh 800,000	35%	35% on excess

Relief thresholds like personal relief deduct monthly before applying these bands. Employers handle monthly PAYE remittance to the Kenya Revenue Authority (KRA). Check your iTax portal for accurate cumulative tax tracking after a job transition.

Personal Relief Continuity

Your KSh 2,400 monthly personal relief transfers automatically via P9A data, no reapplication needed when changing employers. The Kenya Revenue Authority links this to your PIN on every payslip. This ensures tax relief continuity for resident taxpayers.

iTax login shows relief history from previous jobs, often with screenshots of Form P9A details. Your new employer inputs this data into payroll systems like Sage payroll for seamless PAYE deduction. For instance, if you switch mid-year, relief applies fully from the first payslip.

• Personal Relief: KSh 2,400 per month on employment income.
• Insurance Relief: Up to KSh 5,000 for qualifying policies.
• Mortgage Interest Relief: Up to KSh 25,000 annually.
• Affordable Housing Relief: Up to KSh 50,000 per year.

Other carryovers include pension contributions to registered schemes and deductions like NHIF, NSSF. Update your KRA portal promptly after resignation to avoid emergency tax code issues. Experts recommend verifying P9 form from your old job before starting the new one.

Year-End PAYE Reconciliation

By December 31st, your final P9A must balance exactly with KRA records, or you'll face IR1 reconciliation and potential penalties. This process ensures your PAYE deductions for the tax year Kenya from January to December match official figures. Employers handle monthly PAYE remittances, but year-end checks catch errors from job changes.

Your previous employer issues the P9 form, specifically Form P9A, by January 15th. This document details your employment income, tax bands Kenya, and deductions like NHIF deductions or NSSF contributions. Verify it against your payslips to spot issues from a job switch tax implications.

Log into the iTax portal with your PIN to check records. If discrepancies exceed KSh 5,000, file an IR1 form for self-assessment. You can then claim a tax rebate for overpaid amounts, including missed personal relief of KSh 2,400.

Consider Jane, who changed jobs mid-year and was overtaxed KSh 12,000 due to missing reliefs like pension contributions. Her new employer applied the emergency tax code, inflating her taxable income. She got a full refund via iTax after verifying her P9A and filing IR1, avoiding penalties late filing.

Common Issues and Solutions

Job changers in Kenya often face emergency tax in the first month without a P9A from their previous employer. This leads to a flat 30% tax deduction on employment income until the new employer receives the form. Many recover the overpaid amount only after several months through the Kenya Revenue Authority process.

PAYE computation disrupts during a job switch due to missing documents or mismatches. New employers apply standard tax bands without prior details, causing higher withholdings. Understanding these pitfalls helps avoid unnecessary tax deductions.

Solutions involve proactive steps like requesting forms early and updating records on iTax. Employees must track monthly PAYE remittances to ensure accuracy. HR departments play a key role in attaching proofs for reliefs.

Common challenges also include double taxation risks with multiple jobs and late submissions leading to penalties. Filing the right forms by deadlines prevents issues. Experts recommend verifying PIN details immediately upon resignation.

No P9A: Emergency 30% Tax

Without a Form P9A from your previous employer, the new employer uses an emergency tax code. This applies 30% tax on all gross salary, ignoring personal relief or tax bands Kenya. It affects most job transitions until KRA receives the cumulative tax data.

For example, a monthly salary of KSh 100,000 faces KSh 30,000 tax instead of the correct amount after deductions. Request the P9A on your first day at the new job. Contact your previous employer promptly via email or HR portal.

The solution is simple: insist on Day 1 submission. This restores normal PAYE computation quickly. Track progress on the KRA portal using your Personal Identification Number.

Delays extend the higher rate, but recoverable via tax rebate later. Always confirm receipt with the new employer's payroll team. This step minimises job switch tax implications.

PIN Mismatch: Payroll Delays

A PIN mismatch halts payroll processing as the new employer cannot remit monthly PAYE. KRA rejects submissions if the Personal Identification Number does not match iTax records. This common error arises from typos or outdated details during new job registration.

Update your PIN immediately on iTax login after resignation. Log in, verify employment details, and notify the new employer. Payroll software like Sage payroll flags these issues early.

For instance, if your PIN links to the old employer, salary payments delay until corrected. Employers have employer obligations Kenya to validate before deductions. Resolve via KRA self-service portal within days.

Prevention involves double-checking during the employment contract tax review. This ensures smooth tax withholding agent compliance. Consult HR for assistance if needed.

Reliefs Forgotten: Overpayment

New employers often overlook tax relief claims like personal relief of KSh 2,400 or insurance relief. This leads to overpayment on taxable income, especially with pension contributions or NHIF deductions forgotten. Attach proof to HR immediately for adjustments.

Examples include missing NSSF contributions or mortgage interest relief, inflating tax by thousands monthly. Provide payslips, contribution statements, and relief thresholds documents. The payroll team recomputes using correct relief thresholds.

Overpayments recover through amended monthly tax remittance, but act fast. Employees bear employee tax responsibilities to submit evidence. This avoids cumulative errors over the tax year Kenya from January to December.

Track via iTax for tax rebate credits. Regular checks prevent ongoing over-deduction on housing allowance Kenya or medical allowance.

Late P9A Submission: Penalties

Employers face penalties of KSh 2,000 per month for late P9A form submission to KRA. This legal requirement under Income Tax Act Cap 470 ensures accurate cumulative tax tracking. Delays trigger audits and fines for non-compliance.

Previous employers must issue P9A within 30 days of termination. Remind them during notice pay taxation or resignation tax processes. Non-delivery breaches HR compliance and labour laws Kenya.

Solutions include following up persistently and escalating to KRA if needed. New employers report issues via Form TL1. Timely action avoids penalties late filing.

This protects both parties from tax audit Kenya risks. Maintain records of all communications for proof.

Multiple Jobs: Double Taxation

Holding multiple jobs risks double taxation as each employer deducts PAYE separately. Total income crosses tax brackets 2024 Kenya like 30% or 37.5% bands without aggregation. File IR1 form by January 31st to reconcile.

For example, income from a main job and side commission income leads to excess withholding. Use iTax to declare all employment income, including acting allowance or overtime pay tax. KRA adjusts for double taxation agreement if applicable.

Self-assessment tax via IR1 prevents overpayment across the tax year. Include details of all payers and PINs. This fulfils employee tax responsibilities.

Experts recommend monthly iTax reviews during job transition. Refund excess via tax clearance process. Avoid penalties by meeting the deadline.

Frequently Asked Questions

What Happens to Your PAYE When You Change Jobs in Kenya?

When you change jobs in Kenya, your Pay As You Earn (PAYE) tax is calculated afresh by your new employer based on your new salary and any updated personal reliefs or deductions. Your previous employer's PAYE contributions are reported to the Kenya Revenue Authority (KRA) via your personal iTax PIN, ensuring continuity in your tax records without double taxation.

Do I Need to Inform KRA About My Job Change for PAYE Purposes in Kenya?

No, you don't need to inform KRA directly when changing jobs, as both your old and new employers handle PAYE remittances through your PIN. However, ensure your new employer has your correct PIN to link all PAYE payments accurately to avoid discrepancies in your tax account.

How Does PAYE Transfer Between Old and New Employers in Kenya?

PAYE from your old job is already remitted to KRA under your PIN. Your new employer starts deducting PAYE from your first paycheck based on current tax bands. At year-end, KRA consolidates all PAYE via your PIN for your annual tax return, preventing any loss of credits.

What If My New Salary Changes My PAYE Bracket After Changing Jobs in Kenya?

If your new job pushes you into a higher PAYE tax bracket, your new employer will deduct the appropriate higher rate from your salary. KRA uses your full-year income across jobs to compute any underpayment or overpayment during filing, adjusting refunds or balances accordingly.

Can I Claim a PAYE Refund Immediately After Changing Jobs in Kenya?

You can't claim an immediate PAYE refund upon job change; refunds are processed after filing your annual income tax return by 30 June of the following year. All PAYE from both jobs will be reconciled then, potentially leading to a refund if total deductions exceed your liability.

Does Changing Jobs Reset My PAYE Personal Relief in Kenya?

No, your PAYE personal relief (currently KSh 2,400 per month) and other reliefs like insurance or mortgage interest continue seamlessly via your PIN. Update your new employer with any certificates for additional reliefs to ensure they're applied correctly from the start.