President William Ruto has proposed that workers earning up to Ksh 32,333 a month pay no PAYE. Treasury Cabinet Secretary John Mbadi says a Bill to make the change is expected in Parliament shortly. This is a proposal, not law: PAYE is unchanged until a Bill is passed and comes into force.
What has been proposed
- Zero-rated band: income up to Ksh 32,333 a month would be taxed at 0%.
- Personal relief: the current Ksh 2,400 monthly personal relief would be removed.
- Land: Treasury has also said buyers of land worth up to Ksh 1 million would pay no stamp duty, and that higher-value purchases could pay more than today’s 4%. No rates or figures have been published.
How it compares with today
| Current PAYE | Proposed | |
|---|---|---|
| First Ksh 24,000 a month | 10% | 0% |
| Next Ksh 8,333 a month | 25% | 0% |
| Personal relief | Ksh 2,400 a month | Removed |
| Higher bands | Unchanged | Not yet published |
Treasury puts the gain for a worker earning Ksh 32,333 a month at Ksh 2,083 in PAYE. Because NSSF, SHIF and the Affordable Housing Levy are unaffected, Citizen Digital estimates the rise in take-home pay at about Ksh 1,285 a month. For higher earners, the effect depends on the final rate schedule. Treasury figures quoted by Citizen Digital show net pay at Ksh 60,000 and Ksh 80,000 a month still below where it was before SHIF and the Housing Levy were introduced.
Still unclear
- Whether the 0% band covers the first Ksh 32,333 for every taxpayer, or applies only to people earning that amount or less.
- The full rate schedule for higher earners, and the date the changes would take effect.
Who should take note
Employers and payroll teams should not change PAYE calculations yet. Watch for the Bill’s publication and commencement date, and expect to update payroll systems and employee communication once it passes.
Sources: Citizen Digital, Treasury hints at more tax changes after Ruto’s PAYE relief proposal, 23 October 2026 · Citizen Digital, PAYE changes: Scrapping Ksh.2,400 relief raises questions over employees’ take-home pay, 23 October 2026 · Capital FM via AllAfrica, Treasury to Table Bill Next Week to Exempt Earnings of Up to Sh32,333 From PAYE, 23 October 2026.
This briefing is general information, not advice. Contact the partners about your situation.