advise on P.A.Y.E

I have been working as an individual consultant. For the longest time I have been thinking and just completed registration and transitioning into a company. Typically whenever I did a job the client retained and remitted 5% of the take. This week, I won got a small contract through the new company and have incorporated a few people into the bid; I am trying to calculate how much I have to reimburse each including myself and how much I will owe KRA. The question I have is, will I have to remit 30% to KRA when I am doing my returns (on top of the 5% already remitted by client?). The bid is for about $4k…

You will pay VAT at 16% and Corporation tax at 30% (5% has already been withheld, so 25%). So, around 41% of the money will go to payment of taxes.

As a consultant, you ought to file annual returns, and pay Tax at PAYE rates. The 5% that the client withheld will appear in your iTax records. If you do not file, expect penalties and fines.

Thank you very much for this; but I hope this 41% is after the salaries and expenses of the company have been factored…

Allowable expenses. Not all expenses are tax-deductable. Consult an accountant or Tax expert to help you with this.

Mimi muyamaaa Wa nil nikae wapi…

I would advise you to get an accountant or company secretary to advise you on this. Some can do it for free then you give him/her business,not as an employee but just as a service provider paid per service. He can be preparing your tax returns, financial statements generally work on tax related matters.

Alternatively you can look up on the KRA website in which tax bands your employees fall. Then you can deduct that from their salaries and pay it at the bank on or before the 9th of every month. I hope you have also registered your employees with NHIF and NSSF so that you remit the amounts decucted from their salaries every month. Since its a hassle, its advisable to contract an accountant to do this at a small fee. If you have the time you can do it youself.

can’t relate