Treasury Cabinet Secretary John Mbadi announced that the zero‑PAYE threshold will be increased to KSh 32,333 per month, ending the current KSh 2,400 monthly personal relief for all workers.

Workers earning KSh 32,333 or less will pay no income tax, taking an additional 362,846 employees out of the PAYE bracket and raising the exempt share of formal workers from about 38% to nearly 49%.

The first KSh 32,333 of monthly earnings will be tax‑free, replacing the existing system where the first KSh 24,000 is taxed at 10% before the KSh 2,400 relief cancels the liability.

Higher PAYE rates of 25%, 30%, 32.5% and 35% remain unchanged, meaning the relief removal mainly impacts the lower end of the scale.

Employees earning between KSh 32,334 and KSh 50,000 will see a modest monthly tax reduction of up to KSh 596, while those at the exact threshold could gain about KSh 2,083 on their payslip.

For earners above KSh 50,000, the loss of personal relief raises deductions: a KSh 60,000 salary will incur KSh 473 more tax per month, KSh 100,000 will add KSh 892, and KSh 200,000 will see an extra KSh 3,867 each month.

The Treasury expects the implementing bill to be tabled in Parliament next week, but employers must continue applying the current PAYE rules until the legislation is passed and gazetted.

Finance and Planning Committee chair Kuria Kimani confirmed the bill’s imminent introduction, while Mbadi framed the changes as a response to public frustration over tax burdens.

The Kenya Bankers Association has called for a broader five‑percentage‑point cut across all PAYE bands, a proposal not adopted in the Treasury’s current plan.