KRA introduces simplified PAYE filing system effective July 1
KRA has directed all employers to adopt the new format by July 1, 2025. To help businesses adjust, the simplified Excel return form and a sample CSV file have been uploaded on the KRA website under the publications section: www.kra.go.ke
The Kenya Revenue Authority has announced a new, simplified method for filing Pay As You Earn (PAYE) returns, with the system expected to take effect from July 1, 2025.
In a public notice issued on Monday, the authority said the new system is designed to make the process easier for employers in the public, private, and non-profit sectors, and aligns with its broader digital transformation agenda.
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“Kenya Revenue Authority (KRA) has simplified the PAYE return filing and payment process to align with the simplified return from taxpayers to improve the user experience for all, including the public, non-profit, and private sectors,” read part of the notice posted on the tax agency’s official X account.
Under the theme “KRA Simplifies the PAYE Return Filing Process,” KRA has introduced an Excel-based return template to replace the current method.
This simplified format is meant to support ongoing reforms in tax administration, and make it easier for employers to meet their tax obligations.
According to the notice, the new process is designed to connect with key government systems through API links, including the Integrated Management Information System (iMIS) and the Central Bank of Kenya.
This integration will allow for automatic deduction and remittance of statutory contributions such as the Affordable Housing Levy, NITA Levy, and other deductions tied to PAYE.
KRA has directed all employers to adopt the new format by July 1, 2025. To help businesses adjust, the simplified Excel return form and a sample CSV file have been uploaded on the KRA website under the publications section: www.kra.go.ke.
Employers are urged to align their payroll systems with the new format before the deadline to avoid penalties for non-compliance. The move follows years of calls for reforms dating back to 2020.
The changes also build on other digital tools introduced by KRA, such as the Electronic Tax Invoice Management System (eTIMS), which helped reduce VAT fraud by 15 per cent in 2023.
The simplified PAYE return is part of the wider 2022 National Tax Policy goals to close the country’s tax revenue gap, estimated at 6 per cent of GDP. It also complements other innovations such as GAVA Connect, a government platform launched in 2024 to support digital access to public services.
The public notice was signed by the Commissioner for the Micro and Small Taxpayers Department and highlights KRA’s focus on sector-specific, tech-driven tools to improve tax compliance and support ease of doing business.
With only a few days left before implementation, employers have been urged to act quickly and adopt the new system to ensure a smooth transition.
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