Kenya Instalment Tax Calculator

Background.

Instalment tax is how the Kenya Revenue Authority collects income tax in advance from businesses and individuals whose liability is not fully recovered through PAYE. Instead of waiting until accounts are complete after year-end, an in-scope taxpayer pays an annual instalment amount over four statutory dates. KRA says Turnover Tax taxpayers are excluded, while individuals generally come into scope when tax not fully covered by PAYE exceeds KES 40,000. Whether that description fits you depends on your actual income, withholding and tax status; this calculator is an educational estimator, not a KRA assessment or professional tax advice.

The annual basis is not a free choice between two methods. Section 12(2) of Kenya's Income Tax Act says instalment tax payable is the lower of two figures: tax based on the current year's estimated instalment income, or 110% of the preceding-year assessment. This calculator therefore displays both figures and automatically uses the lower one. If there is no positive preceding assessment — for example, a genuinely new business or a business moving from losses into profit — it uses the current-year estimate, matching KRA's published guidance for those situations. Entering zero merely to obtain a lower answer would not establish that the preceding basis is unavailable.

For an ordinary non-agricultural taxpayer, the calculated annual amount is divided into four equal instalments of 25%. They are due on the twentieth day of the fourth, sixth, ninth and twelfth months of the year of income. For a December year-end, those dates are 20 April, 20 June, 20 September and 20 December. Agricultural-sector taxpayers use a different 75%/25% schedule, which this page explains but does not calculate. The result also does not adjust dates for weekends, public holidays or a non-calendar accounting period.

The penalty estimate follows section 72C rather than comparing instalments with the final annual tax bill. The statutory expression is 20% of the positive difference between instalment tax payable and 110% of instalment tax actually paid. Accordingly, the final input asks what you actually paid, and the results show both 110% of that payment and the remaining penalty base. A separate year-end balance of tax can still exist, but it is not the section 72C penalty base and is outside this calculator's arithmetic. The Commissioner may remit a penalty where the statutory reasonable-cause conditions are met.

Use the results as a transparent planning check: confirm the two annual bases, review each 25% payment, and compare the statutory amount with what has actually been paid. Before filing or paying, verify your preceding assessment, current-year estimate, withholding credits, applicable schedule and any later amendments directly with KRA or a qualified Kenyan tax adviser.

What is kenya instalment tax calculator?

Instalment tax is a Kenyan advance-payment mechanism for income tax that is not fully collected through PAYE. The statutory annual amount is calculated before the year's final accounts are complete and paid during the year. This is distinct from the later balance of tax, which reconciles instalments and other credits with the final assessment.

Income Tax Act section 12(2) requires the lower of the current-year estimated basis and 110% of the preceding assessment. The calculator performs that lower-of comparison automatically. Where there is no positive preceding assessment, it uses the current-year estimate, reflecting KRA's guidance for new and loss-to-profit businesses. Ordinary taxpayers then pay 25% on each of four dates; agricultural taxpayers use a different schedule.

The penalty result is equally specific. Section 72C compares instalment tax payable with 110% of instalment tax actually paid, then applies 20% to any positive difference. It does not simply apply 20% to final annual tax minus the instalment basis. This page models that statutory expression but cannot determine exemptions, withholding credits, reasonable-cause remission or whether the figures entered match a filed assessment.

How to use this calculator.

1. 01Enter your prior year's final tax liability in KES, from your filed return.
2. 02Enter your good-faith estimate of this year's tax liability.
3. 03The calculator automatically uses the lower of the current estimate and 110% of the preceding assessment; if the preceding assessment is zero, it uses the current estimate.
4. 04Read the primary result: the amount due on each of the four quarterly instalment dates.
5. 05Enter the total instalment tax actually paid to estimate the section 72C penalty base and 20% penalty.
6. 06Treat the KES 40,000 indicator only as a screening aid for individuals; PAYE coverage and other scope rules still matter.

The formula.

First, the calculator multiplies the preceding-year assessment by 1.10. If that assessment is positive, section 12(2)'s annual instalment amount is the smaller of this 110% figure and the entered current-year estimate. If the preceding assessment is zero, the calculator treats that basis as unavailable and uses the current-year estimate, which is the method KRA identifies for new businesses and businesses moving from losses to profitability.

For the ordinary schedule, each instalment is one quarter of the annual amount. Four payments therefore reproduce the annual instalment total. This page does not apply the agricultural-sector schedule of 75% in the ninth month and 25% in the twelfth month.

For penalty exposure, the calculator multiplies total instalment tax actually paid by 1.10. It subtracts that result from the statutory instalment amount and floors the difference at zero. Section 72C's estimated penalty is 20% of that positive difference. The output called the penalty base is not the final balance of income tax and should not be interpreted as one.

The KES 40,000 result checks the calculated annual instalment amount. For an individual, the real applicability test also asks whether tax is fully covered by PAYE. Companies, Turnover Tax taxpayers, withholding credits, remissions and other fact-specific issues require separate analysis. Reviewed against the consolidated Income Tax Act and KRA guidance on 27 July 2026.

A worked example.

Frequently asked questions.

References& sources.

1. [1]Kenya Revenue Authority — Instalment Tax (basis, schedule, threshold, and underpayment penalty)
2. [2]Income Tax Act, Cap. 470 — section 12 lower-of rule, section 72C penalty formula, and Twelfth Schedule payment proportions
3. [3]Kenya Revenue Authority — Individual Income Tax overview and collection methods