KRA Turnover Tax Calculator

Background.

A hardware shop that sells KSh 500,000 of goods in a month owes turnover tax on the KSh 500,000, not on whatever is left after paying for stock, rent and staff. That is the bargain the regime offers small businesses in Kenya: no profit-and-loss computation and no expense records to defend, in exchange for a small percentage of every shilling that comes in. The return and the payment are due on or before the 20th day of the month after the month they cover.

The arithmetic follows that rule. Monthly gross sales times the rate gives the month's tax; anything already paid towards it comes off, though never below zero. The rate is a field rather than a fixed number because it has changed more than once. Its default is 1.5%, the rate in the Third Schedule to the Income Tax Act as consolidated at 1 July 2026 and the rate on KRA's turnover tax page; earlier periods were taxed at other rates, such as the 3% set by the Finance Act 2019. Enter the rate in force for the month you are filing: on KSh 500,000 of sales, 1.5% is KSh 7,500 and 3% is KSh 15,000.

Turnover tax is only for businesses inside a band. KRA applies it to resident persons, individuals or companies, whose gross turnover is more than KSh 1,000,000 and does not exceed KSh 25,000,000 in a year of income, and those two limits are the default thresholds here. Your month's sales are multiplied by 12 and the result is reported as inside the band, below it or above it. That is a screen, not a ruling, because one month can be a poor guide to a whole year. The law also counts turnover that is expected for the year, so a business in its first months can judge the band from a realistic projection rather than from sales so far.

The band is not the only condition. Rental income, management, professional and training fees, and income already taxed through final withholding tax cannot be put through turnover tax, and non-residents cannot use it at all. A business inside the band may also choose to leave the regime by writing to the Commissioner and be taxed on its profits instead.

What is kra turnover tax calculator?

Turnover tax (TOT) is a simplified tax on the gross sales of small resident businesses in Kenya, set out in the Income Tax Act and administered by KRA through iTax. It applies where annual gross turnover is more than KSh 1,000,000 and not more than KSh 25,000,000. The base is gross sales or receipts for the month: no expenses of any kind are deducted, which is what separates it from income tax on profit. It is a final tax, so the business's income from those sales is not taxed again. A business on turnover tax files a TOT return and pays by the 20th of the following month, and it does not pay instalment tax. No expense records are needed for the computation, but records of sales still have to be kept, for five years under the Tax Procedures Act. TOT is not VAT: it is a tax on the business's own takings, not something added to the customer's price.

How to use this calculator.

1. 01Enter the month's gross business turnover in Kenya shillings: all sales or receipts from the business, cash and M-Pesa alike, before any expenses. Leave out rent you collect and professional or management fees, which are taxed under other rules.
2. 02Enter the turnover tax rate for the month you are filing. The default is 1.5%, the rate KRA's turnover tax page gives today; if you are filing an older month, enter the rate that applied then (3%, for example, under the Finance Act 2019).
3. 03Leave the lower and upper annual limits at KSh 1,000,000 and KSh 25,000,000, the band KRA publishes, unless the law changes.
4. 04If you have already paid part of the month's tax, enter that amount as a credit. Business expenses are not credits and do not belong in this box.
5. 05Read the gross tax, the net tax still to pay, and the band check. If the check says your turnover is outside the band, look at your actual sales for the year before relying on the result.

The formula.

The month's tax is TOT = T × r ÷ 100, where T is gross monthly turnover in KSh and r is the rate in percent. The net amount still to pay is Net = max(0, TOT − Credit), so a credit larger than the tax gives zero rather than a negative figure; any excess is not turned into a refund or carried forward.

The band check is separate from the tax. Annualised turnover is T × 12, and it is compared with the lower and upper limits you enter. A figure that is more than the lower limit and not more than the upper limit is reported as inside the band; anything else, including a figure exactly equal to the lower limit, is reported as below the lower limit or above the upper one. That follows KRA's wording, which applies turnover tax where turnover is more than KSh 1,000,000 and does not exceed KSh 25,000,000, so a year of exactly KSh 1,000,000 is outside the band and exactly KSh 25,000,000 is inside it. The tax is calculated whatever the check says, so a result outside the band still shows the arithmetic, but it is not a tax you would owe under this regime.

At 1.5%, every KSh 100,000 of sales carries KSh 1,500 of tax; at 3%, KSh 3,000. Monthly turnover above about KSh 83,333 and up to about KSh 2,083,333 annualises to a figure inside the default band. Measured against profit rather than sales, the burden depends on the margin: a shop with KSh 500,000 of sales and an 8% margin makes KSh 40,000, so KSh 7,500 of tax at 1.5% takes 18.75% of its profit, and KSh 15,000 at 3% takes 37.5%.

Two simplifications matter. Multiplying one month by 12 assumes every month is like it, which seasonal businesses are not. And the rate is a flat percentage of whatever you enter, so it cannot tell business sales from rental income or fees that are taxed elsewhere; only include turnover that belongs in the regime. Turnover and the rate may be zero but not negative, and the upper limit must be above the lower.

A worked example.

Frequently asked questions.

References& sources.

1. [1]Kenya Revenue Authority (n.d.). "Turnover Tax (TOT)." KRA.
2. [2]Kenya Revenue Authority (n.d.). "Turnover Tax Brochure." KRA.
3. [3]Kenya Law (2024). "Income Tax Act, Cap. 470." National Council for Law Reporting.
4. [4]National Institute of Standards and Technology (2026). "NIST Handbook 133, Appendix E: General Tables of Units of Measurement." U.S. Department of Commerce.
5. [5]Bureau International des Poids et Mesures (2019). "The International System of Units (SI Brochure), 9th edition." BIPM.