How Do You Manage Monthly Deductions in Kenya?
Employees’ salaries or wages are an essential subject especially when it comes to managing monthly deductions in Kenya. In the year 2000, the government of Kenya set a benchmark of collecting 24% of the GDP (Gross Domestic Product) as taxes.
Individuals with low income paid 10% in tax and those with high income paid 65% in tax. However, these figures have continued to change given the amendments of laws in the country. As well as the introduction of other monthly deductions in organizations apart from the statutory deductions.
So how do you manage monthly deductions in Kenya?:
In Kenya, contribution to the statutory deductions is a legal requirement, and failure to register for these deductions results in serious penalties that cost a business or an individual money.
Employers make monthly deductions in Kenya from employee’s wages and the calculation varies by deduction type. The three deductions have different rates considering during calculations.
Sometimes an employee is in urgent need of cash before the next payday. A salary advance is aiming to making sure that low-income employees are able to access salary advances. A monthly fee is charging the employee despite the time one took the advance.
Some organizations make monthly contributions to a welfare kitty. Usually, it’s an agreed amount of money that is deducting from employees’ wages.
Welfare deductions go towards helping other employees financially during tough times. Including a time of illness, loss of a loved one, and others. In addition, these deductions can go towards giving back to the community. It certainly depends on the agreement between employers and employees.
Asset deductions are also one of the monthly deductions in Kenya. Some organizations, for example, private security firms offering assets to their employees. Employees receiving uniforms in terms of jackets, boots, and others. Other organizations offer office equipment like laptops, phones, and cars. The deductions are deducting from every employee who has custody of any company assets.
This deduction tends to happen only once the employee responsible is in possession of the asset. Usually, record keeping for accountability purposes.
In conclusion, every organization has monthly deductions in Kenya that one is meant to be deducting from its employee’s wages. Keeping track and managing these processes can be difficult for an employee, employer or just anybody needing to file their returns.
Still unsure of how to be going about this including, How to get P9 forms in Kenya or Everything you need to know about new PAYE rates 2020 click the highlighted links NOW and NEVER WORRY AGAIN!
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