Tuesday, July 18, 2017

List of Tax Free Employment Benefits

The following are the tax-free employment benefits in Kenya as at July 2017:


  1. Medical services or medical cover provided by an employer for a full-time employee or his beneficiaries, and whole time service director. In the case of a non-whole time service director, or a sole proprietor or partner the value of the non-taxable medical benefit is up to a maximum of KShs1 million per annum.
  2. Income of up to KShs 200,000 for disabled persons to cushion them against expenses such as drugs, purchases of devices and home care services and treatment. The validity of period of Income tax exemption for persons with disabilities has been extended from three years to five years.
  3. Employer’s contribution to a pension or provident fund. However, employees of organizations not chargeable to tax are taxable on contributions the employer makes to an unregistered fund or on the excess contribution to a registered fund.
  4. Educational fees of an employee’s dependents or relatives if taxed on the employer.
  5. International passage costs paid by an employer for a non—citizen employee recruited outside Kenya.
  6. Premiums paid by employers in respect of group life policy cover that does not confer a benefit to the employee or the employee’s dependents.
  7. Benefits in kind valued at less than KShs 36,000 per annum.
  8. Meals served in canteens and cafeterias operated or established by an employer or by a third party who is a registered taxpayer either at employer’s premises or the third party’s premises where the value of the meals does not exceed Kshs 48,000 per year per employee.
  9. Payment of up to KShs 240,000 per annum into a registered pension scheme in respect of gratuity or similar payments for services rendered to an employer.

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