Filling Statutory Deductions in Kenya.
Filling Statutory Deductions in Kenya is a requirement for business.Starting a business is a major milestone for most people.However too often we forget that their are laws governing business in Kenya.The laws ranges from labour laws,tax laws among others.
Filling Statutory Deductions in Kenya should be the second thing you should think about.Failure to register for these statutory deductions amounts to criminal offense and can be prosecuted.
How many statutory deductions do we have in Kenya?Well, am glad you asked.Namely pay as you earn (PAYE),value added tax (VAT),national hospital insurance fund (NHIF),national social security fund(NSSF).
These are the basic statutory deductions you should be making. When having a business in Kenya.Lets explore each deduction separately.
Pay as you earn (PAYE).
First of all this is a deduction that Is targeted to employees.The employer has to deduct a certain amount of money from their employees.The amount deducted is remitted to the Kenya revenue authority (KRA). This should be done before the (9TH) ninth day of preceding month.Failure to which consequently there is a penalty.
2. National Hospital Insurance Fund (NHIF)
In addition to PAYE the government requires that employers remit NHIF money.The employees are later deducted from their salaries.Being an employer and flaunt this labour laws can get you into serious trouble.Hence the NHIF money should be remitted before the ninth day of the preceding month.It helps when an employee is admitted to a hospital and requires medication.
3. National Social Security Fund.(NSSF)
NSSF is not a statutory deduction but more of an insurance.You are expected to save a portion your income with the NSSF.Especially relevant when you start imagining your retirement.Also being laid off.This fund can be save you big.This deduction also has a deadline of the ninth day of the preceding month.
4. Value Added Tax.
VAT applies to businesses which deals with services and products with VAT.This calls for you to know about how to remit the same.First you have to have an ETR machine.After a month of sales you are required to have a monthly Z report.
5. Rental income.
Finally there was a new law that was introduced in the beginning of this year.All those businesses or persons with rental income are supposed to be filling on a monthly basis.Consequently 10% of the gross rental income.To be done before the 20th day of the preceding month just as the VAT.
Filling your statutory deductions in Kenya is a simple thing. However it can also be a nightmare.If you do not have an accountant do not be worried.You can outsource our services.You can reach us on our contacts channels.