Every year around this time, we have the same conversation with clients — usually in late June, usually with some urgency in their voice.
“I just need to file quickly before the deadline. My employer does PAYE, so it should be straightforward, right?”
Sometimes yes. Often, not quite. And the difference between those two outcomes can be a significant amount of money — either left unclaimed or, worse, undeclared and flagged later.
The 30th June 2026 deadline is coming fast. Before you rush through that iTax form, here are five things we see employed Kenyans get wrong almost every filing season about KRA Returns.
1. Assuming PAYE Means You Have Nothing to Declare
This is the big one. If your employer deducts PAYE every month, you might reasonably think: KRA already has my money, filing is just a formality. And for some people, that is true. But the moment you have any income outside your payslip, the picture changes entirely.
Do you rent out a room, an apartment, or land? That is rental income — and it is taxable. Do you consult on the side, take freelance work, or earn a commission from a second source? That needs to be declared. Did you sell shares or property in 2025? Capital gains may apply.
KRA’s systems are now cross-referencing declared income against bank records, M-Pesa transaction data, and withholding tax records. The era of hoping that side income quietly disappears is, frankly, over. We always tell our clients: declare it correctly the first time. It is far less painful than explaining it later.
2. Filing Without Claiming the Reliefs You Are Entitled To
Here is where most salaried Kenyans genuinely leave money on the table — and it is completely avoidable.
There are several reliefs you can claim when filing your individual return that many people either do not know about or simply skip because the form feels like a lot of work:
Mortgage interest relief: If you have a home loan and are paying interest on it, that interest is deductible. Many people with mortgages file without claiming this. Their bank can provide a certificate showing the interest paid — it takes a single document and saves real money.
Insurance relief: If you pay private health insurance premiums for yourself or your family, you are entitled to claim 15% of those premiums as relief, up to KSh 5,000 per month. If your employer’s group medical scheme covers you, check whether you are also paying a personal premium on top — that portion may still qualify.
Pension contributions: Contributions to a registered pension or provident fund beyond what NSSF takes are also deductible up to the allowable limits. If you have a personal pension plan running alongside your employment, pull out that annual statement.
We see clients who have been filing for years without touching these reliefs. The refund or reduced tax liability when they finally claim can be a pleasant surprise.
3. Having Two Jobs and Not Knowing What That Means for Tax
The gig economy and side hustles have made this increasingly common. Someone has a full-time job with an employer who deducts PAYE, and they also consult for a second company that pays them on a contract basis — sometimes with withholding tax deducted, sometimes without.
Here is where it gets complicated. Each employer calculates PAYE as though they are your only employer. They apply the full personal relief and the full tax band progression to their portion of your income. But when you combine both income sources, your total income may push you into a higher tax bracket than either employer accounted for.
The result? You may owe more tax than was deducted across the year. Filing your return is where that gets reconciled — and if you have not done it accurately, that gap shows up as underpaid tax, with interest.
We always advise anyone with multiple income sources to run the combined numbers before filing, not after. It avoids nasty surprises and gives you time to plan for any balance due.
4. Forgetting That 2026 Filing Is Different From Any Year Before
This one is new — and critically important.
From 1st January 2026, KRA began validating income and expenses declared in individual returns against eTIMS data, withholding tax records, and customs import data. This is not just a business issue. If you are self-employed, a consultant, a landlord, or a sole trader filing as an individual, the invoices and records behind your income and expense declarations are now being cross-checked against what exists in KRA’s systems.
If you declared business expenses in your individual return but your suppliers did not transmit compliant eTIMS invoices, those expenses may be automatically disallowed. Your taxable income goes up, and so does your tax bill.
For purely salaried individuals with a clean P9 and no side income, this matters less. But for anyone with any form of self-employment or business income folded into their individual return, the documentation bar has risen. Significantly.
5. Filing in the Last Week of June
We say this every year and every year the iTax portal becomes a digital traffic jam in the final days of June. The system slows down. Submissions time out. People who started the process on the 28th find themselves scrambling on the 30th with error messages and no acknowledgment receipts.
The late filing penalty is straightforward: the higher of 5% of the tax due or KSh 2,000 — and it kicks in from 1st July with no grace period. Late payment interest accrues at 1% per month on any unpaid balance. Neither of these is catastrophic on its own, but they are entirely avoidable.
More importantly, filing early gives you time to notice if something is wrong. An incorrect return can be amended — but it is much easier to do that before the deadline than after, and certainly before KRA notices it first.
One Thing Worth Knowing About the Tax Compliance Certificate
If you are a business owner, a landlord, or a professional who bids on tenders or applies for bank loans, your Tax Compliance Certificate (TCC) is tied directly to your individual return being filed and any balances being settled. An unfiled return — even one where you technically owe nothing — can block a TCC renewal. We have seen this create real problems for clients at exactly the wrong moment.
File early. File accurately. Keep the acknowledgment receipt.
We Can Help
Individual returns can seem simple until they are not — and by the time you discover a problem, the deadline has usually passed. At Taxmart Kenya, we handle individual and corporate returns for clients across industries, making sure reliefs are claimed, income is correctly declared, and nothing falls through the cracks.
If you would like us to handle your 2025 return filing — or simply review a return you have already prepared — get in touch with us here before the June 30th deadline. The earlier, the better.
