How To File Kra Returns For Employees In Kenya

KRA (Kenya Revenue Authority) returns are important for both employees and employers in Kenya. As an employer, it’s your responsibility to ensure that your employees’ taxes are properly deducted and remitted to the KRA. File KRA returns for employees is a legal obligation and failure to do so can result in penalties and fines.

In this guide, we’ll walk you through the steps you need to follow to file KRA returns for your employees in Kenya.

Step 1: Register for iTax

Before you can file KRA returns for your employees, you must register for iTax. iTax is an online platform that allows taxpayers to interact with the KRA. You can register for iTax by following these steps:

1. Visit the KRA iTax website at https://itax.kra.go.ke/KRA-Portal/
2. Click on the “Register” button.
3. Select “New PIN Registration” and click on the “Next” button.
4. Enter your KRA PIN, your full names, and your date of birth.
5. Fill in your personal details, including your email address, mobile number, and postal address.
6. Create a password and security question.
7. Click on the “Submit” button to complete your registration.

Once you’ve completed your registration, you’ll receive a PIN certificate via email. You’ll need this certificate to file KRA returns for your employees.

Step 2: Prepare your Employees’ P9 Forms

The P9 form is a document that shows the income earned by an employee and the taxes deducted from their salary. As an employer, you’re required to prepare and issue P9 forms to your employees by the end of January each year.

To prepare your employees’ P9 forms, you’ll need to gather the following information:

1. Employee’s full name and KRA PIN
2. Employee’s gross pay (i.e., their salary before any deductions)
3. Employee’s total taxable income (i.e., their gross pay minus any allowable deductions)
4. Employee’s PAYE (Pay As You Earn) tax deducted
5. Employee’s NHIF (National Hospital Insurance Fund) contributions
6. Employee’s NSSF (National Social Security Fund) contributions

Once you’ve gathered this information, you can use the KRA’s P9 generator tool to create the P9 form for each of your employees. The P9 generator tool is available on the iTax platform.

Step 3: File your Employees’ KRA Returns

Once you’ve prepared your employees’ P9 forms, you can file their KRA returns using the iTax platform. To do this, follow these steps:

1. Log in to your iTax account using your KRA PIN and password.
2. Click on the “Returns” menu and select “File Nil Return.”
3. Select the “PAYE” option and enter the tax period for which you’re filing the returns (i.e., the calendar year).
4. Enter your employer details, including your KRA PIN, full name, and postal address.
5. Enter your employees’ details, including their KRA PIN, full name, and total taxable income.
6. Enter the total PAYE tax deducted from your employee’s salaries.
7. Enter the total NHIF and NSSF contributions made by your employees.
8. Review the information you’ve entered and click on the “Submit” button.

Once you’ve submitted your employees’ KRA returns, you’ll receive a confirmation message. You’ll also be able to download a copy of the returns for your records.

Step 4: Pay any Outstanding Tax Balances

If you owe any outstanding tax balances to the KRA, you’ll need to pay these before you can file your employees’ KRA returns. You can pay your outstanding tax balances using the iTax platform. To do this, follow these steps:

1. Log in to your iTax account using your KRA PIN and password.
2. Click on the “Payments” menu and select “Payment Registration.”
3. Select the tax type you want to pay (e.g., PAYE) and enter the tax period for which you’re making the payment.
4. Enter the amount you want to pay.
5. Select your preferred payment method (e.g., mobile money, bank transfer, credit/debit card).
6. Enter your payment details (e.g., mobile money number, bank account number).
7. Review the information you’ve entered and click on the “Submit” button.

Once you’ve submitted your payment, you’ll receive a confirmation message. You’ll also be able to download a receipt for your records.

Step 5: Keep Records

As an employer, it’s important to keep accurate records of your employees’ taxes and contributions. You should keep copies of your employees’ P9 forms, KRA returns, and any payment receipts.

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Keeping good records will make it easier for you to file your KRA returns in future years. It will also make it easier for you to respond to any queries or audits from the KRA.

Conclusion

Filing KRA returns for your employees is an important part of your legal obligations as an employer in Kenya. By following the steps outlined in this guide, you can ensure that you’re complying with the law and avoiding any penalties or fines.

Remember to register for iTax, prepare your employees’ P9 forms, file their KRA returns, pay any outstanding tax balances, and keep accurate records. With these steps in place, you can file your KRA returns with confidence and peace of mind.