TSC Teachers to get salary increment from Dec 2024 after KRA order.
Beginning with December 2024 paystubs, Kenyans who are salaried, including as teachers and civil servants, will see a rise in their net wage.
This comes after the president signed a new tax law that will impact incomes starting in December 2024 and go into effect on December 27.
On December 13, Ruto signed the Tax Laws (Amendment) Act, 2024, into law, and it will take effect on December 27.
Employers have been instructed by the Kenya Revenue Authority (KRA) to comply with the new regulations, which will take effect for pay in December 2024.
Pay As You Earn (PAYE) is impacted by these developments. In the past, workers were disadvantaged by the way PAYE was computed.
Beginning in December, KRA has mandated that PAYE be computed after all allowances have been added to the base income, less the SHIF, Housing Levy, NSSF, and Provident Fund.
Starting this month, salaried employees will receive raises of 2% to 5%, depending on their job category.
KRA has detailed the significant pay adjustments that employed Kenyans would experience starting this month in a circular.
Depending on their work category, teachers will receive pay increases ranging from Sh 380 to Sh 4750, which would enhance their borrowing ability and put more money in their pockets.
However, many employed Kenyans are waiting to use their December salary for the Christmas holiday, and the new adjustments may cause this to happen.
The notice partially stated, “Kenya Revenue Authority (KRA) notifies employers and the public that the following changes shall be applicable in the computation of PAYE for December 2024 and subsequent periods pursuant to the Tax Laws (Amendment) Act, 2024 which comes into force on December 27, 2024.”
The Affordable Housing Levy, contributions to a post-retirement medical fund up to a monthly cap of Ksh15,000, and contributions to the Social Health Insurance Fund (SHIF) are all deductible in calculating taxable work income, according to KRA.
Mortgage interest, up to a maximum of Ksh360,000 annually, or Ksh30,000 per month, and contributions to a registered pension, provident fund, or registered individual retirement fund, up to a maximum of Ksh360,000 annually, or Ksh30,000 per month, are also included.
Employment-related non-taxable earnings and perks are exempt from income tax.
When the total value of a benefit, advantage, or facility provided in connection with employment is less than Ksh60,000 annually or Ksh5,000 monthly, this includes that amount.
Employer-provided meals valued at Ksh60,000 annually or Ksh5,000 per month are likewise exempt from income tax.
Additionally, Ksh360,000 in annual gratitude payments from the employer will not be taxed as income. The contribution given to the retirement pension plan is often the thankfulness payment.
With additional money promised for them, these reforms should ease the financial burden for many households as Kenyans prepare for 2025.
TSC Teachers to get salary increment from Dec 2024 after KRA order.
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