THIS IS HOW TO DO KRA RETURNS USING YOUR PHONE
“Pay As You Earn” (PAYE), as a method of tax deduction from
employee’s salaries or wages applies to all income from any office or
employment. It applies to weekly wages, monthly salaries, annual
salaries, bonuses, commissions…e.t.c. Pretty much every single coin
earned in this country within employment is liable to tax!
So as part of our two cents to Kenyan start-ups/ SMEs on workers, is that you have to do PAYE for your fixed employees and/or Withholding tax for any consultants (refer to post on Howto do Withholding tax on iTax) who are assisting you briefly – everyone “working” on your start-up is one or the other.
This post is part of our continued coverage of how to use the iTax system (refer to post, An introduction to iTax).
Since we have declared there is no way around it, the best way we can
handle it is by doing it right so as to avoid getting into any trouble.
The PAYE excel sheet that you need to download is found under the “Returns” menu item. You have to pretend that you are doing an actual return to actually get the required files.
So, go to Returns >> File Returns >> Income tax – PAYE >> Download File.
The PAYE spreadsheet is available in both Excel format and Open Document Format (for Open Office). However, when we tested it the ODF format file we found that it was not working at all! So that seems that right now, the only way is to buy Microsoft Excel (not cheap) and use the excel version. Also for the smoothest operation we recommend that you do this on a Windows machine.
Step 2: Fill out the details of the excel sheet and generate the output – zip file.
The PAYE excel sheet has various tabs and you need to fill out all the relevant ones. When you are done, validate the spreadsheet – if it has any errors, the validation will let you know otherwise it will prompt you to generate a zip file that you will upload onto iTax.
Save the zip file on your machine where you can easily access it for uploading.
Step 3: Upload the zip file onto iTax. GO TO PAGE 2 TO CONTINUE READING>>>> page 1 2
So as part of our two cents to Kenyan start-ups/ SMEs on workers, is that you have to do PAYE for your fixed employees and/or Withholding tax for any consultants (refer to post on Howto do Withholding tax on iTax) who are assisting you briefly – everyone “working” on your start-up is one or the other.
This post is part of our continued coverage of how to use the iTax system (refer to post, An introduction to iTax).
Motivation
a) The Commissioner may impose a penalty if an employer fails;-
– to deduct tax upon payment of emoluments to an employee
– to account for tax deducted (on or before the 9th of the month)
– to supply the Commissioner with a certificate prescribed under PAYE Rules.
The penalty is at the rate of 25% of the amount of tax involved or Kshs. 10,000, whichever is greater.
b) Penalty on Unpaid Tax
A penalty of 20% will be levied on PAYE tax remaining unpaid after due date.
c) Interest on Unpaid Tax
A late payment interest of 2% per month or part thereof shall be charged on amount of PAYE tax, including the penalty remaining unpaid for more than one month after the due date until the full amount is paid.
Procedure
Step 1: Download the PAYE excel sheet from iTax (similar to the one from the old tax-payer software/ ITMS).The PAYE excel sheet that you need to download is found under the “Returns” menu item. You have to pretend that you are doing an actual return to actually get the required files.
So, go to Returns >> File Returns >> Income tax – PAYE >> Download File.
The PAYE spreadsheet is available in both Excel format and Open Document Format (for Open Office). However, when we tested it the ODF format file we found that it was not working at all! So that seems that right now, the only way is to buy Microsoft Excel (not cheap) and use the excel version. Also for the smoothest operation we recommend that you do this on a Windows machine.
Step 2: Fill out the details of the excel sheet and generate the output – zip file.
The PAYE excel sheet has various tabs and you need to fill out all the relevant ones. When you are done, validate the spreadsheet – if it has any errors, the validation will let you know otherwise it will prompt you to generate a zip file that you will upload onto iTax.
Save the zip file on your machine where you can easily access it for uploading.
Step 3: Upload the zip file onto iTax. GO TO PAGE 2 TO CONTINUE READING>>>> page 1 2
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