P10 relief caps: personal relief, insurance, meals and NITA

Where the P10 form stops crediting a value, and why your total can change when a field crosses a cap.

Some P10 cells take a number and cap it before it reaches the tax. The workbook does this without saying so; iTax Help shows the same caps as field hints, so a total never changes without an explanation.

Personal relief

Personal relief is Ksh 28,800 a year^[1], which the form applies as Ksh 2,400 a month for each resident employee.

Insurance relief

Insurance relief is 15% of the premiums paid on a qualifying policy, and it stops at Ksh 60,000 a year^[2], or Ksh 5,000 a month on the form.

Deductions before tax

SHIF comes off in full^[3], and so does the employee's affordable housing levy^[4]. Pension contributions, NSSF plus any other registered fund, are credited up to Ksh 30,000 a month^[5]. The law also limits them to 30% of the employee's pensionable pay, which the form does not check, so look twice at a large contribution on a small salary.

A post-retirement medical fund is credited up to Ksh 15,000 a month^[6], and mortgage interest up to Ksh 360,000 a year, which is Ksh 30,000 a month^[7].

Meals and non-cash benefits

Meals are tax-free up to Ksh 60,000 a year, Ksh 5,000 a month, when they are served in a canteen or cafeteria the employer runs, or by a third party who is a registered taxpayer^[8]. Only the part above Ksh 5,000 is added to taxable pay.

Non-cash benefits work differently. The law taxes them once their value for the year reaches Ksh 60,000^[9], and the form applies that monthly: benefits worth Ksh 5,000 or less in a month are not taxed at all, and once they go over Ksh 5,000 the whole amount is taxed, not just the part above the line. A benefit of Ksh 5,000 adds nothing to taxable pay; a benefit of Ksh 5,001 adds Ksh 5,001.

Housing levy and NITA

Each employee pays a housing levy of 1.5% of gross salary^[10], and the employer pays an equal amount on top^[11]. The amount remitted is the employees' total plus the same again from the employer, due by the ninth working day after the month ends^[12].

The NITA levy is Ksh 600 a year for each employee^[13], and the P10 collects it monthly at Ksh 50 for each employee^[14]. Both land in Section E as live totals.

When a figure you type moves a total by less than you expected, check the field's hint: a cap is the likely reason.

Questions people ask

Why does a bigger figure not always mean a bigger relief?

Each relief stops at its cap. Once a value reaches the cap, anything above it changes other parts of the return but not that relief.

Is monthly personal relief the same for every employee?

Yes. It is Ksh 28,800 a year, which the form applies as Ksh 2,400 a month for each resident employee, and the form locks the field when an employee is not eligible for it.

Does the affordable housing levy have a cap?

No. The employee pays 1.5% of gross salary, all of it comes off before PAYE, and the employer pays the same amount again on top. What is remitted is the employees’ total plus the employer’s matching share.