How to File PAYE KRA Returns for Employees

How to File PAYE KRA Returns for Employees
Navigating through the tax landscape can be overwhelming, especially when dealing with various tax obligations, such as the Pay As You Earn (PAYE) for employees. This comprehensive guide will take you through the process of filing PAYE Kenya Revenue Authority (KRA) returns for employees in a conversational manner, making it simple and easy to understand.


Understanding PAYE in Kenya




Before we dive into the process of filing returns, let's first understand what PAYE is. PAYE, an acronym for Pay As You Earn, is a method of tax deduction from employees' income at the point of payment by the employer on behalf of KRA. The responsibility of calculating, deducting, and remitting the tax to KRA rests with the employer.

Also Read: KRA Portal

Why is PAYE Important?



PAYE is an integral part of Kenya's tax system because it simplifies the tax payment process. Instead of employees having to calculate and pay their taxes independently, the employer does this on their behalf. This not only ensures compliance but also helps to streamline the tax collection process.


Getting Started: What You Need to File PAYE Returns




Before filing PAYE returns, you need to have the following:

- KRA PINs for your company and all your employees: These unique identification numbers are used in all transactions involving tax payments and filings.


- P9 forms for all your employees: These forms provide a breakdown of each employee's income and the tax deducted.


- Access to the KRA iTax system: This is the online portal where all tax filings are done.

Now that you have what you need let's delve into the steps of filing PAYE KRA returns for employees.


Step-by-Step Guide to Filing PAYE Returns




Step 1: Log Into the iTax System


The first step is to log into the iTax system using your company's KRA PIN and password. If you don't remember your password, there's a 'Forgot Password' option that allows you to reset it.


Step 2: Navigate to Returns Menu


Once logged in, navigate to the 'Returns' menu on the dashboard and select 'File Returns.'


Step 3: Select the Return Type


A new page will open where you'll be required to select the type of returns you want to file. For PAYE, select 'Income Tax - PAYE.'


Step 4: Fill Out the Returns Form


The next step is to fill out the online returns form. You'll need to input details such as the return period, gross pay, taxable pay, tax charged, tax remitted, and any other necessary information.


Step 5: Validate and Submit the Form


After filling out the form, validate and submit it. An acknowledgment receipt will be generated, which you should download and keep for your records.

Read Also: How to File PAYE Returns for a Company


Common Challenges and How to Overcome Them




Filing PAYE returns for multiple employees can be a challenging task, especially for larger organizations. However, the iTax system allows for bulk filing, which can save time and effort. All you need to do is prepare a properly formatted Excel or CSV file with all the required details and upload it to the system.

Additionally, it's crucial to ensure that all your employees' KRA PINs are updated in the iTax system to avoid discrepancies during filing. Regularly updating your employee data can help you avoid unnecessary inconveniences.


Conclusion




Filing PAYE KRA returns for employees in Kenya doesn't have to be a daunting task. With the right preparation and a clear understanding of the process, you can ensure tax compliance for your organization with relative ease. Remember, staying tax compliant not only helps Filing PAYE KRA returns for employees in Kenya doesn't have to be a daunting task. With the right preparation and a clear understanding of the process, you can ensure tax compliance for your organization with relative ease.


FAQs




What is the deadline for filing PAYE KRA?


The monthly Pay As You Earn (PAYE) tax deductions should be remitted to the Kenya Revenue Authority (KRA) by the 9th day of the following month. For example, the PAYE for January should be filed and paid by 9th February. Late remittance will attract penalties and interest.


How do I download P9 forms for employees?


The P9 form is provided by the employer to the employee for tax return purposes. As an employer, you can download P9 forms for your employees from the KRA iTax portal by following these steps:

- Log into your iTax account using your PIN and password.


- Navigate to the "Employers" menu and select "P9 Forms."


- Select the year for which you want to download the P9 form.


- Click "Generate" and the system will generate the P9 forms for all your employees.


- Download the P9 forms and distribute them to your employees.

Can you file returns without P9 form?


While the P9 form is vital in filing returns because it details your income and the tax deducted, there may be cases where you don't have it. For instance, if you're unemployed or a student, you won't have a P9 form but you're still required to file nil returns.

However, if you're employed and don't have a P9 form, it may be challenging to file accurate returns because you won't have the necessary information. It's advisable to request this form from your employer if you don't have it.

 
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