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Even non-profit or charitable schools must navigate a mix of taxes and mandatory deductions. Use this as your quick-reference roadmap to stay compliant—and save on penalties.
1. PAYE (Pay As You Earn)
Who it covers: All salaried staff—teachers, administrators, support staff.
What it is: Income tax you deduct from each employee’s salary (including bonuses, housing allowance, etc.)
How often: Monthly via the KRA iTax portal
Action Steps:
- Calculate each employee’s gross pay and allowances.
- Deduct the correct PAYE using the KRA tax bands.
- Remit the total PAYE to KRA by the 9th of the following month.
- File the monthly PAYE return and upload a PDF of the schedule on iTax.
Tip: Automate these calculations in your payroll software to avoid manual errors and penalties for late remittance.
2. NSSF & NHIF Contributions
Who it covers: All employees (whether salaried or hourly)
What they are:
- NSSF (retirement fund): Ksh 200–2,160 per month per employee under the latest rates.
- NHIF (health insurance): Graduated contributions based on gross salary.
How often: Monthly, at the same time as PAYE
Action Steps:
- Add NSSF & NHIF columns to your payroll sheet.
- Deduct each employee’s share and add the employer’s portion (for NSSF)
- Pay both funds via the iTax portal under “Monthly NSSF/NHIF Returns.”
Tip: Bundle NSSF/NHIF with PAYE in one iTax session to streamline entries.
3. Withholding Tax (WHT)
Who it covers: Vendors and contractors you pay for services or rent.
Common examples: Consultancy fees, audit/legal/IT services, rent to landlords.
Rates:
- Professional services: 5–10% (depending on resident status)
- Rent: 10% (if the landlord is not exempted by KRA)
Action Steps:
- Before payment, confirm each vendor’s WHT status (resident vs non-resident)
- Deduct the correct WHT amount from each invoice.
- Remit and file the WHT return within 30 days of month end.
Tip: Keep vendor PINs on file so you can generate a valid WHT certificate for them after remittance.
4. VAT (Value Added Tax)
Who it covers: Institutions selling non-core products or services.
Core education services are VAT-exempt, but VAT applies when you:
- Sell uniforms, textbooks, stationery
- Run a canteen or boarding fees
- Rent out facilities (e.g., halls for events)
Registration threshold: Ksh 5 million annual taxable turnover
Action Steps:
- Track taxable vs exempt revenue streams separately in your accounting software.
- Register for VAT as soon as you approach Ksh 4 million turnover to avoid last-minute rush.
- File VAT returns (monthly or quarterly) and pay any VAT due via iTax.
Tip: Use a simple chart of accounts—one category for tuition (exempt), another for canteen sales (taxable)—to avoid confusion.
5. Corporation Tax (For-Profit Institutions)
Who it covers: Private schools or colleges operating as for-profit companies
Rate: 30% of net taxable income
How often: Annual return and payment via iTax by September 30th each year
Action Steps:
- Compute net profit per the Income Tax Act (revenue minus allowable expenses).
- File an annual IT 12 return on iTax, and settle any tax due.
- Charitable trusts must apply to KRA for exemption and renew annually.
Tip: If you’re a non-profit, don’t assume exemption—apply formally to KRA and keep the exemption letter on record.
6.Digital Service Tax (DST)
Who it covers: Institutions offering paid digital content or online learning to customers outside Kenya.
Rate: 1.5% of gross transaction value
How often: Monthly
Action Steps:
- Identify any revenue from non-resident learners or platforms.
- Calculate DST at 1.5% of that turnover.
- File and pay via iTax under DST returns.
Tip: If digital sales are small, track cumulative revenue monthly to decide if DST applies.
At-a-Glance Summary
| Tax / Contribution | Applies To | Frequency |
| PAYE | All salaried staff | Monthly |
| NSSF / NHIF | All employees | Monthly |
| Withholding Tax | Consultants, service providers, landlords | Per payment (remit monthly) |
| VAT | Non-core commercial activities | Monthly/Quarterly |
| Corporation Tax | For-profit schools & colleges | Annually |
| Digital Service Tax | Online courses/content to non-residents | Monthly |
How Accotax Keeps Your Institution Compliant—and Stress-Free
- End-to-end payroll & PAYE management
- NSSF/NHIF setup and remittance
- Withholding Tax tracking, filing & certificates
- VAT registration, advisory & return filing
- Annual returns, audit support, and exemption applications
- DST calculations & filings (where relevant)
📞 Get started: Call/WhatsApp 0700 488 330
✉️ Email: gloria@accotax.co.ke
🌐 Learn more: accotax.co.ke
With Accotax handling the numbers, you can focus on delivering exceptional education. Stay compliant—and worry-free.
