Kenyan workers are set to receive significant financial relief following President Ruto’s decision to eliminate PAYE tax for those earning up to Sh30,000 monthly. But the benefits don’t stop there—middle-income earners could also see substantial gains through proposed tax bracket adjustments.
According to Treasury projections, the comprehensive tax reforms could result in net pay increases ranging from Sh731 to over Sh2,000 per month, depending on income levels. The proposals include not only the PAYE exemption for low earners but also a reduction in the tax rate for middle-income brackets from 30% to 25%.
For someone earning Sh30,000 who currently pays approximately Sh2,400 in monthly PAYE, the elimination of this tax means immediate extra cash for household expenses, savings, or investment. Middle-income earners in higher brackets would benefit from the rate reduction, potentially saving over Sh2,000 monthly.
Treasury Cabinet Secretary John Mbadi had expressed concerns about implementing these changes, noting they require careful economic assessment and revenue simulations. The government estimates the overall cost at Sh40 billion, a significant hit to the national budget that will need to be offset through other revenue measures.
To compensate for the revenue loss, the government plans to widen the personal income tax base—potentially bringing more informal sector workers into the tax net while reducing the burden on those already paying. This approach aims to make the tax system more equitable while providing immediate relief to those who need it most.
The timing of this announcement is particularly significant as Kenyans continue to grapple with high living costs, including elevated food and fuel prices. The extra disposable income could provide much-needed breathing room for families struggling to make ends meet.
Financial experts recommend that workers who benefit from this relief should consider using at least a portion of the extra income for emergency savings or investments rather than immediately increasing lifestyle expenses.
For complete coverage, visit https://nairobiwire.com/2026/05/ruto-paye-tax-relief-low-income-earners-sh30000-kenya-2026.html
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