In a decisive move that will bring relief to thousands of low-income earners across Kenya, President William Ruto has overruled Treasury concerns and approved the elimination of PAYE tax for workers earning up to Sh30,000 monthly.
Speaking at the National Prayer Breakfast at Safari Park in Nairobi County on Thursday, President Ruto announced that the government will proceed with the tax relief despite warnings from the Treasury that it could cost the budget approximately Sh40 billion.
“The Treasury came back and said, ‘Oh, Mr. President, you know this is going to be very big. You know it’s going to cost us Sh40 billion in this budget.’ I told them, ‘Let’s do it. Let’s do it,’” the President stated firmly.
The relief targets workers earning up to Sh24,000 who currently pay PAYE at 10%, as well as those earning up to Sh30,000. According to the President, these groups will no longer be required to pay income tax, providing much-needed financial breathing room for Kenya’s lowest earners.
This announcement comes after Treasury CS John Mbadi had indicated that the PAYE relief did not feature in the proposed Finance Bill 2026, citing concerns about revenue collection and budget balancing. However, the President’s directive now overrides these concerns.
The proposals also include raising the tax-free threshold to Sh30,000 and reducing the 30% tax bracket to 25% for middle-income earners. Workers are expected to see net pay increases ranging from Sh731 to over Sh2,000, depending on their income levels.
For Kenyan workers struggling with the rising cost of living, this tax relief represents a significant win. Managing personal finances effectively becomes easier when you keep more of what you earn. Consider using budgeting apps or financial planning tools to maximize these savings.
Read the full story on Nairobi Wire: https://nairobiwire.com/2026/05/ruto-paye-tax-relief-low-income-earners-sh30000-kenya-2026.html