Updated 31 October 2026
Tax on commission income in Kenya depends on your relationship with the payer. If you are an employee, commission is part of your salary and is taxed through PAYE. If you are an independent agent, the payer deducts withholding tax before paying you: 5% for insurance brokers, 10% for other insurance agents, and 5% for sales promotion, marketing and advertising services paid to residents. You then declare the full commission on your annual return and claim the tax withheld as a credit. Rates are from KRA and PwC’s Kenya tax summary (reviewed July 2026).
Commission tax rates in Kenya (2026)
| Who earns the commission | How it is taxed | Resident rate | Non-resident rate |
|---|---|---|---|
| Employee (salesperson on payroll) | PAYE with salary | PAYE bands | PAYE bands |
| Insurance broker | Withholding tax | 5% | 20% |
| Other insurance agents | Withholding tax | 10% | 20% |
| Sales promotion, marketing and advertising agents | Withholding tax | 5% | 20% |
| Consultancy and agency fees | Withholding tax | 5% | 20% |
| Earnings through digital platforms | Withholding tax by platform | 5% | 20% |
Employees: commission is just salary
If you are on the payroll and earn commission on sales, your employer adds it to your pay for that month and deducts PAYE at the normal bands, together with SHIF and housing levy. A big commission month can push part of your pay into a higher band. See our PAYE tax bands table to estimate your net pay.
Independent agents: withholding tax is an advance, not the final tax
For residents, withholding tax on commissions and agency fees is credited against your annual tax. The steps:
- The payer deducts the withholding tax and remits it to KRA by the 20th of the next month.
- The payer issues a withholding tax certificate under your KRA PIN.
- In your annual return (due June 30), you declare gross commission minus allowable business expenses, such as transport and airtime used for work.
- You claim the certificates as tax credits. If tax withheld is more than tax due, you may have a refund; if less, you pay the balance.
Worked example: insurance agent
A resident insurance agent (not a broker) earns KSh100,000 commission in a month. The insurer withholds 10% (KSh10,000) and pays KSh90,000. Over the year, the agent declares all commissions and expenses on iTax and offsets the total withheld against the tax due on the net profit.
Is there a minimum amount?
KRA exempts resident management, professional, training and contractual fees totalling KSh24,000 or less in a month. That exemption is listed for those fee types; confirm with the payer how they classify your commission. For a fuller breakdown of the consultancy rules, read our guide to withholding tax for consultants.
Do commission agents need to register for VAT?
Only if taxable supplies exceed KSh5 million in 12 months; see our VAT registration guide. Many agents with smaller turnovers may also look at turnover tax rules; check with KRA or a tax adviser.
Online and referral commissions
Affiliate and referral commissions from platforms are business income. Where a digital platform pays you, it may withhold 5%. See tax on online income in Kenya.
FAQ
How much tax is deducted from commission in Kenya?
Employees pay PAYE. Independent agents usually have 5% withheld (10% for non-broker insurance agents) if resident, and 20% if non-resident.
Is withholding tax on commission final?
No for residents: it is credited against your annual income tax. Non-resident withholding tax is final.
Can I deduct expenses from commission income?
Independent agents can deduct expenses wholly and exclusively incurred to earn the income when filing their return.
Updated October 2026.
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