New KRA P9 Format
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New KRA P9 Format

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Jun 23rd, 2025

New KRA P9 Format

The Kenya Revenue Authority (KRA) has updated the official P9 form following changes introduced by the Finance Act 2024 Kenya, which took effect in December 2024. The new format reflects important updates in how certain deductions are treated for tax purposes, especially the Affordable Housing Levy (AHL) and the Social Health Insurance Fund (SHIF).

Understanding the new KRA P9 format is important for both employers and employees to ensure accurate tax filing and full compliance with Kenya’s updated payroll laws.

What Is the KRA P9 Form?

The P9 form is a tax document issued by an employer that shows an employee’s:

  • Total earnings in a year

  • Statutory deductions (like NSSF and SHIF)

  • PAYE (Pay As You Earn) tax paid

  • Reliefs and allowable deductions

Employees use this form when filing their annual tax returns through the KRA iTax system. It provides a full summary of their income and tax details for a given year.

Why Was the P9 Format Updated?

The P9 format was updated to comply with the Finance Act 2024, which introduced new deductions and adjusted how some existing ones are handled. The main changes were:

  1. Affordable Housing Levy (AHL) is now an allowable deduction.

  2. SHIF contributions (which replaced NHIF) are also treated as allowable deductions.

These deductions are now made before PAYE is calculated, which affects how much tax an employee pays.

Key Changes in the New KRA P9 Format

Here are the specific updates included in the revised P9 form:

1. Inclusion of SHIF and AHL as Allowable Deductions

  • Previously, AHL and NHIF (now SHIF) were listed separately or not considered in PAYE computation.

  • In the new format, these are shown under a section titled "Allowable Deductions".

  • They reduce taxable income, meaning employees pay less PAYE.

2. New Section D – Allowable Deductions

This new section lists:

  • NSSF contributions (Tier I and Tier II)

  • SHIF contributions

  • Affordable Housing Levy

  • Other applicable deductions allowed by law

3. Adjusted PAYE Calculations

Because SHIF and AHL are now deducted before tax is calculated, the taxable pay shown on the P9 will be lower than the gross pay. This lowers the overall tax due.

Example: Old vs. New P9 Calculation

Let’s say an employee earns a gross salary of KSh 100,000 per month.

Old Format (Before Dec 2024):

  • Gross Salary: KSh 100,000

  • PAYE calculated on full KSh 100,000

  • AHL and NHIF deducted after PAYE

New Format (After Dec 2024):

  • Gross Salary: KSh 100,000

  • Less Allowable Deductions:

    • NSSF: KSh 2,160

    • SHIF: KSh 2,500

    • AHL: KSh 1,500

  • Taxable Income: KSh 93,840

  • PAYE is calculated on KSh 93,840, not the full KSh 100,000

This change results in lower income tax for the employee.

What Employees Need to Know

  • When filing 2024 returns in 2025, make sure your employer has issued the updated P9 format.

  • The new P9 form must show SHIF and AHL as allowable deductions.

  • Confirm that your PAYE is calculated on the correct taxable income.

What Employers Must Do

  • Update payroll systems to reflect the new deduction rules.

  • Generate P9 forms using the new KRA-approved template.

  • Ensure monthly payroll and annual returns comply with the Finance Act 2024.

  • Train HR and finance staff on the changes.

Why This Update Matters

If employers use the old P9 format:

  • Employees may be taxed more than necessary.

  • There may be issues when filing returns on iTax.

  • Companies could face penalties or audit queries from KRA.

Need Help with Payroll and P9 Compliance?

Keeping up with tax law updates doesn’t have to be a struggle. At FaidiHR, we provide reliable, compliant payroll solutions designed for Kenyan businesses.

Call: +254 702 339 699
Email: sales@faidihr.com

Let us help you generate correct P9 forms, automate payroll, and stay fully compliant with KRA and labor laws.