You just got paid for that big design project or completed a month of Uber trips. The money hits your M-Pesa, and life is good. But then you remember… what about KRA? Filing tax returns as a freelancer or gig worker in Kenya feels confusing, but ignoring it is not an option.
This guide cuts through the jargon and shows you exactly what to do, step-by-step. We’ll cover iTax registration, what income to declare, and how to avoid penalties. Let’s get your taxes sorted, so you can focus on your hustle.
Why Freelancers in Kenya Can’t Ignore KRA
Thinking KRA won’t find you? Think again. The government is tightening the net. With the new Digital Service Tax and platforms sharing data, it’s a matter of time.
Filing returns isn’t just about compliance; it’s your financial passport. Need a loan for a car or to rent a better apartment in Kilimani? Banks will ask for your tax compliance certificate (TCC). No filed returns, no TCC. It’s that simple.
The Real Consequences of Not Filing
Beyond the TCC, penalties are steep. KRA charges a minimum penalty of Ksh 10,000 for late filing or non-filing. Plus, interest on any unpaid tax.
They can also enforce collection by instructing your bank or mobile wallet providers to remit funds directly to them. It’s better to be in control.
Step 1: Get Your KRA PIN and Register on iTax
If you don’t have a KRA PIN, stop everything and get one. You can register online via the iTax portal or visit a KRA Huduma Centre. For freelancers, you’ll need a “Personal” PIN.
Once you have your PIN, log into iTax. The interface can be intimidating, but just focus on the menu. You need to register for two key taxes: Income Tax and potentially the Digital Service Tax if you earn through apps.
Pro Tip for iTax Navigation
The site works best on a laptop or desktop browser. If you’re on mobile, use the “Desktop site” option in your browser settings. Also, have your KRA PIN and ID scanned and ready for uploads.
Save the iTax support number (+254 20 4 999 999) in your phone. Be patient, the queues can be long, especially near the June 30th deadline.
Step 2: What Income to Declare as a Freelancer
This is where many get stuck. You must declare all your income. This includes money from:
- Direct client payments (local and international)
- Platforms like Upwork, Fiverr, or Guru
- Gig work (Uber, Bolt, Glovo, Lynk deliveries)
- Rental income (if you sublet your apartment)
- Any other side hustle paying into your bank or M-Pesa
Convert all foreign income to Kenyan Shillings using the CBK exchange rate on the date you received it. Keep records of these conversions.
Step 3: Claiming Allowable Deductions (Reduce Your Tax)
This is the good part! You don’t pay tax on your gross income. You can subtract business expenses. Keep receipts (even photos on your phone).
Common deductions for freelancers in Kenya include:
- Home Office Costs: A percentage of your rent, Wi-Fi (like Zuku or Safaricom Home Fibre), and electricity bills.
- Equipment & Software: Laptop, phone, design software subscriptions, project management tools.
- Transport: Fuel if you use your car for work, or boda boda/matatu fares for client meetings.
- Marketing: Costs for running Facebook/Instagram ads for your services.
The Kenyan-Specific Realities: M-Pesa, Deadlines & Agents
Let’s get local. Filing tax returns as a freelancer in Kenya has its own flavour. First, the deadline is June 30th every year. Mark it in your calendar right after you remember the short rains in October.
Paying is easy via iTax using M-Pesa Paybill number 572572. The challenge is knowing what to pay. If your annual taxable income is below Ksh 288,000, you likely fall in the “personal relief” bracket and may owe nothing, but you MUST still file.
Many freelancers, especially creatives in Nairobi’s vibrant hubs like Adams Arcade or along Ngong Road, use tax agents. A good agent can save you headaches for about Ksh 2,000 to Ksh 5,000 per filing. Ask for recommendations in your professional WhatsApp groups.
Remember, if you’re a digital content creator earning via YouTube or TikTok, that income is taxable here. KRA is watching. Be smart, be compliant, and sleep peacefully.
Step 4: Filing the Return on iTax – A Walkthrough
Log in, go to the ‘Returns’ menu, and select ‘File Return’. Choose the year (e.g., 2024) and the form ‘ITR for Resident Individual’.
You’ll fill in your income details under ‘Employment Income’ (even as a freelancer, use this for your total business income) and claim your deductions under the ‘Allowable Deductions’ section. Take your time.
Double-check all figures before submitting. Once submitted, you can’t edit. The system will calculate if you owe tax or are due a refund.
What Happens After You File?
If you owe tax, pay immediately via the iTax system to avoid interest. You’ll then download your receipt and your ITR acknowledgment slip.
If you don’t owe, you’re done for the year. Your compliance status updates automatically, and you can download your TCC a few days later if needed.
Common Pitfalls and How to Avoid Them
Pitfall 1: Mixing personal and business M-Pesa. Open a separate mobile money line (like Safaricom’s Business Line) or use a business Till number to track income cleanly.
Pitfall 2: Forgetting to file because you had no “employment.” Filing is mandatory for every PIN holder with an income, employed or not.
Pitfall 3: Not keeping records. Use a simple spreadsheet or a local app like 1Money to log every payment and expense weekly. When June comes, you’re ready.
Your Freelancer Tax Toolkit for Kenya
Get organised with these tools:
- Record Keeping: Google Sheets (free) or a dedicated notebook. File your M-Pesa statements monthly.
- Professional Help: For complex cases, find a certified public accountant (CPA) in your town. Ask for their rates upfront.
- KRA Resources: Follow KRA’s official social media for deadline reminders. Their YouTube channel has tutorial videos.
Wrapping Up: Your Financial Freedom Starts Here
Filing your tax returns as a freelancer or gig worker in Kenya is a non-negotiable part of the professional journey. It legitimizes your hustle, builds your financial profile, and keeps you on the right side of the law. The process, once you break it down on iTax, is straightforward. Register, track your income and expenses, file by June 30th, and claim every deduction you’re entitled to. Treat it like a crucial business task—because it is.
Get it done now, don’t wait for the last-week rush. Then, go ahead and enjoy that hard-earned cash with peace of mind. Got a specific question about your freelance taxes? Drop it in the comments below—let’s help each other grow.