KRA just sent that iTax notification and your stomach sank? We get it. That end-of-month hustle in Nairobi, Mombasa, or Kisumu feels harder when a chunk of your pay goes straight to taxes. But what if you’re paying more than you should?
Many Kenyans miss out on legal ways to reduce their tax bill. This isn’t about dodging KRA. It’s about using the deductions and reliefs the government itself offers. This guide breaks down the top 5 tax deductions and reliefs available to Kenyan taxpayers in 2025. Simple, direct, and ready to use.
1. Personal Relief: Your Automatic KES 2,400 Monthly Lifeline
This is the most basic one, and everyone with a KRA PIN gets it. Think of it as the government saying, “We know you need some money just to live.” Personal Relief is a fixed monthly deduction from your taxable income.
For 2025, the rate is KES 2,400 per month, or KES 28,800 per year. It’s applied automatically by your employer’s payroll system or when you file your returns. You don’t need receipts or to apply for it. But you must confirm it’s on your payslip. If you’re filing your own returns, ensure this figure is included in your calculations.
Local Tip: If you’re a freelancer or run a small business in places like Nairobi’s CBD or Mombasa’s Old Town, don’t forget to claim this relief when you do your annual tax return on the iTax portal. It’s your right, and it directly lowers the tax you owe.
How to Claim It
For employees, it’s automatic. For the self-employed, log into iTax, go to the return filing section, and ensure the personal relief amount is pre-filled or entered. If it’s missing, you’re literally giving KRA free money.
2. Mortgage Relief: For Those Hustling for a Home
Buying a house in Kenya is a major dream. The government offers a tax incentive to help you get there. If you took a mortgage from a Kenyan bank or SACCO to buy your first home, you can claim relief on the interest you pay.
The relief is 15% of the total interest paid in a year, up to a maximum of KES 300,000. So, if you paid KES 500,000 in mortgage interest to your bank, your relief is 15% of that (KES 75,000). This amount is deducted from your taxable income.
Kenyan Context: This applies to loans from institutions like KCB, Equity, Co-op Bank, or even your housing SACCO. The property must be in Kenya and registered in your name. It’s a solid reason to keep all those bank statements and loan repayment schedules from your lender.
3. Retirement Contribution Relief: Pay Your Future Self, Not Just KRA
This is a powerful one. Every shilling you voluntarily contribute to a registered retirement scheme is deducted from your income before tax is calculated. It covers your NSSF contributions, company pension schemes, and personal retirement plans with providers like ICEA, Britam, or Old Mutual.
The limit is the lower of 30% of your pensionable income or KES 20,000 per month (KES 240,000 per year). So, if you earn KES 100,000 and put KES 15,000 into your pension, your taxable income drops to KES 85,000 for that calculation.
Practical Advice: Increase your voluntary pension contribution by even KES 5,000 a month. You’ll save on immediate tax, and that money grows for your future. It’s smarter than letting KRA take it now.
4. Insurance Relief: Cover Yourself and Save
Got an NHIF card? Have a life insurance policy? You’re likely eligible for relief. This covers premiums paid for:
- NHIF contributions
- Life insurance (for you, your spouse, or children)
- Education policies (like those for your child’s school fees)
- Health insurance
The relief is 15% of the premium paid, capped at KES 60,000 per year. So if your NHIF is KES 500 and you pay KES 3,000 for life insurance monthly, your total annual premium is KES 42,000. Your relief is 15% of that: KES 6,300 off your taxable income.
Local Supplier Note: Ensure your insurer is licensed by IRA (Insurance Regulatory Authority). Policies from companies like Jubilee, APA, or Madison are eligible. Keep your payment receipts or bank slips as proof.
5. Owner-Occupier Interest: Relief for the “Mkopo wa Nyumba” Hustle
This is different from Mortgage Relief and is specifically for landlords. If you took a loan to build or buy a rental property, the interest on that loan is a deductible expense against the rental income you earn.
Let’s say your rental property in Kitengela or Thika brings in KES 200,000 a year. You pay KES 40,000 in loan interest to the bank for that property. You can deduct that KES 40,000 from the rental income, so you only pay tax on KES 160,000.
Expert Knowledge: This deduction is claimed when you file your rental income tax return. You must have proper documentation from your bank showing the loan is specifically for that property. Mixing personal and property loans will cause issues with KRA during an audit.
Navigating iTax Like a Pro: A Kenyan’s Practical Guide
Knowing the reliefs is one thing. Claiming them is another. This is where many people get stuck dealing with the iTax portal, especially during the mad rush just before the June 30th deadline.
First, gather your documents. For Mortgage Relief, you need your annual interest certificate from your bank (not just statements). For insurance, have your premium payment summaries. Scan these clearly with your phone—apps like Adobe Scan work great. Save them as PDFs with clear names like “Jubilee_Life_Premium_2025.pdf”.
Kenya-Specific iTax Hack: Don’t wait until the long rains in April/May when the internet might be spotty, or until the last week of June when the iTax portal often slows down or crashes due to high traffic. File early, during the dry season months of January or February. It’s less stressful and gives you time to correct any errors.
If you get confused, the KRA has Taxpayer Service Centres. The one at Times Tower in Nairobi is the main hub, but there are smaller ones in major towns. You can also visit your local Huduma Centre for assistance. Going in person with your documents can sometimes solve issues faster than endless emails.
Conclusion
Your hard-earned money should work for you, not just for the taxman. These top 5 tax deductions and reliefs available to Kenyan taxpayers in 2025 are legal tools designed to put more cash back in your pocket. From the automatic Personal Relief to strategic moves with your pension and mortgage, each one is a step towards smarter financial health.
Start now. Dig out your latest payslip, find your insurance certificates, and log into your iTax profile. Review what you’re already claiming and see where you can add more. A few hours of organizing could save you thousands of shillings this year.
What’s your biggest challenge with filing taxes? Share your experience in the comments below—let’s help each other navigate the KRA hustle.