Employers across the country have until July 1, 2025, to switch to the Kenya Revenue Authority’s new simplified PAYE return filing system, which introduces an Excel-based template aimed at easing the tax process.

The new format is expected to replace the current method and is part of KRA’s push to improve compliance and user experience across all sectors.

“Kenya Revenue Authority (KRA) has simplified the PAYE return filing and payment process to align with the simplified return from taxpayers to improve the user experience for all, including the public, non-profit, and private sectors,” the agency said through its official X account on June 23, 2025.

Simple template, smoother filing

The new Excel-based PAYE return template has been released under the theme “KRA Simplifies the PAYE Return Filing Process.”

It is designed to support public, private, and non-profit employers by streamlining how deductions and remittances are handled.

The simplified return system is also built to connect with government platforms like the Integrated Management Information System (iMIS) and the Central Bank of Kenya using API technology.

This will enable automatic processing of statutory contributions such as the Affordable Housing Levy, NITA Levy, and other mandatory PAYE-related deductions based on employee categories.

Transition deadline set for July

KRA has made the new Excel template and a sample CSV file available on its website under the publications section to guide employers.

Businesses are being urged to review and update their payroll systems immediately ahead of the July 1 deadline to avoid penalties.

The simplified system comes after long-standing demands for reform, going back to 2020, and follows the success of other digital tools like the Electronic Tax Invoice Management System (eTIMS), which reduced VAT fraud by 15 percent in 2023.

This latest move also supports the National Tax Policy launched in 2022 and is part of efforts to bridge the country’s 6 percent GDP revenue gap.

It complements other recent government digital solutions, such as GAVA Connect, a platform introduced in 2024 to help developers build public service applications.

The public notice, signed by the Commissioner for the Micro and Small Taxpayers Department, highlights KRA’s continued effort to offer sector-specific and technology-driven systems to improve tax filing and ease of doing business.

Employers have been urged to act quickly and adopt the new system in time to ensure a smooth and penalty-free transition.