Title Most employers had already closed their April payrolls using the old PAYE rates by the time the new tax relief measures came into effect. What is the effective date of the new rates and what is the way forward for such employers?
Description

PAYE is a monthly tax which is accounted for on a calendar month basis. Due date for April taxes is 9th May. Since, the new rates of PAYE tax came into force before end of the calendar month, the applicable rates for April Payroll is the new rate and not the old.


In respect of employers who had closed their payroll and had applied old PAYE rates, they can either:


revise their payrolls to take into account the new rates and refund taxes over deducted to staff as they have not remitted deducted PAYE to KRA or


recover the over deducted PAYE in the month of May payroll (PAYE payable to KRA) to refund their staff.
Category Tax Laws (Amendment) Act 2020