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Mr. Kimutai a teacher from Tuiyotich Secondary School earns K₤ 12000 per annum and lives in a house provided by the employer at a minimum rent of Ksh.2000 per month. He gets a family relief of K₤ 1320p.a. and is entitled to a relief of 10% of his insurance of K₤ 800p.a.

  1. Calculate his annual tax bill based on the table below. 
    Income slab in K₤ p.a.              Rate
       1 – 2100                               10%
    2101 – 4200                            15%
    4201 – 6300                            25%
    6301 – 8400                            35%
      Over 8400                              45%
  2. Kimutai other deductions include.
    • W.C.P.S = sh 600.00pm
    • NHIF = sh 500.00pm
      Calculate Kimutai’s net salary monthly.

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  1.  
     Income slab in K₤ p.a.  Rate  Tax in ₤ 
     1 – 2100  10%  210
     2101 – 4200      15%  315
     4201 – 6300    25%  523
     6301 – 8400  35%  735
     Over 8400(12600−8400−4200)
     Gross tax.
     45% 1890
     3675
    Taxable Income = 12000 + 15% of 12000 − rent
    115 × 2000 − 1200
    100
    =₤12,600 p.a 
    Net tax = 3675 − 1320 − 80
    = ₤2275
  2. Net salary p.a = 12600 − (₤2275 + 360 + 300)
    =₤9665 p.a
    9665 × 20 
            12
    =Sh. 16,108

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