The Kenya Revenue Authority (KRA) has announced a significant overhaul of the Pay As You Earn (PAYE) filing process, introducing a simplified system expected to take effect from July 1, 2025.

This change follows consistent feedback from employers across various sectors seeking a more streamlined and accessible tax compliance experience.

The redesigned framework, presented in the form of a simplified Excel-based PAYE return, is tailored to enhance usability for employers in both public and private organisations, as well as not-for-profit institutions.

According to KRA, the revised process allows employers to submit returns aligned with their unique employee categories, making the system more adaptable to organisational needs.

“The simplified PAYE return aims to improve the user experience for all, including the public, not-for-profit and private sector,” the tax authority noted in a public statement issued on June 23, 2025.

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Beyond enhancing the return structure, KRA says the new approach leverages modern integration tools to interlink with various government platforms.

The system connects directly with the Government Human Resource Information System, Integrated Financial Management Information System (IFMIS), and the Central Bank of Kenya (CBK) through Application Programming Interface (API) integrations.

According to  KRA, this enables smoother processing not only for PAYE but also for statutory deductions such as the Affordable Housing Levy and NITA Levy, as well as other labour-related contributions.

KRA advised employers to immediately begin adjusting their payroll procedures to meet the new requirements, using the downloadable resources available on its official website.

“Employers should access and use the simplified Excel PAYE return and sample CSVs from the KRA Website: link https://www.kra.go.ke/publications, to align their payroll processes,” it stated.

The authority reiterated that the transition to the simplified return format is not optional, confirming that, “the full roll out to file using simplified Excel PAYE return will be effective from July 1, 2025.”

This latest initiative underscores KRA’s ongoing efforts to digitise and modernise its services, part of a broader agenda to improve compliance, reduce administrative burdens, and build greater public trust in the country’s tax systems.

For further guidance, employers are urged to consult the official publications section of the KRA website or seek support from authorised tax professionals.

By simplifying the PAYE filing process and integrating it with key government systems, KRA aims to make tax compliance less cumbersome and more transparent.

As the July deadline nears, the success of the new system will largely depend on how swiftly and effectively employers adapt their payroll processes to the updated requirements.