Win for Private Sector Employees as Tax-Free Per Diem Raised to 5% of Gross Income

Employees in the private sector are set to earn more through the payment of Per Diems following proposals by the Treasury to adjust the tax-free rate.

As highlighted by Treasury Cabinet Secretary Njunguna Ndung’u during the budget reading, Per Diem that was Ksh2,000  and below were not being taxed.

However, he acknowledged that many things had changed economically including inflation.

Therefore, as a way of cushioning employees, the tax-free rate was raised to 5 per cent of the gross income of the employee.

“Currently, the tax-free amount on subsistence allowance paid to employees in the private sector for a period spent outside the usual place of work while on official duties is capped at Ksh2,000 per day.