What expenses can you deduct as a freelancer?

## The principle of tax deductibility

For an expense to be deductible from your taxable income in Kenya, it must be:

Incurred wholly and exclusively in the production of income

Not capital in nature (capital items are claimed through depreciation)

Supported by documentation (receipts, invoices, bank statements)

Fully deductible expenses

These can be deducted 100% from your taxable income:

Staff salaries and wages (including casual workers)

Rent for business premises (office, studio, workshop)

Utilities for business (electricity, water, internet — if business-only)

Business insurance premiums (professional indemnity, office insurance)

Professional fees (accountant, lawyer, business consultant)

Marketing and advertising (website, ads, business cards, branding)

Business travel (transport, accommodation — must be business purpose)

Stationery and office supplies

Bank charges on business accounts

Software subscriptions (if business tools — design software, accounting software)

Partially deductible expenses

These can only be partially deducted:

Vehicle expenses — only the business-use portion. If you use your car 60% for business and 40% personal, only 60% is deductible. Keep a mileage log.

Meals and entertainment — 50% deductible if for genuine business purposes (client lunch, staff team dinner). 0% if personal.

Home office — proportional to the space used. If your home is 100 sqm and your office is 15 sqm, you can deduct 15% of rent, utilities, and internet.

Mobile phone — business proportion only. Estimate your business vs personal usage and claim accordingly.

Not deductible

Personal living expenses (food, personal clothing, personal rent)

Income tax payments

Fines and penalties (including KRA late filing penalties)

Capital expenditure — claim via depreciation instead

Personal clothing (unless it is a uniform or PPE)

Capital allowances (depreciation)

Capital items (laptops, cameras, equipment, furniture) are not deducted in full in the year of purchase. Instead, you claim a capital allowance:

Documentation requirements

KRA can ask for supporting documentation for any deduction you claim. Keep:

Receipts and invoices (physical or digital)

Bank statements showing the transaction

Contracts or agreements where relevant

Mileage log for vehicle claims

Keep records for at least 5 years after the relevant tax return.