What is Withholding Tax and how do you reclaim it?

## What is Withholding Tax (WHT)?

Withholding Tax (WHT) is a tax deducted at source — meaning the person paying you deducts tax from your payment before it reaches you.

When a registered company pays you for professional services (consulting, design, legal advice, software development), they are required by KRA to deduct 5% WHT from your invoice and remit it to KRA on your behalf.

Example: You invoice a company KES 100,000 for consulting services. They deduct 5% WHT = KES 5,000. You receive KES 95,000. They give you a WHT certificate for KES 5,000.

WHT rates for common payment types

Who deducts WHT?

The payer (the company paying you) is responsible for deducting and remitting WHT. This is not your obligation to calculate — it is theirs. Your obligation is to:

Declare the gross income in your annual income tax return

Attach your WHT certificates to claim the deduction

How to reclaim WHT

WHT is a prepayment of your income tax — not a final tax (unlike dividends WHT which is final).

When you file your annual income tax return (due 30 June each year), you:

Declare your total professional income for the year

Calculate your total income tax liability

Deduct total WHT paid (from your certificates) from the liability

Pay the difference (or receive a refund if WHT exceeded liability)

Practical example:

Annual professional income: KES 1,200,000

Annual income tax liability: ~KES 252,000 (after personal relief)

Total WHT deducted by clients: KES 60,000

Tax you pay on filing: KES 252,000 – KES 60,000 = KES 192,000

Keeping WHT certificates

Request a WHT certificate (sometimes called a withholding tax certificate or deduction certificate) from every client who deducts WHT. You need these for:

Claiming the deduction in your annual return

Responding to KRA queries

If a client fails to deduct WHT or fails to give you a certificate, follow up — you may still need to declare the gross income and pay the tax yourself.