Turnover Tax (TOT) calculator for Kenyan small businesses

The standard rate is 1.5% of gross turnover, following the Finance Act 2023 (down from 3%, with the upper eligibility threshold also reduced from KSh 50 million to KSh 25 million). Tax rates change with each Finance Act, so confirm the current rate on iTax or with KRA before filing.

Turnover under KSh 1,000,000 a year is exempt from TOT. Turnover above KSh 25,000,000 no longer qualifies and must be taxed under the standard income tax regime instead. Rental income, employment income, management and professional fees, and income already subject to a final withholding tax are also excluded from TOT, regardless of turnover.

Sales, not profit. TOT is calculated on gross turnover with no deduction for stock, rent, salaries, or any other business expense. A business with thin margins can end up paying a similar TOT bill to one with fat margins, if their turnover is the same.

TOT returns and payment are due monthly, on or before the 20th of the month following the sales period, filed through iTax. Late filing attracts a penalty.

They apply to different situations and are generally not both charged on the same turnover. TOT is for smaller resident businesses within the KSh 1M-25M turnover band. VAT registration is compulsory once taxable turnover passes the VAT threshold, regardless of the TOT band. If you are close to either threshold, use LinkDuka's VAT calculator alongside this one and confirm your specific position with KRA or a tax advisor.

At the current 1.5% rate, TOT on KSh 150,000 of monthly turnover is KSh 2,250. Because the tax is on gross sales, that figure assumes no deductions for expenses. The calculator works out the same amount for any monthly or annual turnover and shows both the monthly liability and the estimated annual TOT.

Turnover above KSh 25,000,000 a year no longer qualifies for Turnover Tax, so the business moves to the standard income tax regime instead, and VAT may also apply depending on what is sold. The calculator flags this position and shows what TOT would have been, so you can see the difference between the two regimes.

Businesses with turnover under KSh 1,000,000 a year fall below the TOT band and are not required to register for Turnover Tax. The calculator marks this as below the threshold, though you may still need to file an annual return, so check your obligations on iTax before assuming nothing is due.

Yes. TOT is charged on gross turnover, and the calculator makes no distinction between cash, M-Pesa, bank transfers, or online orders - you enter total sales and the tax applies at the same rate to all of it. The only exclusions are income types specifically outside TOT, such as employment income and some rental or professional-fee income.

The calculator raises a VAT registration check when your projected annual turnover reaches KSh 5,000,000. If your supplies are taxable, VAT registration may also be required at that point, separate from the TOT band. Confirm the current VAT registration threshold and whether your goods are taxable with KRA before filing.