Car Benefit Tax Calculator (Kenya)
Calculate the monthly taxable value of an employer-provided vehicle (2% of vehicle purchase cost).
How KRA Values a Company Car Benefit
When an employer provides a company car for personal use, KRA treats it as a non-cash benefit and taxes it through PAYE. The monthly taxable value is 2% of the vehicle's initial cost. This amount is added to your taxable income, so it increases your tax bill but does not change your cash salary, since no cash changes hands.
Car benefit tax example
| Initial cost of the car | KES 3,000,000 |
| Monthly taxable benefit (2%) | KES 60,000 |
| Annual taxable benefit | KES 720,000 |
| Extra PAYE a month at the 30% band | about KES 18,000 |
Car benefit questions
How is the car benefit calculated in Kenya?
For a car the employer owns, the monthly taxable benefit is 2% of the vehicle's initial cost, including VAT. A KES 3,000,000 car gives a taxable benefit of KES 60,000 a month, which is added to your salary when PAYE is worked out.
How much extra tax will I pay on a company car?
It depends on your PAYE band. If your salary already puts you in the 30% band, a KES 60,000 monthly benefit adds about KES 18,000 a month in PAYE. Enter the car's cost above to see the taxable value for your car.
Does a company car increase my take-home pay?
No. A company car is a non-cash benefit. It raises your taxable income, and therefore your PAYE, but doesn't add any cash to your salary.
This calculator gives an estimate for guidance only and is not tax advice — confirm final figures with KRA or a licensed tax advisor.