Kenya Turnover Tax (TOT) Calculator

Turnover tax (TOT) is a simplified tax under section 12C of the Income Tax Act (Cap 470) for micro, small and medium enterprises. It applies where your annual gross turnover is more than KES 1,000,000 and not more than KES 25,000,000. Businesses within that band pay TOT instead of computing income tax on net profit.

TOT is charged at 3% of gross monthly sales. The Finance Act 2023 raised the rate from the previous 1% to 3% and, at the same time, cut the upper turnover ceiling from KES 50,000,000 to KES 25,000,000.

No. TOT is charged on gross sales/turnover with no expense deductions at all. That is the trade-off for the simplified regime — you pay 3% of what you take in, regardless of your costs or margins. If your expenses are high, the standard income tax regime may work out cheaper.

Once annual gross turnover passes KES 25,000,000 you can no longer use turnover tax. The business moves to the standard regime — corporation tax at 30% (or graduated individual income tax for sole proprietors) on net profit — and must register for VAT once taxable supplies pass KES 5,000,000.

TOT is filed and paid monthly through iTax by the 20th of the month following the sales month. For example, January's turnover tax is due by 20 February. Even in a month with no sales, a nil return is required.

TOT excludes rental income, management, professional or training fees, and any income that is already subject to final withholding tax. Those amounts are taxed under their own rules and are not part of the gross sales figure on which TOT is charged.