Definition and Purpose
_1.jpeg)
Under the Income Tax Act, insurance relief is given at 15% of qualifying premiums paid, capped at KES 5,000 per month (KES 60,000 per year). It applies to premiums on qualifying life, health and education policies and reduces the tax payable by salaried and self-employed taxpayers who file through iTax. If you are unsure of the exact section, treat it as a relief under the Income Tax Act and confirm the detail with KRA.
The relief is intended to encourage take-up of insurance cover by giving back part of the cost through the tax system. It applies to qualifying premiums for life, health and education cover, provided you keep receipts in case KRA asks to verify the claim.
- Encouraging take-up of life insurance and health insurance cover.
- Easing the cost of premiums for everyday taxpayers.
- Supporting financial planning through a fiscal incentive on qualifying cover.
You claim it on qualifying premiums for life, health or education policies from a registered insurer, provided you retain receipts. Note that SHIF, which replaced NHIF, is now deducted from taxable income under the Tax Laws (Amendment) Act 2024 and is not claimed here as a 15% insurance relief item.
Eligibility Criteria
Both salaried employees under PAYE and self-employed taxpayers can claim insurance relief if they pay qualifying premiums to a registered insurer. The relief is 15% of premiums, capped at KES 5,000 per month (KES 60,000 per year). File your annual return on iTax and confirm the current rules with KRA before claiming.
Where a double taxation treaty applies, residents may still be able to claim relief on qualifying policies, subject to the treaty terms. Verify your position through the iTax portal or with a tax adviser to avoid disputes.
In practice, gather premium receipts from your insurer and submit them when you file. Organise the documents early so you can support the relief within the cap.
A common error is treating non-qualifying payments as insurance relief. Focus on qualifying life, health and education cover from a registered insurer, and remember SHIF is handled separately as a deduction from taxable income.
Taxpayer Requirements
Salaried employees can have the relief reflected through PAYE where the employer captures it; self-employed taxpayers claim it on the annual return by 30 June with premium proof. Use the iTax portal and keep all receipts in case of a KRA review.
The table below outlines the key requirements for different taxpayer types.
| Taxpayer type | Requirements | Deadline | Common issue |
|---|---|---|---|
| PAYE employee | P9A from employer | Reflected through payroll | Missing insurer details |
| Self-employed | iTax return plus receipts | 30 June | PIN mismatch |
| Pensioner | Return with premium proof | 30 June | Confusing SHIF with insurance relief |
If you are unsure, contact KRA through the official helpline or iTax. Salaried employees should check their P9A for any relief already captured. Verify insurer details early so the claim is not delayed.
Qualifying Insurance Policies
Qualifying policies are life, health and education cover from a registered insurer. SHIF contributions do not count toward this relief, because SHIF is deducted from taxable income separately. Where you hold cover through a group scheme, only your personal portion of the premium qualifies.
Qualifying types include:
- Life insurance policies.
- Health insurance policies.
- Education policies for dependants.
Premiums on non-life cover such as motor or property insurance do not qualify. Verify your policy and insurer details before claiming, and keep renewal records so eligibility is clear. This relief supports financial planning by giving back 15% of qualifying premiums, within the monthly cap.
Types of Insurance Relief
_2.jpeg)
The relief covers life cover and health or medical cover, as well as qualifying education policies. There is no separate cap by policy type. The 15% rate applies to combined qualifying premiums, with the relief itself capped at KES 5,000 per month (KES 60,000 per year).
Where cover comes through an employer group scheme, relief applies only to your personal contribution. The relief reduces the tax payable for salaried employees through PAYE and for self-employed taxpayers through the annual return on iTax.
Keep receipts for audit purposes when you submit your return. Combining life, health and education premiums sensibly helps you make full use of the relief up to the cap.
Life Insurance Relief
Life cover such as whole-life, endowment and education-linked policies from a registered insurer qualifies for relief at 15% of premiums, within the overall cap. Pay premiums in a way you can document, for example by traceable transfer, so the figures are easy to support in your tax computation.
For example, premiums of KES 4,000 a month, or KES 48,000 a year, give relief of 15%, which is KES 600 a month or KES 7,200 a year. Salaried employees may see this reflected in PAYE; self-employed taxpayers claim it on the annual return. Keep insurer receipts for KRA.
Renew on time to avoid a lapse, and keep the relief within the monthly cap of KES 5,000.
Health Insurance Relief
Health cover from a registered insurer qualifies, but mandatory SHIF contributions do not, because SHIF is deducted from taxable income separately. Focus on voluntary private health policies when working out your insurance relief.
The example below shows how the 15% relief is computed on sample annual premiums. The relief figures are 15% of premiums, subject to the overall monthly cap of KES 5,000 (KES 60,000 per year).
| Annual premium | Relief at 15% |
|---|---|
| KES 24,000 | KES 3,600 |
| KES 36,000 | KES 5,400 |
| KES 60,000 | KES 9,000 |
Note that relief is capped at KES 5,000 per month, so where 15% of annual premiums exceeds KES 60,000 a year the relief is limited to that ceiling. Claim by entering qualifying premiums on iTax. Group employer plans qualify on your personal portion only.
Relief Calculation Method
The relief is 15% of qualifying premiums paid in the year, with the relief itself capped at KES 5,000 per month (KES 60,000 per year). This is set out in the Income Tax Act. It applies to qualifying premiums on life, health and education cover for the year of income. Confirm the current cap with KRA.
To claim, salaried employees may see the relief through PAYE where the employer captures it on the P9A; self-employed taxpayers enter it on the annual return on the iTax portal. The portal provides a field under reliefs where you input total qualifying premiums paid, supported by receipts from your insurer.
For a policy held for only part of the year, base the relief on the premiums actually paid in that year. For example, a policy starting in October means you claim on the premiums paid from October onward. This keeps the claim accurate and avoids issues on review.
After you enter the figures, iTax shows a summary of premiums and the relief applied. Log in, select returns, and keep scanned receipts for verification.
Annual Limit and Rate
_3.jpeg)
The relief is 15% of qualifying premiums, capped at KES 5,000 per month, which is KES 60,000 per year. The cap is on the relief itself, not on the premiums you may pay. Confirm the current figure on the KRA iTax portal.
Follow these steps to calculate: first, total your qualifying premiums for the year. Second, multiply by 15%. Third, limit the result to the cap of KES 60,000 per year (KES 5,000 per month). The relief is then set against your tax.
| Premium paid (year) | Relief at 15% | Relief after cap |
|---|---|---|
| KES 20,000 | KES 3,000 | KES 3,000 |
| KES 40,000 | KES 6,000 | KES 6,000 |
| KES 500,000 | KES 75,000 | KES 60,000 (capped) |
For example, a taxpayer paying KES 40,000 in qualifying premiums claims relief of KES 6,000 for the year. A taxpayer with very high premiums has the relief limited to KES 60,000 a year. The relief reduces tax payable, so confirm the current cap before filing.
Claiming the Relief
File on iTax by 30 June with insurer receipts showing your details and the policy number. Salaried employees may have the relief captured by the employer on the P9A, while self-employed taxpayers enter it on the annual return.
The process is: log into iTax, select the relief under reliefs, and enter your qualifying premiums. For PAYE employees, the employer's P9A feeds into the pre-filled return. Self-employed taxpayers enter premium details alongside their return.
KRA reviews claims for qualifying premiums from registered insurers. Approval reduces your tax or feeds into any refund due. File early to avoid peak-season delays.
A common issue is mismatched details on receipts, which can delay the claim. A correct claim reduces your tax within the cap of KES 5,000 per month.
Documentation Needed
You need official receipts from a registered insurer showing your name and PIN, the policy number, the premium amount and the payment date. Gather these for qualifying life, health or education cover. Keep originals safe in case KRA requests them on review.
Upload files in PDF or JPG format within the portal size limits. Missing details on documents can trigger a query, so check them first. Self-employed taxpayers pair these with their income records for the return.
| Document | Details | Issued by |
|---|---|---|
| Premium receipt | Name, PIN, amount, date | Insurer |
| Policy schedule | Coverage details | Insurer |
| P9A certificate | PAYE summary | Employer |
| iTax acknowledgement | Filing proof | KRA |
For example, a health policy receipt should list your PIN and the premium paid. Salaried employees attach the P9A for verification. Keep all records in case of a query or appeal.
Common Pitfalls and Tips
Claims are often delayed or rejected because of confusion over what qualifies or missing insurer details. Understanding the rules helps secure your relief on qualifying premiums. Confirm anything you are unsure about with KRA.
Private health cover qualifies, but SHIF does not count, because SHIF is deducted from taxable income separately. Taxpayers often mix the two, which leads to errors. Claim only qualifying life, health and education premiums.
File by 30 June to avoid late-filing penalties, and verify your insurer's details before claiming. Use the iTax pre-filled return where available to reduce mistakes.
- Including SHIF: SHIF is not part of insurance relief. Claim only qualifying private policies, as SHIF is deducted from taxable income.
- Missing insurer details: claims can fail without correct insurer information. Verify it before filing.
- Late filing: returns after 30 June can attract penalties. File on time on iTax.
- Group policy full amount: claim only your personal portion of a group premium.
- No receipts: keep original receipts from the insurer as proof.
Keeping clear records and claiming only qualifying premiums, within the KES 5,000 per month cap, gives you the best chance of a smooth claim under the Income Tax Act.
Frequently Asked Questions
_4.jpeg)
What is insurance relief for Kenyan taxpayers?
Insurance relief is a relief under the Income Tax Act that gives back 15% of qualifying premiums paid on life, health and education policies, reducing your tax. The relief is capped at KES 5,000 per month (KES 60,000 per year). Confirm the current cap with KRA.
Who qualifies for insurance relief in Kenya?
Taxpayers who pay qualifying premiums to a registered insurer qualify, whether they earn employment or business income and file their annual return via iTax. The policies must be qualifying life, health or education cover, and the relief is limited to the monthly cap.
How is the insurance relief amount calculated?
The relief is 15% of qualifying premiums paid in the year, limited to KES 5,000 per month, which is KES 60,000 per year. You claim it when filing by entering your premium details on iTax. The cap is on the relief itself, not on the premiums you may pay.
What types of insurance policies are eligible for relief?
Eligible policies are life insurance, health or medical insurance, and education policies for dependants. Premiums on non-life cover such as motor or property insurance do not qualify. There is no separate higher cap for education policies; the single cap of KES 5,000 per month applies to qualifying premiums together.
How do Kenyan taxpayers claim insurance relief?
Log into the KRA iTax portal, open your return for the relevant year, enter your qualifying premium details under the reliefs section, and submit. Keep premium receipts in case KRA asks to verify the claim.
Is SHIF part of insurance relief?
No. SHIF replaced NHIF on 1 October 2024 and is deducted from taxable income under the Tax Laws (Amendment) Act 2024. It is not claimed as a 15% insurance relief. Insurance relief applies only to qualifying private life, health and education premiums, within the monthly cap.