KRA Turnover Tax (TOT) Top Calculator 2025
Calculate your 3% Turnover Tax (TOT) for small businesses with annual turnover between KES 1 Million and KES 50 Million. Updated for Finance Act 2023.
What is Turnover Tax (TOT)?
Turnover Tax is a simplified tax system for small businesses in Kenya with annual gross sales between KES 1,000,000 and KES 50,000,000. Introduced by the Finance Act 2023, it replaced the former Presumptive Tax regime. The tax rate is a flat 3% of gross turnover, payable monthly by the 20th of the following month via iTax.
Calculate Your Turnover Tax
Enter your total annual gross sales/revenue before expenses
Turnover Tax Examples for Common Kenyan Businesses
See how much different businesses pay in Turnover Tax based on their annual gross sales. These examples help you estimate your TOT liability before calculating.
| Business Type | Annual Turnover | Annual TOT (3%) | Monthly TOT |
|---|---|---|---|
| Retail Shop (Duka) | KES 2,400,000 | KES 72,000 | KES 6,000 |
| Salon/Barbershop | KES 1,800,000 | KES 54,000 | KES 4,500 |
| Restaurant/Cafe | KES 6,000,000 | KES 180,000 | KES 15,000 |
| Hardware Store | KES 12,000,000 | KES 360,000 | KES 30,000 |
| Wholesale Business | KES 36,000,000 | KES 1,080,000 | KES 90,000 |
| Professional Services | KES 4,800,000 | KES 144,000 | KES 12,000 |
Note: These are illustrative examples. Your actual TOT depends on your business's actual gross turnover. Use the calculator above for your specific situation.
Who Qualifies for Turnover Tax in Kenya?
Eligible Businesses
- Resident persons (individuals & companies)
- Annual turnover KES 1,000,000 to KES 50,000,000
- Sole proprietors, partnerships, companies
- Retail shops (dukas), salons, restaurants
- Service providers, contractors, freelancers
- Mama mboga, hawkers with high turnover
NOT Eligible for TOT
- Businesses with turnover above KES 50M
- Incorporated companies under Companies Act
- Professionals (lawyers, doctors, accountants)
- Management & consultancy services
- Rental income earners (use Rental Tax Calculator)
- Employment income (use PAYE Calculator)
How to File and Pay Turnover Tax on iTax
Follow these steps to register, file, and pay your Turnover Tax through the KRA iTax portal.
Register for TOT
Log into iTax, go to Registration, select "Amend PIN" and add Turnover Tax obligation
File Monthly Return
Go to Returns > File Returns > Turnover Tax. Enter your monthly gross sales
Generate Payment Slip
After filing, generate an e-Slip for payment via M-Pesa Paybill 572572
Pay by 20th
Pay via M-Pesa (Paybill 572572) or bank by the 20th of the following month
M-Pesa Payment Steps
- Go to M-Pesa > Lipa na M-Pesa > Pay Bill
- Enter Business Number: 572572
- Account Number: Your KRA PIN
- Enter the exact amount from your e-Slip
- Enter M-Pesa PIN and confirm
Turnover Tax vs Other Tax Options in Kenya
Compare Turnover Tax with other tax regimes to understand which is best for your business.
| Feature | Turnover Tax (TOT) | Corporate Tax | Individual Tax (PAYE) |
|---|---|---|---|
| Tax Rate | 3% of Turnover | 30% of Profits | 10% - 35% Progressive |
| Threshold | KES 1M - 50M | No limit | Any income |
| Tax Base | Gross Sales | Net Profits | Taxable Income |
| Filing Frequency | Monthly | Annual + Installments | Monthly (by employer) |
| Record Keeping | Simple | Complex | Via P9 Form |
| Expense Deductions | Not Allowed | Allowed | Limited (pension, etc.) |
| Best For | Small businesses, low margins | Large companies, high expenses | Employed individuals |
Related KRA Tax Calculators
Explore other tax calculators for comprehensive tax planning in Kenya.
VAT Calculator
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PAYE Calculator
Calculate income tax for employed individuals
Rental Tax Calculator
Calculate rental income tax for landlords
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Frequently Asked Questions (FAQ) - Turnover Tax Kenya
What is the current Turnover Tax rate in Kenya 2025?▼
The current Turnover Tax (TOT) rate in Kenya is 3% of gross turnover. This rate was introduced by the Finance Act 2022 and applies to businesses with annual gross sales between KES 1,000,000 and KES 50,000,000.
Previously, under the Presumptive Tax regime (before 2021), the rate was 15% of a single business permit fee. The TOT system is simpler and more predictable for small businesses.
When is Turnover Tax due each month?▼
Turnover Tax must be filed and paid by the 20th of the following month. For example:
- January sales → Due by February 20th
- February sales → Due by March 20th
- December sales → Due by January 20th
Penalties for late payment:
- 5% of tax due or KES 10,000 (whichever is higher) for late filing
- 1% per month compound interest on unpaid tax
Can I deduct expenses from Turnover Tax?▼
No, expenses cannot be deducted from Turnover Tax. TOT is calculated on your gross turnover (total sales) before any expenses.
This is different from Corporate Income Tax where you can deduct business expenses to arrive at taxable profit. The simplicity of TOT (no expense tracking required) is both its advantage and limitation.
When TOT may not be beneficial: If your business has high operating expenses (above 90% of turnover), you might pay more tax under TOT than under the normal tax regime where you can deduct expenses.
What happens if my turnover exceeds KES 50 million?▼
If your annual turnover exceeds KES 50,000,000, you:
- Must exit TOT regime - You can no longer use the simplified Turnover Tax
- Register for VAT - Mandatory VAT registration threshold is KES 5,000,000
- Pay Corporate Income Tax - 30% on net profits (after deducting expenses)
- Maintain full accounts - Proper books of accounts required
Use our VAT Calculator to understand your new tax obligations.
How do I register for Turnover Tax on iTax?▼
Steps to register for TOT on iTax:
- Log into your iTax account at itax.kra.go.ke
- Go to Registration tab
- Click "Amend PIN Registration"
- Under Tax Obligations, add "Turnover Tax"
- Enter your business details and estimated annual turnover
- Submit the amendment application
- Wait for KRA approval (usually within 24-48 hours)
Required documents: Copy of business permit, KRA PIN certificate, National ID
What is the difference between Turnover Tax and Presumptive Tax?▼
Turnover Tax (TOT) replaced Presumptive Tax in Kenya. Here's the comparison:
| Feature | Presumptive Tax (Old) | Turnover Tax (Current) |
|---|---|---|
| Rate | 15% of business permit | 3% of gross turnover |
| Threshold | Up to KES 5M | KES 1M - 50M |
| Filing | Annual | Monthly |
| Tax Base | Business permit fee | Actual gross sales |
Is eTIMS required for Turnover Tax businesses?▼
Yes, eTIMS is now mandatory for all Turnover Tax registered businesses as of 2024. Key requirements:
- All invoices must be transmitted through eTIMS (Electronic Tax Invoice Management System)
- Three options available: eTIMS Lite (mobile app), eTIMS Online (web portal), or eTIMS Taxpayer Portal
- Invoice serial numbers are generated by KRA for each invoice
- Penalties for non-compliance: KES 1M or imprisonment up to 3 years
For small businesses, eTIMS Lite (smartphone app) is the easiest option. Download from Google Play or App Store.
Can I switch from TOT to normal income tax?▼
Yes, you can opt out of Turnover Tax and switch to normal income tax. Reasons to consider switching:
- High operating expenses - If expenses exceed 90% of turnover, normal tax may be lower
- Business losses - Under normal tax, losses can be carried forward; TOT doesn't allow this
- Capital allowances - Large asset purchases qualify for capital allowances under normal tax
How to switch:
- Complete the current tax year under TOT
- Apply to amend PIN registration on iTax
- Remove TOT obligation and add relevant income tax obligations
- Effective from the next tax year
Complete Guide to Turnover Tax in Kenya 2025
Introduction to Turnover Tax (TOT)
Turnover Tax (TOT) is a simplified tax regime introduced by the Kenya Revenue Authority (KRA) for small and medium-sized businesses. The tax was established under the Income Tax Act and became fully operational following the Finance Act 2022 amendments. It replaced the former Presumptive Tax system and provides a straightforward way for small businesses to meet their tax obligations.
The primary advantage of TOT is its simplicity – businesses pay a flat 3% of their gross turnover without the need for complex accounting records or expense deductions. This makes it ideal for traders, small retailers, service providers, and other micro and small enterprises (MSEs) that form the backbone of Kenya's economy.
Legal Framework and Rates
The Turnover Tax regime is governed by Section 12C of the Income Tax Act (Cap 470) as amended by the Finance Acts of 2019, 2020, 2021, and 2022. Key provisions include:
- Tax Rate: 3% of gross turnover (effective from January 2023)
- Minimum Threshold: KES 1,000,000 annual turnover
- Maximum Threshold: KES 50,000,000 annual turnover
- Filing Frequency: Monthly returns due by 20th of following month
- Payment Method: Via iTax e-Slip and M-Pesa Paybill 572572
Benefits of Turnover Tax for Small Businesses
Simplified Compliance
No need for complex bookkeeping. Just track your gross sales and pay 3%.
Predictable Tax Bill
Easy to budget – your tax is always 3% of what you sell.
Lower Compliance Costs
No need for expensive accountants to calculate complex deductions.
Final Tax
TOT is a final tax – no additional income tax obligations on business income.
Record Keeping Requirements
Even though TOT is simplified, businesses must maintain basic records:
- Sales records: Daily sales receipts, invoices, or sales book entries
- eTIMS invoices: All invoices must be transmitted through KRA's eTIMS system
- Bank statements: Showing business transactions and deposits
- M-Pesa statements: If using mobile money for business transactions
- Records retention: Keep all records for at least 5 years
Penalties for Non-Compliance
KRA Penalties Structure
- Late filing: KES 10,000 or 5% of tax due (whichever is higher)
- Late payment: 1% compound interest per month on unpaid tax
- Failure to register: Up to KES 100,000 fine or imprisonment
- eTIMS non-compliance: KES 1,000,000 or 3 years imprisonment
- Understatement of turnover: 75% of tax understatement plus interest
Important Reminders
- Filing deadline: 20th of the following month (e.g., January sales due by February 20th)
- Payment method: M-Pesa Paybill 572572 or bank deposit with e-Slip
- eTIMS required: All invoices must be transmitted through eTIMS
- No expense deductions: TOT is on gross turnover, not net profit
- Final tax: TOT is a final tax – no additional income tax on business income
Important Disclaimer
General Information Only: This calculator provides estimates based on publicly available information and standard rates. Results are for informational and educational purposes only and should not be considered as professional financial, legal, or tax advice.
Accuracy and Updates: While we strive to maintain accurate and up-to-date information using official sources including Kenya Revenue Authority (KRA), National Social Security Fund (NSSF), Social Health Insurance Fund (SHIF), and other relevant government agencies, rates and regulations may change. Always verify current rates with official sources.
Seek Professional Advice: For specific tax planning, salary negotiations, financial decisions, or legal matters, please consult with qualified professionals such as certified accountants, tax advisors, financial planners, or legal practitioners who can consider your individual circumstances.
No Liability: Top Calculator and its operators accept no liability for any loss, damage, or inconvenience arising from the use of this calculator or reliance on its results. Users are responsible for verifying all calculations and information with official sources before making financial decisions.
Official Sources: For authoritative information, please refer to:
- Kenya Revenue Authority (KRA) - www.kra.go.ke
- National Social Security Fund - www.nssfkenya.co.ke
- Social Health Insurance Fund - www.sha.go.ke
Last updated: January 2025. This disclaimer applies to all calculators on Top Calculator.