How to File KRA Returns as a Freelancer or Side Hustler(2026 Guide)

If you earn money from freelancing, consultancy, online gigs, or any side hustle in Kenya, the Kenya Revenue Authority (KRA) expects you to declare that income — and the 2026 filing deadline is June 30, 2026. Miss it, and you are looking at penalties that can quickly add up.

The good news? Filing KRA returns as a freelancer or side hustler is not as complicated as most people think. You do not need to hire an expensive tax consultant. This step-by-step guide covers exactly what you need to do, how much tax you might owe, and how to avoid the most common mistakes Kenyan freelancers make.

Who Needs to File KRA Returns in Kenya?

Before diving in, let us be clear about who is required to file:

• Full-time freelancers and self-employed individuals — graphic designers, writers, developers, photographers, consultants, trainers, and so on
• Employed Kenyans with side hustles — if you have a salaried job AND earn income from a side hustle, you must declare both in a single return
• Online workers — income from platforms like Upwork, Fiverr, Toptal, or social media monetisation is taxable income in Kenya
• Anyone with a KRA PIN — even if you earned zero income in 2025, you must file a Nil Return to remain compliant

As KRA stated in its 2026 clarification: employed Kenyans with additional income from freelancing, consultancy, online services, farming, or rental earnings must declare all sources in one return — not just their salary.

Key Dates to Know for KRA Returns in 2026

Do not wait until the last week of June. The iTax portal typically experiences high traffic as the deadline approaches, and technical issues can leave you unable to file in time.

How Much Tax Will You Pay as a Freelancer in Kenya?

Freelancers and side hustlers in Kenya are taxed under the individual income tax (progressive) rate. This means the more you earn, the higher the rate applied — but only on the portion of income that falls within each band.

Here are the 2026 income tax bands for individuals:

Personal relief of KSh 28,800 per year (KSh 2,400/month) is deducted from your final tax bill — every taxpayer is entitled to this.

What About Turnover Tax (TOT)?

If your annual gross business income is between KSh 1,000,000 and KSh 50,000,000, you may opt into the Turnover Tax (TOT) regime instead of income tax. TOT is simpler — it is charged at a flat rate on your gross turnover without deducting expenses. Check the current TOT rate on the KRA website before choosing this route, as it may not always be the most tax-efficient option for freelancers with significant deductible expenses.

What If I Earn Over KSh 5 Million a Year?

If your annual turnover exceeds KSh 5,000,000, you are required to register for VAT, charge 16% VAT on your services, file monthly VAT returns, and issue invoices through the eTIMS (Electronic Tax Invoice Management System).

What Expenses Can Freelancers Deduct?

This is where many Kenyan freelancers leave money on the table. You do not pay tax on your entire gross income — you are entitled to deduct legitimate business expenses before calculating your taxable income.

Allowable deductions for freelancers in Kenya include:

• Internet and data costs — your monthly broadband or mobile data bills used for work
• Equipment and devices — laptops, cameras, microphones, printers bought for business use
• Software subscriptions — Adobe Creative Suite, Microsoft 365, Canva Pro, accounting tools, and similar
• Home office costs — a portion of rent or utilities if you work from home (must be reasonable and documented)
• Transport costs — travel to client meetings, site visits, and business-related trips
• Professional development — online courses, certifications, and training directly related to your work
• Accounting and professional fees — fees paid to accountants or tax consultants

What you cannot deduct: personal expenses — holidays, groceries, personal vehicle costs unrelated to business, or anything that is not directly tied to earning your business income.

Keep receipts, invoices, and bank records for everything. KRA can audit your records and request supporting documentation.

Step-by-Step: How to File KRA Returns as a Freelancer on iTax

What You Will Need Before You Start

• Your KRA PIN and iTax password (reset at itax.kra.go.ke if forgotten)
• Records of all income earned between January 1 and December 31, 2025 — invoices, M-Pesa statements, bank statements, PayPal records, platform payment histories
• Records of all business expenses with supporting documents
• Your P9 form from your employer (if you are also employed)
• Any withholding tax certificates from clients who deducted tax before paying you

Step 1: Log Into the iTax Portal

Go to itax.kra.go.ke and log in with your KRA PIN and password. If you have never logged in before, use the “Forgot Password” option to reset and set up your account.

Step 2: Navigate to “Returns”

On the iTax dashboard, click on “Returns” in the top menu, then select “File Returns” from the dropdown.

Step 3: Select the Correct Return Type

This is where freelancers and side hustlers often go wrong. Select:

• “Income Tax Resident Individual (IT1)” — this is the correct form for freelancers, self-employed individuals, and employed Kenyans with additional income

Do NOT select the PAYE-only return if you have side income — it will not accommodate your additional income sources.

Step 4: Download and Fill in the Excel Return Form

iTax will prompt you to download a pre-filled Excel return form. Open it and fill in the relevant sections:

If you are fully self-employed (freelancer only):

• Go to the “Business Income” section
• Enter your total gross income for the year
• Enter your total allowable business expenses
• The form will automatically calculate your net taxable income

If you are employed AND have a side hustle:

• Enter your employment income from your P9 form in the employment section
• Separately declare your side hustle / freelance income in the business income section
• Both income streams will be combined to calculate your total tax liability

Claim your reliefs:

• Personal relief (KSh 28,800 per year — automatically applied)
• Insurance relief (15% of premiums paid, up to KSh 60,000 per year)
• NHIF / SHIF contributions
• Pension contribution relief (up to KSh 240,000 per year or 30% of pensionable pay)

Apply withholding tax credits: If any of your clients deducted withholding tax (typically 5%) before paying you, enter those amounts here. They will reduce the tax you owe.

Step 5: Upload the Completed Form

Save the completed Excel form and upload it back to iTax. The system will validate the file and flag any errors. Fix any errors highlighted and re-upload.

Step 6: Submit and Check Your Tax Position

Once uploaded successfully, iTax will show you a summary of your return — your total income, deductions, tax payable, reliefs applied, and final tax due or refund owed.

If tax is owed, pay via:

• M-Pesa Paybill: Business Number 222222, Account Number = your KRA PIN followed by the payment registration number (PRN) generated by iTax
• Bank transfer to KRA’s designated accounts
• iTax direct debit

Step 7: Download Your Acknowledgement Receipt

After submitting, download and save the acknowledgement receipt. This is your proof of filing. Store it alongside your tax records for at least five years.

Special Situations Freelancers Should Know About

Withholding Tax: How It Works

Many corporate clients and government agencies in Kenya are required to deduct withholding tax at 5% from payments made to consultants and freelancers before paying them. If this has happened to you, you should have received a withholding tax certificate from the client.

These certificates are valuable — the amounts deducted are a credit against your annual tax bill. Always request them from clients who withhold tax, and enter them on your return.

Instalment Tax: For Higher Earners

If your annual tax liability is expected to exceed KSh 40,000, you are required to pay tax in instalments during the year — not just at filing time. Instalment tax for the 2026 year of income is due in April, June, September, and December. Failure to pay instalments attracts a penalty of 20% on any shortfall.

Upwork, Fiverr, and International Platform Income

Income earned from international freelancing platforms — Upwork, Fiverr, Toptal, 99designs, and others — is fully taxable in Kenya. KRA is increasingly using bank statements and M-Pesa records to identify undeclared income, so declaring this income accurately is essential.

What Happens If You Do Not File KRA Returns?

Filing KRA returns as a freelancer is not optional — and the penalties for non-compliance have teeth:

• Late filing penalty: KSh 2,000 for individuals, or 5% of the tax due — whichever is higher
• Late payment interest: 1% per month on any unpaid tax balance
• KRA enforcement actions for persistent non-compliance include: deactivation of your KRA PIN, garnishment of bank accounts, travel restrictions, and in serious cases, prosecution

KRA has significantly upgraded its data capabilities in 2026, cross-referencing iTax filings against bank records, M-Pesa transaction data, and withholding tax returns submitted by clients. The days of undeclared side income going unnoticed are quickly coming to an end.

Common Mistakes Freelancers Make When Filing KRA Returns

1. Filing a Nil Return when you actually had income KRA can cross-check your M-Pesa and bank records. Filing nil when you earned income is a serious compliance risk.

2. Not declaring international platform income Upwork and Fiverr income is taxable. Declare it.

3. Forgetting to claim business expense deductions Not claiming your legitimate expenses means you pay more tax than you should.

4. Not collecting withholding tax certificates from clients Without the certificate, you cannot offset that tax against your bill.

5. Filing multiple returns If you make a mistake, do not file again — amend the original return instead.

6. Waiting until June 30 to file The portal gets extremely congested in the last week of June. File early.

Do You Need a Tax Consultant?

For most freelancers with straightforward income — one or two income streams and simple expenses — filing KRA returns yourself on iTax is entirely manageable using this guide. If you do choose to hire help, tax consultants in Kenya typically charge between KSh 5,000 and KSh 20,000 for annual filing.

If your income is more complex — multiple clients, international payments, potential VAT registration, or instalment tax requirements — a certified tax advisor can be worth the fee.

KRA also offers free assistance via:

• Call centre: 020-4-999-999
• Email: [email protected]
• Huduma Centres across Kenya

Final Word

Filing KRA returns as a freelancer or side hustler in Kenya does not have to be stressful or expensive. Know your income, track your expenses, log into iTax, and submit before June 30, 2026. The process takes most freelancers less than two hours once all their records are in order.

The real cost of not filing is far higher than the tax itself — in penalties, stress, and the growing risk of KRA enforcement. Get it done, and get it done early.

The filing window for income tax returns (year of income 2025) runs from January 1, 2026 to June 30, 2026. Always verify current rates and procedures at kra.go.ke.