Export Processing Zone (EPZ) Employee Withholding Tax in Kenya (2026)
Employees of EPZ-licensed companies in Kenya's Export Processing Zones pay a reduced 15% withholding tax on employment income for the first 10 years of EPZ operation, compared to the standard progressive rates reaching 35%.
Kenya · Special Tax Regime · 2026
Last reviewed:
Flat Rate
15%
How it works
Employees of EPZ-licensed companies in Kenya's Export Processing Zones pay a reduced 15% withholding tax on employment income for the first 10 years of EPZ operation, compared to the standard progressive rates reaching 35%. EPZs were established under the Export Processing Zones Act (Cap. 517) and include major industrial estates near Nairobi, Mombasa, and Athi River. The 15% rate applies to both Kenyan and expatriate employees of qualifying EPZ entities. After the 10-year incentive period expires, standard employment tax rates apply.
Who qualifies?
Employees of companies holding valid EPZ licences and operating within designated Export Processing Zones; the 15% rate applies during the first 10 years of the EPZ company's operation.
Regime vs. Standard Rate
| Scenario | Rate / Tax |
|---|---|
| Standard Kenya top rate | 35% |
| Export Processing Zone (EPZ) Employee Withholding Tax rate | 15% |
| Potential saving vs. standard (at $100k) | Up to 16% lower |
Calculate your take-home under Export Processing Zone (EPZ) Employee Withholding Tax
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Planning overview — not tax advice. Regime rules change; verify with a licensed Maltese advisor and official sources. See our methodology for data sources.