If your company's year ends on 31 December, its last instalment tax payment is due on 20 December. It lands in the most expensive week of the year, when cash is going on bonuses, stock and suppliers before the break. That is why so many companies miss it or pay too little.
What instalment tax is
A company does not wait until after year end to pay its income tax. It pays most of it during the year, in four parts, then settles the balance after the accounts are done.
| Payment | Due date (31 December year end) |
|---|---|
| First instalment | 20 April |
| Second instalment | 20 June |
| Third instalment | 20 September |
| Fourth instalment | 20 December |
| Balance of tax | 30 April of the following year |
| Company tax return | 30 June of the following year |
If your year ends in another month, the rule is the same: the 20th day of the 4th, 6th, 9th and 12th months of your financial year.
How much to pay
Each payment is a quarter of the lower of two figures: your estimated tax for this year, or 110% of last year's tax. Paying on either basis meets the rule.
Say last year's tax was KES 800,000. On the 110% basis, each instalment is KES 220,000. If a slower year means this year's tax looks closer to KES 600,000, each instalment is KES 150,000. You can pay the lower figure, as long as the estimate is honest and you can support it.
What a missed or short payment costs
KRA charges interest of 1% a month on any instalment that is unpaid or short, from its due date until the balance is cleared. It does not wait for your return. A KES 220,000 shortfall left until April costs about KES 9,000 in interest alone.
Why December catches owners out
- The September estimate is never revisited, even after a strong or weak quarter.
- Many owners believe company tax is paid once, after year end.
- The money has already gone on festive season stock and staff bonuses by the time anyone checks.
Five things to do before 20 December
- Update your estimate of this year's profit using January to September actual figures and a fair view of the last quarter.
- Compare it with 110% of last year's tax and use the lower basis.
- Check on iTax that your April, June and September payments reached KRA in full. Top up any shortfall with the December payment.
- Set the December amount aside in November, before the festive spending starts.
- Pay a few days early so the payment shows on iTax before the 20th.
Every monthly and annual date is in our KRA compliance calendar. What each missed deadline costs is in KRA penalties in 2026.
Not sure what your December payment should be?
We work out each instalment for our clients, so the amount is right and it reaches KRA on time.
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