Kenya | Relocation Allowance
Relocation allowance is treated as a taxable emolument except where the allowance is a reimbursement of actual costs incurred by the employee in relocating to a new work location. Relocation Costs are not specifically mentioned in the Kenyan Income Tax Act or subsequent legislation.
This is covered by 3(2)(a)(ii) which states that only 'gains or profits' from employment or services rendered are taxable.
If the employee receives a cash allowance for relocation, it is taxable in their hands. However, if they keep receipts of their relocation expenses and are reimbursed for the exact amount spent by the employer, there is no profit or gain, and it is not taxable. The employer is simply compensating the employee for the costs incurred during relocation.
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