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Taxation of pension withdrawals
heri
#1 Posted : Friday, April 17, 2020 11:02:22 AM
Rank: Member


Joined: 9/14/2011
Posts: 744
Location: nairobi
Just checking how pension withdrawals are taxed?

if i am not yet at retirement age and i withdraw 100% of my pension contributions and 50% of the employer contributions ( i hope that is still allowable under the current law)

is the total of the two then subjected to taxation based on the sliding scale such that if the total is about 2M i only get about sh 1.5m or thereabouts?

someone help
Ericsson
#2 Posted : Friday, April 17, 2020 11:23:17 AM
Rank: Elder


Joined: 12/4/2009
Posts: 8,395
Location: NAIROBI
heri wrote:
Just checking how pension withdrawals are taxed?

if i am not yet at retirement age and i withdraw 100% of my pension contributions and 50% of the employer contributions ( i hope that is still allowable under the current law)

is the total of the two then subjected to taxation based on the sliding scale such that if the total is about 2M i only get about sh 1.5m or thereabouts?

someone help

Yes using the prevailing income tax brackets
maka
#3 Posted : Friday, April 17, 2020 12:16:03 PM
Rank: Elder


Joined: 4/22/2010
Posts: 11,340
Location: Nairobi
Ericsson wrote:
heri wrote:
Just checking how pension withdrawals are taxed?

if i am not yet at retirement age and i withdraw 100% of my pension contributions and 50% of the employer contributions ( i hope that is still allowable under the current law)

is the total of the two then subjected to taxation based on the sliding scale such that if the total is about 2M i only get about sh 1.5m or thereabouts?

someone help

Yes using the prevailing income tax brackets



Interesting....
possunt quia posse videntur
Angelica _ann
#4 Posted : Friday, April 17, 2020 12:19:13 PM
Rank: Elder


Joined: 12/7/2012
Posts: 11,481
maka wrote:
Ericsson wrote:
heri wrote:
Just checking how pension withdrawals are taxed?

if i am not yet at retirement age and i withdraw 100% of my pension contributions and 50% of the employer contributions ( i hope that is still allowable under the current law)

is the total of the two then subjected to taxation based on the sliding scale such that if the total is about 2M i only get about sh 1.5m or thereabouts?

someone help

Yes using the prevailing income tax brackets



Interesting....


Thought upto 520k is tax exempt, then you start taxation on the excess amount from 1 bob applying the income tax brackets, was it changed?
In the business world, everyone is paid in two coins - cash and experience. Take the experience first; the cash will come later - H Geneen
RIEK01
#5 Posted : Friday, April 17, 2020 4:44:08 PM
Rank: New-farer


Joined: 2/8/2018
Posts: 66
For lumpsum withdrawal, the exempt amount is 60k for every year worked to a max of 600k.
heri
#6 Posted : Friday, April 17, 2020 5:02:53 PM
Rank: Member


Joined: 9/14/2011
Posts: 744
Location: nairobi
RIEK01 wrote:
For lumpsum withdrawal, the exempt amount is 60k for every year worked to a max of 600k.


Is it every year worked or no of years one has been in the pension scheme?
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