As a general rule, all types of remuneration and benefit received by an employee for services rendered constitute taxable income. s.5(2).

• Gains or profits from employment include;
  
  
  1. Wages, salaries, overtime and leave pay.
  
  
  2. Sick pay, commissions and fees; and
  3. Bonus, gratuity or subsistence, travelling, entertainment or other allowances
  4. Any other allowance received in the course of employment
• Amounts above are charged on an "earnings" basis and not "receipts" basis


• Employment income for a non-resident person in relation to services rendered to an employer who is resident in Kenya or a P.E in Kenya of an employer who is not so resident is deemed to have accrued in or to have been derived from Kenya. s.5(1)b


• Any amount not paid in cash but credited to an employee's account with the employer is to be treated as income and tax deducted accordingly.


• Employment compensation can take either of these two forms which determines method of valuation:
  
  
  1. Cash emoluments; or
  2. Non-cash benefits