🏛️ Understanding MMF Withholding Tax Calculation 🏛️ Withholding tax is a standard 15% tax deduction that applies to various types of income in money markets, including interest income from investments like Treasury bills, bonds, commercial papers etc The withholding tax amount is usually calculated based on the gross income earned by the investor. It is deducted by the financial institution or fund manager before disbursing the net income to the investor. Calculating withholding tax on interest income from money market investments in Kenya involves a straightforward process. Here’s a step-by-step guide to help you understand how it's done: Suppose you earn Ksh80,000 in interest income from your money market fund investment. The withholding tax rate is 15% Gross Interest Income = Ksh80,000 Withholding Tax Rate = 15% To calculate the withholding tax: Withholding Tax=80,000×0.15=12,000 Therefore, Ksh12,000 would be deducted as withholding tax, and you would receive Ksh 68,000 (Ksh80,000 - Ksh12,000) as net interest income.