What an IIT deduction is and how it is applied
In 2026, the basic IIT deduction is 30 MCI, or 129 750 ₸: the tax agent first reduces the employee’s income by the prescribed amounts and tax deductions and then calculates IIT on the taxable income (Article 439 of the Tax Code of the RK).
An IIT deduction reduces not the tax already calculated, but the income on which individual income tax is calculated. For employee income, the taxable amount is determined as accrued income subject to taxation at the source of payment, less the prescribed income reductions and tax deductions (Article 439 of the Tax Code of the RK).
When calculating payroll, it is important for the accountant to consider several questions separately:
- whether the individual is entitled to the selected tax deduction;
- whether the organization may apply this deduction as a tax agent;
- whether the conditions established for the deduction have been met;
- whether the information in the accounting system corresponds to the employee’s documents;
- whether the deduction application period is specified correctly;
- whether a previous entry affecting the current calculation remains in the system.
If the deduction data is recorded incorrectly, the system may determine taxable income in an amount that does not correspond to the employee’s documents. Therefore, the result should be checked based on the composition of accrued income, applied income reductions, and tax deductions, rather than only the final IIT amount.
The tax agent calculates IIT on employee income for the tax period on a cumulative basis from 1 January of the calendar year. IIT calculated for the previous tax periods of the same year is deducted from the cumulative tax amount (Article 441 of the Tax Code of the RK).
IIT deductions in the RK in 2026: what the accountant should check
When calculating IIT deductions in 2026, the parameters of the previous year must not be reproduced mechanically. The basic tax deduction in 2026 is 30 MCI, that is, 129 750 ₸ with an MCI of 4 325 ₸. The accounting system must apply the parameters for 2026.
Before the first payroll calculation, the accountant should reconcile the following for each employee:
- Check the type and basis of the applicable deduction.
- Compare the available documents with the information in the employee’s record.
- Check the start and end dates of the deduction entries.
- Make sure that the previous entry has ended if the basis or parameters of the deduction have changed.
- Perform a preliminary calculation and review the breakdown of taxable income.
- Reconcile the amount of the applied deduction with the current value and calculation period.
- Check the final IIT amount, taking into account the cumulative calculation from the beginning of the year.
When determining the taxable amount of employee income, the tax deductions prescribed for such income are taken into account (Article 439 of the Tax Code of the RK). Therefore, the accountant must correctly determine the nature of the payment: the procedures for calculating employee income and an individual’s income from performing work or providing services to a tax agent are set out in different clauses of Article 439 of the Tax Code of the RK.
For an individual’s income from the sale of goods, performance of work, or provision of services to a tax agent, the taxable amount is determined taking into account tax deductions for social payments, social tax deductions, and the basic deduction in accordance with the established procedure (Article 439 of the Tax Code of the RK). Consequently, a payment under a civil-law contract must not be treated as salary solely because the recipient is also an employee of the organization.
When checking the basic deduction, it is not sufficient for the accountant merely to see its name in the employee’s record. It is necessary to ensure that the correct amount for the required period was included in the calculation and that the type of income was determined correctly. If the expected amount differs from the calculated amount, the breakdown of taxable income and the sequence in which deductions were applied should be reviewed.
Application for an IIT deduction and accounting in 1C
If the basis for the applicable deduction is documented by an application or another employee document, the information in the system must correspond to that document: the type of deduction, the application period, and the individual’s details. The mere presence of the document in the personnel file does not correct an erroneous setting in the accounting system.
When recording IIT deductions in 2026, the accountant should check the employee’s record and the section containing tax deduction information. The section name and command location depend on the configuration used. Release series 3.0.74.x is current for “Accounting for Kazakhstan,” and 3.1.37.x for “Payroll and HR Management for Kazakhstan.”
If the employee has submitted a new document to replace the previous one, two entries must not be erroneously applied to the same period. The end date of the previous entry and the start date of the new one must be checked in the system. These dates must correspond to the documented grounds and the calculation period.
Practical verification procedure:
- open the record of the relevant employee;
- go to the tax deduction information;
- compare the entries with the employee’s documents;
- check the type and amount of the deduction;
- check the validity periods and ensure that there are no erroneous overlaps;
- when the basis changes, properly end the previous entry;
- record the new entry from the relevant period;
- recalculate the accruals and review the IIT breakdown;
- reconcile the result with the cumulative calculation from 1 January.
The employee’s documents, calculation-period parameters, and system settings must be consistent with one another. Manually changing the final withholding amount without correcting the source data may distort subsequent calculations because IIT on employee income is calculated on a cumulative basis during the calendar year (Article 441 of the Tax Code of the RK).
After changing a deduction entry, the calculation document must be reposted or recalculated in accordance with the procedure provided by the configuration used. Then not only the tax amount but also the income, income reductions, tax deductions, and taxable amount should be checked.
Why IIT was calculated without a deduction or deductions were applied incorrectly
If the deduction was not applied as expected, it is best to start by checking the source data. The cause may be an incorrect entry period, an incorrectly selected deduction type, an outdated value, overlapping entries, or failure to recalculate after changes were made.
If IIT is absent from withholdings or its amount differs from the expected amount, check the following in sequence:
- whether there is income in the period that is subject to taxation at the source of payment;
- whether the individual’s status and type of income have been determined correctly;
- whether information about the applicable deduction has been recorded;
- whether the entry is valid in the calculation month;
- whether the basic deduction amount corresponds to 129 750 ₸ for 2026;
- whether there are overlapping entries;
- whether recalculation was performed after the source data was changed;
- whether the calculation breakdown shows the applied deduction;
- whether IIT calculated for previous periods of the current year has been taken into account.
The absence of IIT does not always indicate a technical error. If there is no taxable income after the prescribed income reductions and tax deductions, there is also no amount on which tax can be calculated. Such a result should be checked based on how taxable income was determined (Article 439 of the Tax Code of the RK).
For a payment under a civil-law contract, it is first necessary to check how the income is classified in the system. Article 439 of the Tax Code of the RK separately establishes the procedure for determining an employee’s taxable income and an individual’s income from the sale of goods, performance of work, or provision of services to a tax agent. Therefore, copying a setting from a payroll calculation may produce an incorrect result.
After correcting the source data, it is important to recalculate the document and then compare the accrued income, prescribed income reductions, applied deductions, taxable amount, and IIT. When checking the tax, it is necessary to take into account that employee income is calculated on a cumulative basis from the beginning of the calendar year, with IIT for previous tax periods credited against it (Article 441 of the Tax Code of the RK).
Frequently asked questions
What does an IIT tax deduction mean? — It is an amount that, where the established grounds exist, reduces income before individual income tax is calculated. An employee’s taxable income is determined after taking into account the prescribed income reductions and tax deductions (Article 439 of the Tax Code of the RK).
What basic tax deduction applies in 2026? — 30 MCI. With an MCI of 4 325 ₸, this is 129 750 ₸.
Is a new deduction application required in 2026? — The beginning of a new calendar year alone is not sufficient grounds to conclude that a new application is required. The accountant checks the valid basis, the contents of the existing document, and the entry period in the accounting system.
Why did the basic deduction not appear in the calculation? — The type of income, entry period, deduction amount, source documents, overlapping entries, and completion of recalculation should be checked. The result should be reconciled against the taxable income breakdown.
Can the deduction settings for 2025 be used? — A saved entry may be retained only if it corresponds to the valid basis and the parameters for 2026. The amount of the basic deduction and its application period must be checked before the calculation.
Why does IIT for the current month change after the deduction is changed? — IIT on employee income is calculated on a cumulative basis from 1 January, after which the tax calculated for previous periods of the calendar year is deducted from the result (Article 441 of the Tax Code of the RK).
What should be done if IIT is calculated incorrectly after the deduction is changed? — Check the basis and periods of the entries, eliminate any erroneous overlap, recalculate the document, and compare the income, deductions, taxable amount, and tax in the calculation breakdown.
Legal basis
The procedure for determining an individual’s taxable income at the source of payment is established by Article 439 of the Tax Code of the RK. The procedure for calculating IIT on employee income by a tax agent on a cumulative basis from the beginning of the calendar year is established by Article 441 of the Tax Code of the RK.