Safi news

Kenya Kwanza Government has now decided to chop three percentum of the gross monthly from employees 

An employee who earns a monthly gross pay of Sh50,000, will lose Sh1,500 at the end of the month of August to the housing levy alone.

Government has announced that employees’ August payslips will shrink following the set implementation of  double deduction of the mandatory housing levy.

In a radical move, the Ministry of Lands, Public Works, Housing and Urban Development has published a public notice backdating the levy to July 1.

Under the controversial affordable housing levy, employees are required to part with 1.5 per cent of their monthly gross pay with their employers matching the same amount.

With the backdating of the contributions, then it means that employees will have their pay reduced by three per cent as employers move to implement the statutory deductions.

“The levy is payable by the employee and employer at a rate of one point five per centum of the employee’s gross monthly salary by the employee, and one point five per centum of the employee’s monthly gross salary by the employer, as outlined in the Finance Act 2023,” read the public notice.

This means that while employees will be giving away 3 per cent of their pay to cover the months of July ad August, employers will also be required to top that up with the same amount.

An employee who earns a monthly gross pay of Sh50,000 will lose Sh1,500 at the end of the month of August to the housing levy alone.

Those earning Sh100,000 will part with Sh3,000 for the months of July and August.

Those earning Sh100,000 will part with Sh3,000 for the months of July and August.

Those earning a monthly gross salary of Sh200,000 will lose a total of Sh6,000 to cover the two months.

The government says the levy, will be used to build affordable houses for low-income people.