Your April salary is likely to be lower by some thousands of shillings after the government ordered employers to start making deductions aimed at funding the Jubilee administration’s housing project.
In a newspaper advertisement on Tuesday, the Housing ministry and the Kenya Revenue Authority announced that the housing fund levy “has come into effect”, meaning every employed Kenyan must remit 1.5 per cent of their basic salary for April to the National Housing Development Fund.
SH5,000 MAX
Employers are also required to send a figure matching the employees’ deductions to the Housing fund.
“The employers are required to deduct and remit the levy together with other statutory levies from both the employer and the employee by the 9th of each succeeding month together with other payroll statutory deductions. The first contribution shall be due by May 9, 2019,” the advertisement stated.
That means that if a person’s basic salary is Sh50,000, some Sh750 of that will be retained by their employer to be remitted to the Housing fund.
The employer will also pay Sh750, meaning the company will send Sh1,500 to the National Housing Development Fund.
However, if the total exceeds Sh5,000, the government says it will not take a coin more.
That means that a person whose basic pay is, say, Sh200,000 and whose deduction will be Sh3,000 plus the employer’s Sh3,000, will not see Sh6,000 remitted to the Housing fund.
Just Sh5,000 will suffice.
The deduction became law by the enactment of the Finance Act 2018 that followed the budget statement presented to Parliament by Treasury Cabinet Secretary Henry Rotich.
