Kenya · Housing Levy
The Kenya Housing Levy, explained
The Affordable Housing Levy is a statutory deduction on Kenyan gross pay, paid by both employee and employer and remitted to the Kenya Revenue Authority alongside the monthly PAYE return. It is in force under the Affordable Housing Act 2024, and a constitutional challenge to it remains undecided at the Court of Appeal.
What the levy is
The Affordable Housing Levy is a statutory deduction on Kenyan gross pay, introduced to fund the affordable housing programme. It is unusual among the deductions on a Kenyan payslip in two ways: it is matched by the employer, and it is charged on gross pay rather than on a reduced base.
The rate, from source — and the dispute
This is the one rate on this site that carries a live legal caveat. We render it exactly as our dataset holds it, dispute and all:
Affordable Housing Levy — current rate
1.5% employee + 1.5% employer of gross pay, no cap
Collected by Kenya Revenue Authority (KRA). Paid by employer and employee.
Source · in force from 2024-03-19Sources disagree. In force under the Affordable Housing Act 2024, which the High Court upheld. A consolidated constitutional challenge was heard by a five-judge Court of Appeal bench on 19 January 2026 and, as at 14 July 2026, no judgment has been published. The levy stands until one is. This is the only genuinely unresolved rate on the site.
Why the dispute matters to you
A rate that is in force but under challenge is an awkward thing to build a payroll on, and it is worth being precise about what that actually means:
- It is in force. The Affordable Housing Act 2024 stands, and the High Court upheld it. An employer that stops deducting because a case exists is not being cautious — it is non-compliant.
- The challenge is unresolved. A consolidated constitutional challenge went before a five-judge Court of Appeal bench and no judgment had been published as at our last review.
- Nobody can tell you what happens next. Anyone confidently describing the outcome, or what would happen to amounts already collected, is guessing.
The practical position is the boring one: keep deducting it, keep the records, and be ready to change the day a judgment lands.
Where it sits on the payslip
The levy is one of 5 statutory items on a Kenyan payslip. It is remitted with the same monthly return as PAYE, so it does not have a calendar of its own — PAYE, NSSF, SHIF and the housing levy are remitted by the 9th of the month following payroll, through KRA’s iTax P10 return.
The Kenya payroll page shows it alongside every other deduction, each with its own rate and source.
What it costs, on a real salary
Because the levy is matched, it shows up twice: once as a deduction from the employee and once as an employer cost. The Kenya salary calculator shows both sides — the employee’s deduction and the employer’s contribution — against a real gross figure.
Rates on this page are rendered from our statutory dataset and were last reviewed against source on 2026-07-14. Statutory rates change with every finance act — check any figure against the relevant authority before you rely on it.
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Put this into practice
Questions
The Kenya Housing Levy, explained: common questions
Who pays the Affordable Housing Levy?
Both sides. It is paid by the employee and matched by the employer, and remitted to Kenya Revenue Authority (KRA) alongside the monthly PAYE return. The employer deducts the employee’s share and adds its own.
Is the housing levy still in force?
Yes. It is in force under the Affordable Housing Act 2024, which the High Court upheld. A consolidated constitutional challenge was heard by a five-judge Court of Appeal bench and, as at our last review, no judgment had been published. The levy stands until one is.
Can an employee opt out of the housing levy?
No. It is a statutory deduction, not a scheme with a choice attached. It applies to gross pay and the employer is obliged to deduct and remit it while it remains in force.
What happens to the levy if the court strikes it down?
That would depend entirely on the judgment — whether it applies prospectively, and what it says about amounts already collected. We are not going to guess. We track the case and update the rate the day a judgment lands.
Stop tracking rates by hand
PayrollMaster maintains every rate on this page and applies the current version on every payroll run — then files the return. Start free and run one real month against your own numbers.