Kenyans are bracing for increased salary deductions following new proposals outlined in the latest Finance Bill. If passed, the changes will significantly impact employees’ take-home pay, with higher rates introduced for key statutory contributions.
Among the most notable changes is the increase in the top PAYE (Pay As You Earn) rate from 35% to 38%, targeting high-income earners. The housing levy, introduced recently to support affordable housing, will also see an increment from 1.5% to 2.5%, further reducing disposable income for workers.
Additionally, contributions to the National Social Security Fund (NSSF) are set to rise from 6% to 9%, aligning with the government’s push for enhanced retirement benefits. Social Health Insurance, currently at 2.75%, will go up slightly to 3%, underlining efforts to boost the national healthcare system.
In a move affecting both employers and employees, the National Industrial Training Authority (NITA) levy will double from KSh50 to KSh100 per month.
While the government insists these reforms are necessary for long-term economic stability and social welfare, many Kenyans have expressed concern over the growing financial pressure on already strained incomes. Critics argue that the burden of taxation continues to fall heavily on the working class, with minimal improvements in service delivery.
The Finance Bill is now awaiting parliamentary debate, and its fate will determine the financial future of millions across the country.
