Your NSSF deduction
Tier I + II, 2026 rates
Under the Affordable Housing Act 2024 collection framework, an employee and employer each contribute 1.5% of the employee’s gross monthly salary. Only the employee’s share comes out of the employee’s pay. The employer funds its own share separately.
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Salary examples
| Monthly salary | Employee 1.5% | Employer 1.5% | Total remitted |
|---|---|---|---|
| 20,000 | 300 | 300 | 600 |
| 50,000 | 750 | 750 | 1,500 |
| 100,000 | 1,500 | 1,500 | 3,000 |
| 200,000 | 3,000 | 3,000 | 6,000 |
These examples assume ordinary regular cash salary. The levy has no NSSF-style earnings ceiling. At KES 100,000, deducting the combined KES 3,000 from the employee would incorrectly charge them the employer’s share.
Use the correct pay base
KRA’s gross-salary clarification includes basic salary and regular cash allowances. It distinguishes these from non-cash benefits and irregular payments such as a one-off bonus or terminal dues. Classification matters: a payment can be taxable for PAYE without automatically belonging in the Housing Levy base. Ask payroll to explain the treatment of unusual or recurring bonus arrangements.
The current PAYE deduction
KRA’s current PAYE guidance includes employee Housing Levy among deductions used to arrive at taxable employment income. Do not also apply the old Affordable Housing Relief as an extra tax credit. Older notices describe the historical relief, so their rate and collection details must be read alongside subsequent tax changes.
At a 30% marginal PAYE rate, a KES 1,500 allowable deduction reduces PAYE by KES 450 if the whole deduction falls in that band. The levy still costs the employee money; it is not fully refunded through PAYE.
Payment deadline and evidence
KRA specifies the ninth working day after the end of the month. This differs from PAYE’s ninth calendar day. The employer should reconcile the levy schedule, its own contribution and payment confirmation rather than assume paying PAYE has settled the levy too. The 2024 collection notice describes a 3% monthly penalty on unpaid levy; it does not say 1% daily interest.
What the levy does not mean
A payslip contribution is not proof that a house has been allocated to you, nor is it a personal savings balance that can automatically be withdrawn on leaving employment. Use the official housing programme’s separate eligibility and allocation process. Non-employment income has its own levy obligations; the salary examples above do not determine every business case.
For the overall salary calculation, see PAYE and net salary.
Sources and review date
Reviewed on 21 October 2026. Use the rules for the period being calculated; historical payslips may use different limits.