Last verified: 16 October 2026. Payroll rules change; confirm current rates with the authority before filing, or let your OurPay specialist do it.
The rate
| Employee | 1.5% of gross pay |
|---|---|
| Employer | A matching 1.5% of gross pay |
| Ceiling | None. It applies to all gross pay. |
| Due | By the 9th of the following month, through KRA |
| Law | Affordable Housing Act, 2024 |
Examples
| Monthly gross | Employee 1.5% | Employer 1.5% | Combined |
|---|---|---|---|
| 30,000 | 450 | 450 | 900 |
| 100,000 | 1,500 | 1,500 | 3,000 |
| 500,000 | 7,500 | 7,500 | 15,000 |
Try it: monthly gross to net pay in Kenya
Estimate for a resident employee with personal relief only. For housing, car, pension and other benefits use the full Kenya payslip calculator.
Gross, not basic
The levy is worked out on gross pay, which includes allowances, not just basic salary. Using basic pay understates both sides.
Tax treatment
The employee's levy is deducted from pay before PAYE, so it lowers taxable pay. The employer's share is an additional cost to the business, so it belongs in your cost-to-company figure.
Filing and late payment
The levy is remitted to KRA with your other monthly returns by the 9th. Practitioner guidance reports a penalty of 3% of the unpaid amount per month for late payment. Confirm the current rate with KRA.
Common mistakes
- Not registering for the levy, or registering late.
- Calculating on basic pay instead of gross.
- Leaving the employer's 1.5% out of cost-to-company budgets.
- Working out PAYE before taking the levy off.
Frequently asked questions
Is the Housing Levy refundable?
The levy and what employees can claim back are set by the Affordable Housing Act, 2024. Check the Act or KRA for the current position before advising staff.
Does it apply to casual workers?
It applies to employees' gross pay. If you employ casual or contract workers, confirm their status with your payroll specialist so the right deductions apply.