What is the Affordable Housing Levy?
The Affordable Housing Levy (AHL) is a deduction of 1.5% of an employee's gross monthly salary, matched by another 1.5% from the employer. The money goes into the Affordable Housing Fund, which pays for the government's affordable housing programme. It shows on most Kenyan payslips as "Housing Levy" or "AHL".
The levy first appeared in the Finance Act 2023. In November 2023 the High Court found that version unconstitutional, so Parliament passed a standalone law, the Affordable Housing Act, 2024. It was signed on 19 March 2024, and sections 4 and 5, which create and collect the levy, took effect that day. The Kenya Revenue Authority (KRA) collects it on behalf of the Fund. Its public notice confirms the 1.5% employee and 1.5% employer rates and the base of gross monthly salary: see the KRA notice on collection of the Affordable Housing Levy.
A housing levy calculator only needs one number for the levy itself: your gross pay. Most people use one to check what the levy does to their take-home pay, though, and that means bringing in SHIF, NSSF and PAYE as well. Since December 2024 the levy also lowers your taxable pay, so it has to be worked out before PAYE. The calculator above handles that order for you.
Housing levy rates and the other payroll deductions in 2026
Here are the statutory deductions on a Kenyan salary as of October 2026, with the rule that sets each one.
| Deduction | Employee | Employer | Base and limits |
|---|---|---|---|
| Affordable Housing Levy | 1.5% | 1.5% | Gross monthly salary, no upper cap |
| SHIF (Social Health Insurance Fund) | 2.75% | None for salaried staff | Gross salary, minimum KES 300 a month, no cap |
| NSSF Tier I | 6% | 6% | Pay up to KES 9,000 (max KES 540 each) |
| NSSF Tier II | 6% | 6% | Pay from KES 9,000 to KES 108,000 (max KES 5,940 each) |
| PAYE | 10% to 35% | None | Taxable pay after the deductions above, less KES 2,400 personal relief |
SHIF replaced NHIF from 1 October 2024 under the Social Health Insurance Act, 2023. Salaried employees pay 2.75% of gross salary, with a minimum of KES 300. The employer deducts it and remits it, but there is no employer contribution on top.
NSSF contributions follow the phased schedule in the NSSF Act, 2013. February 2026 began the fourth year of that schedule, so the lower earnings limit (LEL) rose from KES 8,000 to KES 9,000 and the upper earnings limit (UEL) from KES 72,000 to KES 108,000. The rate stays at 6% each for employee and employer. The highest possible employee deduction is now KES 6,480 a month, up from KES 4,320. Employers who have contracted out of Tier II pay that part into an approved private scheme instead, but the amount taken from your pay is normally the same.
PAYE tax bands (monthly)
| Monthly taxable pay | Rate |
|---|---|
| First KES 24,000 | 10% |
| Next KES 8,333 (to KES 32,333) | 25% |
| Next KES 467,667 (to KES 500,000) | 30% |
| Next KES 300,000 (to KES 800,000) | 32.5% |
| Above KES 800,000 | 35% |
Every resident employee then gets personal relief of KES 2,400 a month, taken off the tax. If the tax is less than KES 2,400, PAYE is zero. In 2026 the National Treasury proposed raising the zero-tax point to KES 30,000 and cutting the rate between KES 30,000 and KES 50,000 to 25%. Those changes were dropped from the Finance Bill 2026 and moved to a separate Tax Laws (Amendment) Bill. In mid-September 2026 that bill was still waiting for public participation, so the bands above remain the law. We will update this page if it passes.
Why the housing levy now reduces your PAYE
Before December 2024, the housing levy and NHIF came out of your pay after tax. You paid PAYE on money you never received, and the only help was an "affordable housing relief" of 15% of the levy, taken off your tax.
The Tax Laws (Amendment) Act, 2024 changed this from 27 December 2024. KRA's notice on PAYE computation states that the levy deducted under the Affordable Housing Act and contributions to SHIF are now deductible from employment income, and that the affordable housing relief ends. In practice:
- Taxable pay = gross pay − NSSF − SHIF − housing levy (minus any other allowable items, such as extra pension contributions).
- The 15% housing relief no longer appears on payslips from December 2024.
- SHIF contributions do not qualify for insurance relief, because they are already deducted in full.
The same Act raised the pension deduction limit to KES 30,000 a month (NSSF counts towards it), the mortgage interest limit to KES 30,000 a month, and allowed post-retirement medical fund contributions up to KES 15,000 a month. You can enter these under "More options" in the calculator.
Because the levy is now deductible, it costs you less than its face value. Every shilling of levy lowers taxable pay by a shilling, so if your top PAYE rate is 30%, a KES 1,500 levy saves you KES 450 in tax. Your take-home pay falls by about KES 1,050, not KES 1,500. The calculator shows this as the "real cost after tax".
How the housing levy calculator works
- Gross pay = basic salary + regular cash allowances (house, transport, commuter and similar).
- Housing levy = gross × 1.5%. Your employer remits the same again, so KRA receives gross × 3%.
- SHIF = gross × 2.75%, or KES 300 if that is higher.
- NSSF = 6% × min(gross, 9,000) + 6% × (min(gross, 108,000) − 9,000) when gross is above KES 9,000.
- Taxable pay = gross − NSSF − SHIF − housing levy − other allowable deductions.
- PAYE = tax from the bands − KES 2,400 personal relief − insurance relief (never below zero).
- Net pay = gross − NSSF − SHIF − housing levy − PAYE − any extra pension you pay.
On the base, KRA guidance on the Affordable Housing Act treats gross salary as basic pay plus regular cash allowances such as house and travel allowance. Irregular payments, such as leave allowance, bonuses, gratuity and terminal dues, are outside the levy base. That is why the calculator asks for basic salary and regular allowances only.
Worked example: KES 100,000 a month
Wanjiru earns a basic salary of KES 80,000 plus KES 20,000 in house and transport allowances, so her gross pay is KES 100,000. Here is her payslip from February 2026 onward.
| Gross pay | KES 100,000.00 |
| Housing levy: 100,000 × 1.5% | − 1,500.00 |
| SHIF: 100,000 × 2.75% | − 2,750.00 |
| NSSF: 540 (Tier I) + 6% × 91,000 = 5,460 (Tier II) | − 6,000.00 |
| Taxable pay | 89,750.00 |
| Tax: 24,000 × 10% = 2,400.00 | |
| Tax: 8,333 × 25% = 2,083.25 | |
| Tax: 57,417 × 30% = 17,225.10 | 21,708.35 |
| Less personal relief | − 2,400.00 |
| PAYE | 19,308.35 |
| Net pay (100,000 − 1,500 − 2,750 − 6,000 − 19,308.35) | KES 70,441.65 |
Her employer pays another KES 1,500 housing levy and KES 6,000 NSSF, so the total cost of employing her is KES 107,500 a month before other employer costs. KRA receives KES 3,000 in housing levy for her each month, or KES 36,000 a year. Because her top tax rate is 30%, her own KES 1,500 levy lowers her PAYE by KES 450, so it really reduces her take-home pay by KES 1,050.
The same figures (taxable pay KES 89,750, PAYE about KES 19,308, net about KES 70,442) appear in published 2026 examples from Kenyan payroll sites that use these rates. You can reproduce them by keeping the calculator's defaults.
Second example: KES 50,000 a month
Housing levy is KES 750, SHIF KES 1,375 and NSSF KES 3,000 (all 6% because the pay is below the upper limit). Taxable pay is 50,000 − 750 − 1,375 − 3,000 = KES 44,875. Tax is 2,400 + 2,083.25 + 30% × 12,542 = KES 8,245.85. After the KES 2,400 relief, PAYE is KES 5,845.85 and net pay is about KES 39,029.
Housing levy at different salaries
| Gross monthly salary | Employee levy | Employer levy | Total to KRA | Employee levy per year |
|---|---|---|---|---|
| KES 20,000 | 300 | 300 | 600 | 3,600 |
| KES 30,000 | 450 | 450 | 900 | 5,400 |
| KES 50,000 | 750 | 750 | 1,500 | 9,000 |
| KES 100,000 | 1,500 | 1,500 | 3,000 | 18,000 |
| KES 200,000 | 3,000 | 3,000 | 6,000 | 36,000 |
| KES 500,000 | 7,500 | 7,500 | 15,000 | 90,000 |
Who pays the housing levy, and who does not
- Salaried employees in the private and public sectors, including county staff, teachers and casual workers on a payroll. There is no minimum salary below which the levy stops.
- Employers pay a matching 1.5% for every employee. The employer's share is an allowable business expense under section 15 of the Income Tax Act.
- Other income earners. Section 4(2)(b) of the Act puts the levy on the gross income of people who are not salaried, but the practical way of collecting it from them has been less clear than for payroll. If you are self-employed, check your obligations with KRA or a tax adviser.
- Exemptions can only be granted by the Treasury Cabinet Secretary through a Gazette notice under section 6. There is no general exemption for low earners, foreign employees or people who already own a home.
Common mistakes and edge cases
- Using the old NSSF limits. From February 2026 the limits are KES 9,000 and KES 108,000. Anyone earning more than KES 72,000 pays more NSSF than in 2025, up to KES 2,160 extra a month. If your January and February payslips differ, this is usually why. To compare, switch the NSSF preset under "More options".
- Taking the levy after tax. Some older spreadsheets still treat the housing levy and SHIF as after-tax deductions and add the 15% housing relief. That rule ended on 27 December 2024 and overstates PAYE.
- Forgetting the SHIF minimum. On gross pay below about KES 10,910, 2.75% is less than KES 300, so SHIF is charged at KES 300.
- Applying the levy to bonuses. KRA's guidance keeps irregular payments such as bonuses, leave allowance and gratuity out of the levy base, though they are still taxable for PAYE.
- Capping the levy. Unlike NSSF, the housing levy and SHIF have no upper limit. A KES 1 million salary attracts KES 15,000 in employee levy.
- Late payment by employers. The levy is due by the 9th working day after the month ends. Late amounts attract a penalty of 3% per month under section 7 of the Act, and the unpaid levy can be recovered as a civil debt.
- Non-residents. Personal relief is for resident individuals. If you are non-resident, untick "Personal relief".
How to check your payslip with this calculator
- Enter your basic salary and the regular cash allowances shown on the payslip.
- Compare the housing levy line first. It should be exactly 1.5% of the gross used for the levy.
- Check SHIF (2.75%) and NSSF against the breakdown. If NSSF is lower, your payroll may still be on the 2025 limits.
- If PAYE is higher than shown, ask payroll whether the housing levy and SHIF are being deducted before tax.
- Use Copy breakdown to paste the figures into an email to HR or your accountant.
Small differences of a few shillings are normal, because payroll systems round each line differently.
Housing levy calculator FAQ
How do I calculate the housing levy in Kenya?
Multiply your gross monthly salary by 1.5%. On KES 60,000 that is KES 900. Your employer pays the same amount again, so KRA receives KES 1,800 in total.
Is the housing levy deducted before or after PAYE?
Before. Since the Tax Laws (Amendment) Act, 2024 took effect on 27 December 2024, the housing levy, SHIF and NSSF are all deducted from gross pay before PAYE is calculated.
Is there a maximum housing levy?
No. The levy is 1.5% of gross salary with no ceiling, so it keeps rising with pay. NSSF is the only statutory deduction with a cap.
Is the affordable housing relief still available?
No. The 15% affordable housing relief ended in December 2024 when the levy became a deduction from taxable income. You cannot claim both.
How much is SHIF on my salary?
2.75% of gross salary, with a minimum of KES 300 a month and no maximum. On KES 100,000 it is KES 2,750. Salaried employees pay it alone; there is no employer share.
What are the NSSF rates from February 2026?
6% from the employee and 6% from the employer, on pay up to KES 108,000. Tier I covers the first KES 9,000 (KES 540 each) and Tier II covers KES 9,000 to KES 108,000 (up to KES 5,940 each). The maximum employee deduction is KES 6,480 a month.
Do bonuses attract the housing levy?
According to KRA guidance on the Affordable Housing Act, irregular payments such as bonuses, leave allowance, gratuity and terminal dues are not part of gross salary for the levy. They are still subject to PAYE.
When must employers remit the housing levy?
By the 9th working day after the end of the month in which the salary was paid, the same deadline as PAYE. Late payment attracts a penalty of 3% of the unpaid amount for each month.
Has the PAYE tax-free band changed in 2026?
Not yet. Treasury has proposed raising the zero-tax point from KES 24,000 to KES 30,000, but the change was left out of the Finance Bill 2026 and still needed a separate bill as of September 2026. This housing levy calculator uses the bands in force today.
Rates verified: October 2026, against KRA public notices on the Affordable Housing Levy and on PAYE under the Tax Laws (Amendment) Act, 2024, the Ministry of Health SHIF notice, and NSSF Year 4 guidance from RSM Eastern Africa. This page is an estimate and not legal or tax advice. Confirm your figures with your employer, KRA or a qualified tax adviser.