Affordable Housing Levy in Kenya: Employer Rates, Deductions and Payroll

What is the Affordable Housing Levy?

Introduced under the Finance Act 2023, the levy is collected to fund affordable housing programmes. The employer deducts the employee’s share from gross salary each month and remits both the employee and employer portions to the Kenya Revenue Authority.

Current AHL rates

• ✓Employee contribution: 1.5% of gross monthly salary, deducted at source.
• ✓Employer contribution: a matching 1.5% of gross monthly salary, paid by the company.
• ✓The levy was revised from the original 3% rate to 1.5% for both parties under the Finance Act 2024 — confirm the current rate on KRA guidance before processing payroll.

How the levy works in payroll

• ✓Compute 1.5% of each employee’s gross salary (including taxable allowances where applicable).
• ✓Deduct the employee share from net pay and record it as a statutory deduction.
• ✓Accrue the employer share as an additional payroll cost.
• ✓Remit both amounts to KRA with your other statutory remittances.
• ✓Qualifying employees may be entitled to Affordable Housing relief against PAYE.

saloPoint automates the Housing Levy

saloPoint calculates the Affordable Housing Levy automatically at the statutory rate, tracks employee and employer portions separately, and includes both in your payroll reports. No manual spreadsheets, no missed remittances.