Affordable Housing levy Kenya

On 15 August 2023, the Kenya Revenue Authority (KRA) provided a clarification on what constitutes Gross pay for purposes of computing the Affordable Housing levy Kenya (AHL)

The levy is deductible from employees at 1.5% of the gross pay with the employer contributing a similar amount.

KRA have clarified that gross pay constitutes regular payments such as Basic Salary, Cash allowances such as Car allowance, House allowance, Travel allowances among other regular cash payments.

Affordable Housing levy

Additionally, it makes it clear that non-regular cash payments like leave allowances, bonuses, gratuities, pensions, severance compensation, or any other terminal dues and benefits are not included in gross pay for determining the housing levy.

In addition, all employees irrespective of their contracts with the employer are eligible for Housing levy.

Lastly all taxpayers paying housing levy under Section 31B of the Employment Act are not eligible for Affordable Housing Relief under the Section 30A of the Income Tax Act Cap. 470.

affordable housing levy

Affordable Housing levy Kenya Way forward:

Employers, who had overpaid the housing levy in the July payroll, should consider recovering the same in the August payroll.

For those who have already processed their August payrolls , where applicable, they may need to re-run the payroll for purposes of calculating the correct housing levy and ensure the correct net pay is paid.

For more information or explanations, kindly visit the link AHL- KRA and feel free to contact us at the following email addresses:


  • [spcd_display]