The Affordable Housing Levy in Kenya: An Employer's Guide

Since the Affordable Housing Act 2024, the Affordable Housing Levy is a standing monthly payroll obligation for Kenyan employers, and one with steep penalties for getting it wrong. Here is what you must deduct and remit.

What the levy is

The Affordable Housing Levy is charged on an employee's gross monthly salary at 1.5% from the employee, matched by 1.5% from the employer. So for every employee, the total going to the levy is 3% of gross pay, half deducted, half an employer cost.

Who it applies to

It applies to all employees. The employee share is deducted from gross salary; the employer share is an additional cost on top of payroll, not deducted from the employee.

How and when to remit

The levy is collected by the Kenya Revenue Authority (KRA) and remitted through iTax, by the 9th of the following month. Late payment attracts a penalty of 3% per month on the unpaid amount, which compounds quickly, so timeliness matters.

Common mistakes

• Forgetting the employer's matching 1.5%, budgeting only for the deduction.
• Missing the 9th-of-the-month deadline.
• Not applying it to all employees, or miscalculating on gross vs net.

Stay on top of it

The Housing Levy sits alongside PAYE, NSSF and SHIF, all of which change periodically. See our Kenya payroll guide and the 2026 NSSF rates. If you would rather not manage statutory remittances in-house, our HR outsourcing and HR compliance services handle it accurately and on time.

Official sources: KRA.

Disclaimer: This article is general guidance for educational purposes and is not legal or tax advice. Statutory rates and requirements change. For advice specific to your organisation, speak to a qualified HR, legal or tax professional.