Your salary will not be deducted, here is the truth

News has spread that employers will be deducting 1.5pc levy beginning next month for housing fund for the Jubilee administration.

The Federation of Kenyan Employers has disapproved a Gazette notice by the Principal Secretary Housing and Urban Development Charles Hinga requiring employers to deduct 1.5 per cent of an employee’s salary towards the Housing Fund by the 9th of every month.

In a statement shared on their Facebook page, the umbrella body of employers in the country has called the notice unlawful since the matter is still in court and a decision is yet to been made.

“The Federation of Kenya Employers (FKE) were in Court on the April 8, 2019 where they obtained an extension of the court orders suspending the implementation of the levy up to the 20th of May 2019 when the case will come up again for mention and further directions,” reads the statement shared on FKE’s Facebook page.


The post came hours after a local media houses published a notice by the Ministry of Transport, Infrastructure, Housing, Urban Development, and Public Works in conjunction with Kenya Revenue Authority (KRA), giving room to implement the Housing Fund Levy.

“Our attention has been drawn to the Public Notice published in today’s Daily Nation Newspaper under the headline Housing Fund Levy,” read the statement.

The notice by the Ministry in conjunction with KRA has issued a go-ahead on the implementation of the Housing Fund Levy with effect from May 9, 2019.

The Housing Fund Levy is expected to finance the Affordable Housing Scheme, which is one of the government’s “Big Four’ agenda. Employers are also required to match the employee deductions with a further 1.5 per cent under the National House Development Fund on a monthly basis.

These contributions will assist in the deliverance of President’s Uhuru’s pledge of delivering 500,000 houses in the next five years.

Kenya requires more than 250,000 housing units per year to reach the goal that is currently against the average of 50,000 units per year to be delivered by government and private developers.

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