Understanding Your Payslip Kenya

Reading Your Kenyan Payslip

Your payslip is a detailed record of your earnings and deductions for a given pay period. Understanding each line item helps you verify that your salary is calculated correctly and that the right statutory deductions are being made. Here is a breakdown of what you will typically find on a Kenyan payslip.

Earnings Section

The top section of your payslip shows all the money you earn before deductions:

• Basic Salary: Your core monthly pay as agreed in your employment contract. This is the foundation for most calculations.
• House Allowance: A taxable allowance to help cover housing costs. Common in many Kenyan employment contracts.
• Transport Allowance: An allowance for commuting to work. Taxable unless specifically exempted.
• Other Allowances: May include airtime, lunch, hardship, or any other contractual allowances.
• Overtime: Additional pay for hours worked beyond your normal schedule, calculated based on your overtime rate.
• Gross Salary: The total of your basic salary plus all allowances and overtime before any deductions.

Statutory Deductions

These are mandatory deductions required by Kenyan law:

• NSSF (Employee): Your contribution to the National Social Security Fund, calculated on Tier I and Tier II.
• Housing Levy (Employee): Your 1.5% contribution to the Affordable Housing Levy.
• SHIF: Your contribution to the Social Health Insurance Fund at 2.75% of gross salary.
• PAYE: Pay As You Earn income tax calculated on your taxable income after NSSF and Housing Levy deductions, minus personal and insurance relief.

Other Deductions

These are non-statutory deductions that may appear on your payslip:

• Loan Repayment: Monthly installments for salary advances or staff loans.
• SACCO Contributions: Voluntary savings and credit cooperative deductions.
• Medical Insurance: Employee portion of private medical insurance premiums.
• Pension: Contributions to a private pension scheme beyond NSSF.

Net Pay

Your net pay (take-home pay) is calculated as: Gross Salary minus all statutory deductions minus all other deductions. This is the amount deposited to your bank account or sent to your M-Pesa.

Employer Contributions

Some payslips also show employer contributions that are not deducted from your salary but are paid by your employer on your behalf. These include the employer's NSSF contribution and the employer's Housing Levy contribution.