Payslip crisis: Report outlines bare income mess

Employees are grappling with a major income crisis worsened by increased statutory deductions introduced by the Kenya Kwanza administration.
A new report by the Auditor General shows that payslips of thousands of civil servants, including those working at State House, are in a mess.
Some 47,300 government employees take home less than a third of their pay, which is below the limit set in law.
The Employment Act 2007 requires that every employee must take home at least one-third of their basic salary.
Auditor General Nancy Gathungu says many government institutions have breached the law by disregarding the one-third rule.
The casualties are across the civil service but the most affected are the police.
The report reveals 36,660 police officers get less than a third of their pay.
This means a police officer earning a gross salary of KSh40,000 took home less than KSh13,333.
Apart from the police, other employees of the Ministry of Interior were also had hit with 3,815 workers taking home less than a third of their pay.
Some 2,535 Kenya Prisons Service officers took home less than a third of their gross pay, with another 1,275 officers affected at the Immigration department.
At least 550 staff were affected in the Judiciary, 184 at Treasury, 165 at Foreign Affairs, 111 at Roads department, 100 in the office of Director of Public Prosecutions, 78 at State House, 71 at the National Land Commission, 69 at the Public Service Commission, 20 in office of the Controller of Budget, and 42 in the of­fice of the Deputy President.
Others are 437 at the Social Protection department, 386 at Medical Services, and 222 at TVET department.
The numbers could be higher as the review did not scrutinize state corporations.
The income crisis could even be worse in the private sector.
Economists argue that the statutory deductions, which came midway in the financial year under review, are to blame.
“The statutory deductions that come midway like SHA and housing levy automatically push many beyond the two-thirds. These are a first charge to your payslip,” Kitui Central MP Makali Mulu said.
Mulu, an economist, said the country lacks proper projection of wages to inform taxes and deductions.
“We need to think about what they will be earning at what time. We have also never factored inflation when reviewing salaries.”
The MP said over time, salaries have been raised but not at the rate of inflation.
“We have increased at a lower rate than the inflation rate,” he said.
Mulu said the payslip crisis was an indication that the economy was not doing well, pointing to the high amounts of non-performing loans at the banks.
President Ruto’s administration introduced a raft of new statutory deductions that have squeezed the payslips of employees.
They include the housing levy paid at 1.5 % of basic pay – with the employer topping up the same while SHIF is contributed at 2.75%.
In what portends more pain for employees, NSSF deductions are also set to be enhanced starting 1 March.
The drastic measures, which President Ruto justified on a shrinking spending space, have elicited a huge political discourse.
Opposition chiefs led by Wiper leader Kalonzo Musyoka have launched a campaign they say is aimed at freeing the payslips of Kenyans.
“We have come up with a policy of ‘Okoa Payslip’…Every Kenyan is paying William Ruto up to 50% of what they earn,” the former Vice President said.
Impeached Deputy President Rigathi Gachagua has also been a leading light in the campaign, citing the housing levy as the bane of workers.
In his view, the former DP holds that the levy has no direct bene­ t to the taxpayer, further pointing out that the deductions have reduced Kenyans’ purchasing power.
“I want to give a commitment to all workers that we are seized of the matter and the magnitude of the crisis that faces our workers in the country after their payslips were raided. We will restore the dignity of the payslip,” Gachagua said.
Cases highlighted by Gathungu in the new audit include Parliament where 48 staff earned below a third for various months.
Recently, Mumias East MP Peter Salasya published his June 2024 payslip which detailed the deductions beyond the set threshold.
From his salary of KSh1.16 million, according to the payslip, the MP took home KSh2,364, with deductions taking up almost the entire amount.
Kathiani MP Robert Mbui said the additional deductions by government were to blame, also citing the housing levy as part of the burden.
He argued that civil servants, teachers and other workers were already deep in debt because they were paying for their mortgages.
“When you take away 1.5 % of their salaries and tell them that you are going to build houses for other people, I ­find this very unfair,” the MP said.
The Public Service Commission has cited the high cost of living as hurting public of­ficers leading to low morale, poor performance, and poor social welfare.