Public servants face shrinking take-home pay as statutory deductions pile up

A growing share of government employees in Kenya are now left with extremely reduced monthly earnings after multiple statutory deductions pushed their net pay below the legal limit set for minimum take-home salary, raising concern over compliance with labour laws across public institutions.

Payroll reviews from key State bodies such as the Teachers Service Commission (TSC) and National Police Service (NPS) show that deductions linked to the 1.5 percent housing levy, 2.75 percent Social Health Authority (SHA) contribution, and increased National Social Security Fund payments have sharply reduced workers’ disposable income.

Many employees are also servicing personal loans, which has further reduced what they take home at the end of the month.

The Employment Act, 2007, requires that employees must retain at least one-third of their basic salary after deductions. However, audit reports now indicate that a rising number of workers are falling below this threshold as statutory and financial deductions continue to accumulate.

In the year ending June 2025, TSC reported that 6,129 teachers were earning net salaries below one-third of their basic pay. The Auditor-General noted that those affected could expose the commission to “pecuniary embarrassment”.

At the National Police Service, 5,445 officers were recorded as earning below the minimum threshold by June 2025, while payroll checks showed that a total of 36,662 officers were affected at different points during the year.

The police attributed the situation to a series of mandatory deductions introduced within a short period. These included compulsory NSSF contributions from July 2023, the housing levy in August the same year, and SHA deductions introduced in early 2024.

“Most of the officers had committed their salary on servicing other financial obligations. This in effect, pushed their net salary below a third of basic salary,” said the service in the annual report.

Similar cases were reported in other government institutions. The National Land Commission (NLC) indicated that 21 employees were earning below the required threshold, citing statutory deductions and court-ordered child support payments.

“Some employees faced salary deductions due to court-ordered child support. These statutory adjustments significantly raised overall deductions, inadvertently causing certain employees' net pay to drop below the legally required minimum,” explained NLC.

The Salaries and Remuneration Commission (SRC) also reported breaches but did not disclose the number of affected staff. Employees were advised to reorganize their financial commitments.

“The management advised all affected employees to restructure their pending/ongoing financial obligations to comply with the one-third of basic salary rule,” said SRC.

At the University of Nairobi, staff affected by the changes were encouraged to move some financial obligations outside payroll deductions.

“The university has flagged off those affected by the recent changes in statutory legislation and advised them to plan out-of-payroll payments,” said the university in its latest annual report.

Kenya Reinsurance Corporation reported 145 employees earning below the legal limit, while Kenya Medical Supplies Authority and Kenya National Highways Authority also recorded similar cases, though exact numbers were not given.

The situation has sparked debate in Parliament, where some legislators are now calling for changes to the Employment Act, arguing that the one-third rule is becoming difficult to enforce due to rising deductions.

During a Public Accounts Committee session, lawmakers criticized disciplinary measures taken against affected workers at the State Department for Irrigation, which had issued a 14-day ultimatum for staff to fix their financial status.

“What kind of disciplinary action do you intend to take? Fire them? Do you expect them to sell their properties just to offset loans and bring their salaries into compliance? This is simply unfair and inhumane,” asked Funyula MP Wilberforce Oundo.

Separate data on wages shows that real earnings for public servants have continued to decline, falling by 2.2 percent in the year to June 2025 to about Sh600,600 annually, equivalent to Sh50,046 monthly. In 2021, the average monthly pay stood at Sh59,622.