NEW SALARY DEDUCTIONS FOR KENYANS

Salaried workers in Kenya will this month receive reduced pay. This is after the National Assembly and the National Treasury sneaked in last minute tax adjustments that will now cut salaries by up to six per cent.

According to a report that appeared in the Daily Nation on Friday, a maximum 30 per cent tax rate has been added to any salary amounts that are above Sh. 32,333.

“The new law comes with just three tax bands from the initial five. Now, it will just be 10 per cent for the first Sh. 24,000, then 25 percent for the next Sh. 8,333 and thereafter any remaining amounts above Sh. 32,334 will now be taxed at the maximum 30 percent,” the report by the Daily Nation said.

It added that an employee who earns Sh. 25,000 will continue earning a net of Sh. 24,750. An employee earning Sh. 50, 000 a month will take home Sh. 42,617, a small reduction from the Sh. 45,633 in December. Those earning Sh. 100,000 will take home Sh. 77,617 compared to Sh. 82,200 in December. Employees earning Sh. 200,000 will have the taxman take away about Sh. 52,000 in taxes and will be left with Sh. 147,617 in net salary. In December, their net was Sh. 152,200. For those earning Sh. 500,000, the taxman will take away about Sh. 142,000 to leave them with Sh. 357,617 in net pay. This is down from Sh. 362,200 in December,” the report said.

These cuts come shortly after the government introduced mandatory contributions to the pension savings scheme. The more than 530,000 civil servants will in January 2021 have their take-home reduced by 7.5 percent. “The employees attached to ministries and State agencies will see a portion of their salaries sliced for onward remittance to the soon to be created Public Service Superannuation Scheme (PSSS). This means that State workers will cede about Sh. 2.4 billion monthly or Sh. 28 billion to the fund that will emerge as Kenya’s largest pension scheme,” a report on these deductions said.

By Bizna Kenya