KRA Instructs Employers to Deduct Housing Levy, Warns of Penalties for Non-Compliance

March 22, 2024

The Kenya Revenue Authority (KRA) announced that housing levy deductions for the government’s affordable housing project will take effect from March 19.

On Thursday, the taxman directed employers to deduct 1.5 percent from employees’ gross salaries and remit it together with a matching contribution of 1.5 percent for each employee.

“With effect from 19 March 2024, all employers are required to deduct the affordable housing levy from the employee’s gross salary and remit together with the employer’s contribution as follows: One point five per centum (1.5%) of the employee’s gross monthly salary by the employee; One point five per centum (1.5%) of the employee’s monthly gross salary by the employer,” the tax collector directed.

Furthermore, all other individuals who earn income in Kenya must remit 1.5 percent of their gross income as housing levy to KRA.

The due date for remittance of the levy is the ninth working day after the end of the month.

Employers will process housing levy payments at KRA agent banks or through mobile money using the eCitizen Paybill Number 222 222 or the USSD code *222#.

“Any person who fails to comply with the law shall be liable to payment of a penalty equivalent to three per cent (3%) of the unpaid funds for every month if the same remains unpaid,” warned KRA.

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