Kenyan teachers employed by the Teachers Service Commission (TSC) are in for some good news as 2023 nears its end. This December, salaries will be credited into bank accounts earlier than usual, offering teachers a timely boost for the festive season.
The payroll processing was completed ahead of schedule, and funds are expected to reflect before the end of the week.
Additionally, all third-party deductions, such as union dues, insurance premiums, HELB repayments, and bank loans, have already been processed. This proactive step ensures teachers can enjoy their festive break without any unexpected financial surprises.
As 2024 begins, teachers can look forward to another financial benefit: annual leave allowances. These allowances will be disbursed alongside January salaries and are calculated based on job groups, as outlined in the 2021–2025 Collective Bargaining Agreement (CBA).
Here’s an overview of the annual allowances for different job groups:
- B5: Ksh 4,000
- C1: Ksh 4,000
- C2: Ksh 6,000
- C3: Ksh 6,000
- C4, C5: Ksh 6,000
- D1-D5: Ksh 10,000
After the typically high expenses of December, these allowances will provide much-needed relief and help teachers start the new year with greater financial stability.
While December and January bring financial cheer for teachers, February 2025 will usher in adjustments to statutory deductions as the government enforces higher contributions under the NSSF Act of 2013.
Here’s what teachers and other employees across Kenya need to know:
- Employees will contribute 6% of their gross salary to the National Social Security Fund (NSSF).
- The monthly cap has been doubled from Ksh 2,160 to a maximum of Ksh 4,320.
- Employers are legally required to match this contribution.
For instance, at a gross salary of Ksh 40,000, combined deductions from NSSF, PAYE, the Housing Levy, and Social Health contributions could reduce take-home pay by over Ksh 8,000. Those earning higher salaries, such as Ksh 50,000 or Ksh 70,000, will feel an even larger deduction.
The NSSF Act has been in place since 2013 but faced years of legal challenges. A 2022 court ruling finally allowed its implementation.
The government began a phased rollout in 2023, and February marks the next significant step in enhancing retirement benefits and boosting pension contributions for Kenyan workers.
While these changes may strain finances in the short term, they aim to secure better post-retirement financial stability for workers.
The upcoming NSSF adjustments align with the government’s broader mission to increase revenue. Parliament is reviewing several tax-related bills, such as:
- Tax Procedures (Amendment) Bill
- Tax Laws (Amendment) Bill
- Business Laws (Amendment) Bill
These proposals, spearheaded by Molo MP Kuria Kimani, are designed to close the national budget gap. While they aim to boost the country’s finances, they may affect net income for Kenyan workers.
December’s early salaries and January’s leave allowances bring a welcome financial reprieve for teachers, enabling them to enjoy the festive season and plan for the new year. However, the higher statutory deductions beginning in February will require careful budgeting to manage the reduced take-home pay effectively.
For now, teachers can celebrate a financially positive end to 2023 and a hopeful start to 2024. With planning, they can also prepare to navigate the changes that 2025 will bring. Regardless of the challenges ahead, the festive season offers an opportunity to recharge and focus on what truly matters.
