Affordable Housing Levy Kenya — What It Is and What You Pay
Introduction
If you have looked at your payslip recently, you may have noticed a deduction called:
Affordable Housing Levy (AHL)
Many employees immediately ask:
- What is this deduction?
- How much am I paying?
- Who pays it?
- Why is it deducted from my salary?
The Affordable Housing Levy is a mandatory statutory contribution introduced to
support Kenya’s affordable housing initiatives. Employers and employees both
contribute under the current framework. The levy is currently set at 1.5% of gross
salary from the employee and 1.5% from the employer.
What Is the Affordable Housing Levy?
The Affordable Housing Levy is a contribution collected to support affordable
housing programs and related infrastructure under Kenya’s housing framework.
For employees:
- A percentage is deducted from salary
- Employers make a matching contribution
- The employer remits the amounts to the government
How Is the Housing Levy Calculated?
The total contribution attached to an employee equals 3% of gross salary:
- Employee contributes 1.5%
- Employer contributes 1.5%
Monthly Examples
| Gross Salary | Employee Contribution (1.5%) | Employer Contribution (1.5%) | Total |
|---|---|---|---|
| KSh 20,000 | KSh 300 | KSh 300 | KSh 600 |
| KSh 50,000 | KSh 750 | KSh 750 | KSh 1,500 |
| KSh 100,000 | KSh 1,500 | KSh 1,500 | KSh 3,000 |
| KSh 250,000 | KSh 3,750 | KSh 3,750 | KSh 7,500 |
Step-by-Step Example
Suppose Sarah earns:
Gross Salary = KSh 80,000
Calculation:
Employee deduction:
80,000 × 1.5% = KSh 1,200
Employer contribution:
80,000 × 1.5% = KSh 1,200
Total contribution associated with Sarah:
KSh 2,400
Where Does the Money Go?
The levy supports initiatives associated with:
- Affordable housing development
- Housing-related infrastructure
- Housing programs under government frameworks
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Does Everyone Pay It?
The levy generally applies to:
- Employees
- Employers
Self-employed individuals and different employment arrangements can have
different compliance considerations.
Common Mistakes People Make
Assuming the entire 3% comes from the employee
Only 1.5% is deducted from employee salary.
Using net salary instead of gross salary
The levy is calculated from:
Gross salary
not take-home pay.
Confusing the levy with PAYE
PAYE is income tax.
The Housing Levy is a separate statutory contribution.
Frequently Asked Questions
Is the Housing Levy deducted before PAYE?
Treatment can affect taxable income calculations depending on prevailing payroll rules and tax treatment.
Does the employer also contribute?
Yes. Employers currently match employee contributions at 1.5%.
Can the rates change in future?
Yes. Statutory contribution rules can be amended through legislation.
Key Takeaway
The easiest formula to remember:
Employee → Gross Salary × 1.5%
Employer → Gross Salary × 1.5%
If your salary increases, your Housing Levy contribution also increases because the
calculation is percentage-based.
Also read: how PAYE is calculated in Kenya, your full payslip deductions guide, and gross vs net salary explained. See SHA contribution rates for 2026 and how to file KRA iTax returns.
