Housing Levy Calculator Kenya (2026) | 1.5% KRA Deduction Tool
Patrick Buyela - Kenya Payroll Expert
Verified by Patrick Buyela, Payroll Consultant · Updated March 2026

Housing Levy Calculator Kenya (2026)

Ensure compliance with the Affordable Housing Act 2024. Our 2026 tool instantly computes the mandatory 1.5% employee deduction and the matching 1.5% employer contribution based on total gross monthly earnings.

Emoluments
KES

Pro Tip: Under the KRA iTax Portal, this levy is an allowable deduction. It is subtracted from your gross pay before PAYE tax is calculated.

Contribution Summary
Base Gross Income
KES 0
Employee Portion1.5% Mandatory Deduction
- KES 0
Employer Match1.5% Statutory Obligation
+ KES 0
Total KRA Remittance (3.0%)
KES 0

Legal Framework: The Affordable Housing Act 2024

The Affordable Housing Levy (AHL) is a statutory requirement for all salaried persons in Kenya, managed by the Kenya Revenue Authority (KRA). Officially regularized under the Affordable Housing Act 2024, the funds are dedicated to the development of affordable housing and associated social infrastructure as outlined by the State Department for Housing.

How the 1.5% Housing Levy is Calculated

The levy is calculated as a flat percentage of the employee's "Gross Income." This includes the basic salary plus any regular cash allowances. Unlike NSSF contributions, there is no upper earnings limit or cap for the Housing Levy.

Statutory Compliance Table (2026)

Contributor Rate (%) Basis of Calculation UEL / Cap
Employee 1.5% Total Monthly Gross Salary None (Uncapped)
Employer 1.5% Matched to Employee's Gross None (Uncapped)
Combined 3.0% Total Statutory Remittance None (Uncapped)

Important: Housing Levy as an Allowable Deduction

A critical update for 2026 is that the Housing Levy is now classified as an allowable deduction for PAYE purposes. This means that the 1.5% employee contribution is subtracted from your gross salary before your income tax (PAYE) is calculated. This provides a minor reduction in your overall tax burden, similar to how pension contributions work in Kenya's net salary system.

Housing Levy Kenya: Frequently Asked Questions

1. Is the Housing Levy different from NSSF or SHIF?
Yes. While NSSF is for social security and SHIF is for health insurance, the Housing Levy is a specific contribution toward national affordable housing projects. All three are mandatory statutory deductions.
2. Does the levy apply to car and house allowances?
Yes. The 1.5% levy is calculated on your total gross monthly emoluments, which includes basic pay and all taxable cash allowances like house, car, or commuter allowance.
3. What is the deadline for remitting the levy to KRA?
Remittance must be done by the 9th day of the following month. This is typically filed alongside PAYE returns on the iTax portal.
4. What is the penalty for non-compliance?
Employers who fail to remit the levy are liable to a penalty of 2% of the unpaid amount for every month it remains outstanding, as per the Laws of Kenya.
5. Does the levy apply to non-salaried (self-employed) people?
Yes. The Affordable Housing Act 2024 requires non-salaried individuals with income to remit 1.5% of their monthly gross income to the KRA.
6. Can I get a refund of my Housing Levy contributions?
Currently, the law does not provide for a direct cash refund. The contributions are treated as a statutory levy rather than a personal savings account.
7. How does this affect my take-home pay?
The levy reduces your net salary by 1.5% of your gross. However, because it is an allowable deduction, it slightly lowers the PAYE you pay. Use our PDF Report above for a full breakdown.

Overwhelmed by Kenya's Payroll Changes?

Ensuring compliance with the 2026 KRA bands, tiered NSSF, and the Housing Levy is complex. Two Max Group offers expert payroll processing services to automate your statutory filings.

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