What is the mandatory Housing Allowance in Kenya?

In Kenya, employers are legally required to provide a housing allowance to employees unless suitable accommodation is already provided. This regulation ensures that employees have adequate financial support for housing as part of their compensation package.


Key Points about the Housing Allowance:

1. Housing Allowance Rate

  • Employers must provide a housing allowance equivalent to 15% of the employee's basic salary if they do not offer suitable accommodation.

2. Basic Salary Basis

  • The 15% housing allowance is calculated based on the employee's basic salary only, excluding any bonuses, commissions, or other benefits.

3. Legal Compliance

  • The housing allowance is mandated by Kenyan labor laws and must be clearly itemized on the employee's payslip. 

4. Exemptions

  • Employers who provide adequate housing that meets legal standards are exempt from paying the housing allowance.

5. Who It Applies To

  • The housing allowance applies to all employees, regardless of their job level, as long as they are not provided with accommodation by their employer.


Example of Housing Allowance Calculation:

If an employee earns a basic salary of KES 50,000, the housing allowance would be calculated as follows:

Housing Allowance=15% of 50,000=KES 7,500\text{Housing Allowance} = 15\% \text{ of } 50,000 = \text{KES } 7,500Housing Allowance=15% of 50,000=KES 7,500

In this case, the employer must either provide suitable accommodation or include a housing allowance of KES 7,500 in the employee's monthly pay.


Was this article helpful?

That’s Great!

Thank you for your feedback

Sorry! We couldn't be helpful

Thank you for your feedback

Let us know how can we improve this article!

Select at least one of the reasons
CAPTCHA verification is required.

Feedback sent

We appreciate your effort and will try to fix the article