KRA says Affordable Housing Levy Deductions to start on the 19th

The Kenya Revenue Authority (KRA) has today announced that the new Affordable Housing Levy (AHL) deductions will start from 19th March 2024.

Under the new levy, all employers must deduct 1.5% from each employee's gross monthly salary. The employer then has to match this amount, by contributing another 1.5%. Therefore both the employer and employee pay 1.5%.

For example, if an employee earns 50,000 Kenyan shillings per month before deductions, the employee will pay 750 shillings (1.5% of 50,000) as the housing levy. The employer will also pay 750 shillings.

Self-employed individuals also have to pay the 1.5% levy from their gross monthly income.

The deadline for remitting the affordable housing levy is the 9th working day after the end of the month when salaries were paid or income was received.

Resident individuals who pay the housing levy will be eligible for an affordable housing tax relief.

Those who fail to pay the levy on time will be subject to a penalty of 3% of the Affordable Housing Levy amount owed.

KRA states the levy aims to support affordable housing projects by collecting funds from both employees and employers.