How House Levy With Arrears Will Affect August Payslip
Due to the government’s intended implementation of a double deduction of the necessary housing levy, teachers, government employees, and other workers may experience a decrease in their August paychecks.
The Ministry of Lands, Public Works, Housing and Urban Development has taken a risk by releasing a public notice that dates the fee back to July 1.The disputed affordable housing levy requires employees to contribute 1.5% of their gross monthly pay and their employers to match that amount.
The backdating of the contributions means that employees’ pay will be decreased by 3% while businesses get ready to execute the compulsory deductions.
The Finance Act 2023 states that “the levy is payable by the employee and employer at a rate of one and five percent of the employee’s gross monthly salary by the employee and one and five percent of the employer.”
In order to cover the months of July and August, employers will be required to match the 3% that employees are required to donate from their paychecks.
A worker with a monthly gross pay of Sh50,000 will have lost Sh1,500 as a result of the housing levy by the end of August.
For more information, see TSC to consult Ministry of Education before promoting or transferring teachers.
For individuals earning Sh100,000 or more, the price for July and August would be Sh3,000.
Those earning a monthly gross wage of Sh200,000 will forfeit a total of Sh6,000 to cover the two months.
The administration claims that the levy will be used to provide affordable housing for people with low incomes.
The government reduced the monthly housing cost for employees from 3% to 1.5% in response to a huge public uproar.
“If we feel the pain of the three percent, we are living. Kenya has seven million slum dwellers who are among the millions of young people hunting for employment. On June 7, Ruto said, “If we feel their pain, then we are human.
The charge was converted into a tax and is currently being collected by the Kenya Revenue Authority along with other charges.
Additionally, employees would not be able to transfer their payments to their spouse or children, as was originally anticipated before the measure was enacted by Parliament.
They will be allowed to distribute their contributions after seven years.
The law states that each employee’s monthly payment must be set aside by the employer no later than nine working days after the end of the month for which the payments are due.
The amount includes both the employer’s and the employee’s payments.
For each month that the unpaid payment is not obtained, employers who violate the housing levy provision are subject to fines equal to 2% of the outstanding sums.
How House Levy With Arrears Will Affect August Payslip
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