The Federation of Kenya Employers (FKE) has raised concerns about the increasing number of salary deductions that have exceeded the legal threshold.
Speaking during a press briefing on Friday, January 24, FKE CEO Jacqueline Mugo noted that the deductions had pushed many employers and employees into financial distress.
“Since the new payroll deductions were introduced, we have received numerous distress calls from both employers and employees. The take-home pay has become too low, falling below the one-third threshold stipulated by the law,” she stated.
Mugo revealed that some employers were being forced to increase their employees’ salaries to meet legal requirements.
“Our concern is that employers are struggling to comply. By law, no more than two-thirds of an employee’s salary can be deducted each month. However, due to the level of deductions, employers are finding themselves inadvertently in breach of this rule,” she explained.
Mugo also highlighted the growing burden on employees, who are left with significantly reduced take-home pay. She warned that the situation was negatively impacting living standards across the country.
“The living standards of employees are deteriorating. The deductions are currently pegged on total earnings, unlike in the past when they were based on basic pay. This shift has worsened the financial strain on workers,” she added.
To address the issue, FKE announced plans to engage with relevant government offices to seek relief for workers and employers.
“We have requested a review of the deductions and proposed a return to pegging them on basic pay rather than total earnings. A review of the policy approach is urgently needed to ease the burden on Kenyans,” Mugo stated.
The federation emphasized the need for swift action to safeguard the financial stability of employees and compliance among employers.
