Last updated: 25 June 2026
The Affordable Housing Levy, often shortened to AHL or Housing Levy, is a monthly payroll item that affects both employees and employers in Kenya. It should be visible in payroll calculations because it reduces employee net pay and increases employer payroll cost.
Basic AHL planning rate
For payroll planning, the employee Housing Levy is estimated at 1.5% of gross monthly salary. The employer also contributes 1.5% of gross monthly salary. That means the employee deduction and employer cost should both be reviewed before payroll is finalised.
Simple example
If an employee earns KSh 100,000 gross salary, a simple estimate would be:
- Employee AHL: KSh 1,500
- Employer AHL: KSh 1,500
- Total AHL remittance estimate: KSh 3,000
Why AHL affects payroll planning
AHL is easy to underestimate because many business owners focus on employee deductions only. The employer contribution matters for budgeting because it is an additional cost on top of gross salary, employer NSSF, NITA where applicable and other benefits.
Monthly employer checklist
- Confirm gross salary for each employee.
- Calculate employee AHL.
- Calculate employer AHL.
- Review the impact on PAYE, net pay and employer cost.
- Keep the AHL schedule and payment evidence in the payroll folder.
The Reworked Kenya Net Pay Calculator includes employee AHL and employer cost estimates. For monthly payroll support, contact Reworked at info@reworked.co.ke.
Disclaimer: This article is for guidance only. Statutory rates and deadlines may change, so confirm final obligations before filing or paying.
Employer questions
Affordable Housing Levy questions
Review both the employee deduction and the employer contribution when planning payroll cost.
What is the Affordable Housing Levy rate for employees?
KRA states that the employee contributes 1.5% of gross monthly salary and the employer contributes a further 1.5% of the employee's gross monthly salary.
When is Affordable Housing Levy due?
KRA gives the remittance deadline as the 9th working day after the end of the month in which the salary was due.
Does Housing Levy affect PAYE taxable income?
KRA includes the employee Affordable Housing Levy among amounts deductible when determining taxable employment income. Apply the current employer guidance and the employee's actual payroll details.
Is the employer contribution deducted from the employee?
No. The employee deduction and employer contribution are separate. The employer contribution is an additional employment cost and should not reduce the employee's pay.