Last reviewed – 26 February 2025
The Affordable Housing Levy (AHL) was initially introduced in July 2023 but was nullified by the courts in November 2023. It was later reintroduced under the Affordable Housing Act, 2024, and became effective in March 2024.
1. Who Must Pay the AHL?
2. AHL Contribution Rates
| Category | Rate |
|---|---|
|
Employee Contribution
|
1.5% of gross monthly salary
|
|
Employer Contribution
|
1.5% of employee’s gross monthly salary
|
|
Self-Employed / Non-Salaried
|
1.5% of gross income
|
3. Payment & Remittance Timeline
✔ Deadline for Payment: Within 9 working days after the end of each month.
✔ Late Payment Penalty: 3% of the unpaid amount per month until settled.
4. What Constitutes ‘Gross Monthly Salary’?
Includes:
Excludes:
5. Tax Deductibility & Compliance
The Tax Laws (Amendment) Act, 2024 now allows employees to deduct AHL contributions for PAYE purposes, reducing their taxable income.
Employers must deduct, remit, and maintain proper records for compliance with the law.
6. Summary of Employer Responsibilities
Conclusion
The Affordable Housing Levy aims to fund housing projects and improve access to affordable homes in Kenya. Employers and individuals must comply with the new remittance rules to avoid penalties.
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