The Affordable Housing Levy (AHL) is one of the four statutory deductions every Kenyan employer must handle each month. It is straightforward to calculate, but it catches businesses out in one way: it is a cost the employer shares, not just withholds. Here is what you need to know for 2026.
What is the Affordable Housing Levy?
The AHL is a levy collected under the Affordable Housing Act, 2024 to fund the government's affordable housing programme. It is collected by KRA. Unlike NSSF, it does not build an individual savings balance for the employee — it is a levy, not a personal contribution.
The rate: 1.5% + 1.5%
The levy is 1.5% of the employee's gross monthly salary, matched by the employer at 1.5% — a combined 3% of gross. This is the part employers must plan for: for every KES 100,000 of gross salary, the levy costs the business KES 1,500 on top of the KES 1,500 withheld from the employee.
- Gross KES 30,000 → employee 450, employer 450
- Gross KES 100,000 → employee 1,500, employer 1,500
Who does it apply to?
The levy applies to all employees on gross pay, regardless of whether they ever participate in a housing unit allocation. There is no cap and no minimum band — it is a straight percentage of gross.
The Housing Levy and PAYE
For the 2026 payroll year, the employee's 1.5% levy is treated as an allowable deduction that reduces taxable pay before PAYE is calculated, alongside NSSF and SHIF. Note that the treatment of the levy for tax purposes has shifted since it was reintroduced, so this is an area to confirm against current KRA guidance rather than assume from prior years.
Remittance
The levy is remitted to KRA by the 9th of the month following the payroll month. Like PAYE, late remittance attracts penalties, so it belongs in the same monthly compliance run as your other statutory deductions.
The employer's real cost
Because the employer matches the levy, it is a genuine addition to your staffing budget — 1.5% of your entire gross payroll every month. For a business with a KES 2,000,000 monthly payroll, that is KES 30,000 in employer levy alone. It is easy to overlook when budgeting headcount.
How Force HRM handles the Housing Levy
Force HRM calculates both the employee and employer sides of the levy automatically on every run and rolls it into the same statutory output as PAYE, NSSF and SHIF — so nothing is missed and nothing is remitted late. See how Force HRM keeps you compliant.
The tax treatment of the Affordable Housing Levy has changed recently and remains subject to KRA clarification. Figures here are current for 2026 — confirm against current KRA guidance before filing.