The mechanics
The Affordable Housing Act 2024 charges 1.5% of gross monthly salary from the employee, matched by 1.5% from the employer. Gross means gross: basic pay plus regular cash allowances, before any deductions.
Tax treatment
The employee's levy contribution is deductible from taxable income before PAYE (since December 2024, replacing the earlier 15% relief). The employer's side is a deductible business expense.
Remittance and penalties
Collected by KRA with PAYE, due by the 9th of the following month. The Act imposes a penalty of 3% of the unpaid amount for every month it stays unpaid — the steepest penalty curve of the four statutory deductions.