For every Sh1,000 earned by more than 960,000 public sector workers in the year ended June 2023, they made Sh400 in allowances.
This is the highlight of the growing burden of allowances in the public wage bill, with data showing that public sector workers consumed Sh1.25 trillion in allowances in three years to June 2023.
Between July 2020 and June 2023, the workers, who increased from 923,000 to 960,000 in national and county governments, earned an average of Sh416 billion in allowances every year.
Constituting the Sh1.25 trillion allowances over the three fiscal years to June 2023 are house and commuter allowances of Sh600 billion, Sh200 billion for hardship and annual leave, Sh125 billion (travel) and Sh324 billion in others classified under remunerative and facilitative categories.
Of the Sh324 billion, the government spent Sh175 billion on allowances classified as “other facilitative allowances” which means that they are not accounted for on the payslip, and don’t fall within the realms of Daily Subsistence Allowance (DSA) and travels.
In the year ending June 2023, allowances accounted for Sh440 billion, against Sh660 billion that was paid to 960,000 workers as basic salary, giving a Sh1.1 trillion wage bill. On the surface, this means that for every Sh1.5 that each worker in national and county governments earned as a basic salary, they made Sh1 in allowances.
The Salaries and Remuneration Commission (SRC), however, maintains that it remains steadfast in cracking down on unchecked payment of allowances, which has seen the taxpayer lose billions of shillings.
“Through the streamlining allowances framework that was developed, the commission has saved Sh17.3 billion over four years by implementing phase one and phase two of the streamlining of allowances,” SRC chairperson Lyn Mengich said during the first day of the National Wage Bill Conference on Monday.
The SRC is streamlining allowances in the public service following a finding during the 2019 wage bill conference that about 247 allowances were being paid. Most of these were duplicated and unsupported, leading to a loss of public money.
The SRC has since 2022 advised public entities on the payment of allowances, a process that culminated in the scrapping of some, including sitting allowances for MPs during plenary sittings and others for task forces.
The data on the proportion of allowances to Kenya’s public wage bill shows that over the three years to June 2023, allowances averaged Sh413 billion.
Basic salary
The Sh440 billion allowances in the 2022/23 fiscal year were almost equal to the Sh473 billion the national government spent on development projects during the year and was more than the Sh429 billion all the county governments received as an equitable share of revenues.
“Allowances make up about 40 percent of the Sh1.1 trillion public sector wage bill. These allowances are classified into remunerative and facilitative categories. Basic salary takes up about Sh660 billion and House and Commuter allowance takes up about 30 percent,” said SRC commissioner, John Monyoncho.
