Employers’ headache as pay deductions cross two thirds

DNFKEAGM2907g

The executive director and CEO of the Federation of Kenya Employers (FKE), Jacqueline Mugo. FILE PHOTO | NMG

More salaried workers with pre-existing loan repayment obligations have in recent months seen their take-home pay shrink past the legally recommended level after statutory and tax deductions — presenting a compliance headache for employers and financial institutions.

The Employment Act, 2007 prohibits employers from deducting more than two-thirds of the basic pay of an employee to safeguard their rightful gains from employment.

PAYE Tax Calculator

Note: The results are not exact but very close to the actual.