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Public servants pocketed extra Sh43bn in pay deal
The pay rise for public servants sharply contrasts with the fortunes of workers in the private sector, where firms have largely kept a lid on salaries amid a tough economic climate and mounting statutory deductions.
Public service employees took home an additional Sh43.1 billion in the year that ended on June 30, 2025, mainly due to salary agreements approved by the Salaries and Remuneration Commission (SRC), handing them a major boost amid the rising cost of living.
Disclosures by the SRC show that 84 percent of the pay boost, or Sh36.45 billion, was disbursed between April and June this year.
The improved pay is timely for civil servants, given the rising cost of living that has forced many households to trim spending. Inflation, a measure of the cost of living, has been on a sustained rise in recent months, hitting 4.5 percent in August on higher food and transport costs. This was the highest rate since June 2024, when it reached 6.2 percent.
Public servants have intensified their push for higher pay through Collective Bargaining Agreements (CBAs), reviews of allowances and benefits, job evaluations, and rewards tied to productivity and performance.
“During the financial year 2024/2025, the estimated cost implication of the 289 requests received by SRC from public service institutions was Sh70.95 billion. Upon evaluation, SRC recommended approvals with an estimated financial implication of Sh43.19 billion (60.9 percent of the total amount requested),” the SRC said.
CBAs accounted for 93 percent (Sh34.1 billion) of the pay rise approved in the full financial year, followed by job evaluation at Sh2.04 billion, or 5.6 percent of the total.
The current inflation rate of 4.5 percent is the highest in at least a year, underscoring why salary increments are critical. The SRC has repeatedly defended the pay adjustments, arguing that they are necessary to cushion workers from the sting of inflation.
SRC noted that it received a total of 174 requests on allowances and benefits, 44 on CBAs, 22 on productivity and performance, and 49 on job evaluation and salary structures between April and June.
Approval of the Sh43.1 billion pay rise in that quarter was also a timely boost for public servants, given that SRC had failed to act on 174 requests submitted in the three months to March.
A lack of quorum, caused by the exit of seven commissioners whose terms had expired, triggered the delay in processing those requests.
The pay rise for public servants sharply contrasts with the fortunes of workers in the private sector, where firms have largely kept a lid on salaries amid a tough economic climate and mounting statutory deductions.
Monthly contributions to the Social Health Insurance Fund and the National Social Security Fund were recently raised, eating into workers’ pay slips. Additionally, the housing levy has further strained household incomes.
SRC and the Treasury have separately raised concerns over the inability to rein in the runaway public sector wage bill, which is projected to hit Sh1.245 trillion in the year ending June 2025, up from Sh987.7 billion four years ago.
The public service wage bill now accounts for 40.6 percent of ordinary revenue, significantly higher than the 35 percent cap recommended in the Public Finance Management Act, 2015. The ballooning wage bill has squeezed funds available for development projects.
