- Data from the Kenya National Bureau of Statistics (KNBS), set to be released next week, will show that top earners increased by 3,178 members with the 4.1 percent growth outpacing all the other income groups whose ranks rose by a range of 0.3 percent to 3.8 percent.
- Those earning more than Sh100,000 accounted for 2.89 percent of the 2.89 million formal workers captured in the Kenya Revenue Authority (KRA) database.
- The top income earners include professionals with several years of experience, State officers, managers and individuals with one or more postgraduate qualifications.
- At a minimum of Sh100,000, their pay is nearly six times the gross monthly per capita income of Sh16,833.
The number of employed Kenyans earning more than Sh100,000 per month rose by 4.1 percent last year to hit 79,982, recording the highest growth among salaried workers although the growth is also likely to further entrench income inequality.
Data from the Kenya National Bureau of Statistics (KNBS), set to be released next week, will show that top earners increased by 3,178 members with the 4.1 percent growth outpacing all the other income groups whose ranks rose by a range of 0.3 percent to 3.8 percent.
Those earning more than Sh100,000 accounted for 2.89 percent of the 2.70 million formal workers captured in the Kenya Revenue Authority (KRA) database.
Top income earners
The top income earners include professionals with several years of experience, State officers, managers and individuals with one or more postgraduate qualifications.
At a minimum of Sh100,000, their pay is nearly six times the gross monthly per capita income of Sh16,833.
Nearly three quarters or 74.58 percent of formal sector workers earned below Sh50,000, reflecting the income inequality. The earnings inequality has partly been attributed to the previous centralised system of government, which guided sharing of resources since independence.
The devolved system of government, which took off in 2013, raised hopes of addressing the economic imbalance, as analysts say there is a need to offer incentives to attract private investors to counties and spread wealth.
KRA has consistently questioned data showing a measly 2.8 percent of workers are paid Sh100,000 and above, pointing to a larger share of high income earners whose lifestyles are not in tandem with the taxes they pay or their declared income.
The taxman says a sharp increase in imports of luxury items and multi-million-shilling investments in real estate have opened its eyes to a potentially massive tax leakage, which if tapped could yield billions of shillings in additional revenues to the Exchequer.
KRA’s argument is supported by the fact that only a few Kenyans have officially registered as belonging to the high-income earners’ bracket despite the growth in conspicuous consumption in areas such as Nairobi. The taxman reckons there are workers who earn extra cash from ventures such as real estate, dividends and royalties, but fail to declare the additional income.
Men dominate the top wage bracket as they do in other levels, the data shows.
About 63.4 percent of men or 50,749 of them earned more than Sh100,000 compared to 29,233 women in this club, a gap of 21,516, which is roughly maintained in the other income bands.
The highest-paying jobs are concentrated in the private sector, which had 68,526 professionals or 85 percent of all the top earners.
The public sector, including parastatals, the national and county governments, employed 11,456 of those taking home the largest pay cheques.
The education sector accounted for the largest share of those earning above Sh100,000 at 22 percent or 17,808 individuals, representing lecturers, administrators and high school teachers among others.
Financial services were second and accounted for 11,598 or 14.5 percent of the top earners, followed by wholesale and retail trade and repair of motorcycles and motor vehicles whose number stood at 10,909 or 13.6 percent.
Agriculture, which accounts for a third of Kenya’s GDP, trailed among the top-paying sectors with only 3.7 percent of the share of those paid above Sh100,000.
Three-quarters of Kenyans earn a monthly salary of below Sh50,000, according to the data.
At two million at the end of 2018, they include minimum wage workers such as domestic servants and professionals such as drivers, secretaries and some ranks of teachers and police officers.
The typical Kenyan employees, those paid between Sh20,000 and Sh29,999 per month, are represented in this group with a population of one million or 36.3 percent of the total salaried workforce of 2.7 million. It also includes the largest absolute number of employees of 781,964 with an income band ranging from Sh30,000 to Sh49,999 which can be considered the start of the lower middle class earnings threshold. This group has expanded the most in the past five years, adding 113,615 over the period.
The two million workers earning up to 49,999 are the most critical for the economy, accounting for a large share of aggregate demand for goods and services. Most of these employees spend the bulk of their incomes on necessities such as food, housing, clothing, education and minor discretionary items such as entertainment.
Higher-income households tend to save more of their earnings while also spending on luxury items such as cars and holidays.
The data shows that those paid between Sh50,000 and Sh99,999 per month form the next largest segment with a population of 623,228. This category includes most entry-level jobs for university graduates in diverse sectors such as banking, manufacturing, telecommunications as well as the civil service. They form the majority of the middle class whose growth has sparked a consumerism culture as seen in the expansion of global luxury goods brands, including cars, premium alcohol, fashionable clothing and smartphones. Their ranks have grown by 86,992 members over the past five years.
About 72,000 employees are paid below the per capita income level of Sh16,833, with the raising of the minimum wage over the years elevating more workers above this income level. Cashiers, drivers and clerks, for instance, have seen their pay set above Sh19,000 by the law. Kenyans earning between Sh15,000 and Sh19,999 saw their ranks rise by the smallest margin in the review period. Their numbers stood at 202,508 at the end of last year compared to 201,722 in 2017, an increase of just 786 or 0.38 percent.
The actual labour earnings across the country remain unclear, with most Kenyans employed in the informal agricultural sector. In total, however, the private sector has been doling out the biggest pay cheque in excess of Sh1 trillion last year or more than 70 per cent of the total wage earnings. This underlines the critical role of companies in creating and sustaining earnings from employment.