Thousands of employed Kenyans have been forced to take home less salary as the statutory deduction of 2.75 per cent on their gross pay towards the Social Health Authority (SHA) took effect on October 28.
Previously, under the National Health Insurance Fund (NHIF), Kenyans contributed between Ksh500 to Ksh1,700 monthly and between Ksh6,000 and Ksh20,400 annually for the least earning and highest contributors respectively.
However, under the new health insurance scheme, a Kenyan earning Ksh20,000 now faces a monthly salary deduction of Ksh550 while employees earning Ksh50,000 and Ksh70,000 currently undergo a pay cut of Ksh1,375 and Ksh1,925 respectively.
Meanwhile, Kenyans earning Ksh100,000 and Ksh150,000 will have their pay sliced by Ksh2,750 and Ksh4,125 respectively every month while employees earning Ksh200,000 and Ksh500,000 now face salary deductions of Ksh5,500 and Ksh13,750.
Similarly, following the Supreme Court's decision to dismiss the Court of Appeal's pronouncement that declared the Finance Act 2023 unconstitutional, Kenyans will have to grapple with a further increase in salary deductions under the National Social Security Fund (NSSF) and the Housing Levy.
For instance, a Kenyan earning Ksh50,000 in 2024 takes home Ksh39,092 after statutory deductions including Ksh2,160 under the NSSF and a deduction in the housing levy set at Ksh750.
An employee earning Ksh200,000 gross pay currently earns Ksh138,000 in 2024 compared to Ksh146,000 in 2022 following President William Ruto's administration's introduction of new tax measures.
A salaried Kenyan earning Ksh100,000 currently earns Ksh72,000 after statutory deductions compared to Ksh76,000 in 2022. It is worth noting that the decrease in salary earnings excludes other personal deductions.
Previously, the deductions under the Social Health Insurance Fund (SHIF) were planned to take effect on June 30 this year. However, the decision to deduct Kenyans was pushed to October 2024 after a Kenyan filed a petition challenging its rollout.
Nonetheless, the introduction of new salary deductions comes against the backdrop of a recent salary increase for government workers including civil servants, health workers, and teachers.
In September of this year, the government formally announced the decision to increase the salaries of all civil servants following the decision to implement the Collective Bergan Agreement (CBA), which was reached in June.
In a letter issued by the Public Service Commission, the government announced it would increase house allowance for all civil servants, which would be backdated to July this year when the CBA took effect.
