How Teachers’ Payslip Will Look From This Month
As a result of the government’s announcement of a 7–10% increase in net compensation, teachers and civil servants will receive slightly modified pay stubs, as the government plans to retroactively implement both the new monthly pay and the taxes introduced by the Finance Act of 2023.
They will be required to pay the new taxes on their newly increased compensation for the months of July and August 2023, despite the fact that the taxes are not yet in effect.
This retroactive application of new salaries and taxation is likely to have a substantial impact on the take-home pay of government employees.
In the future, a civil servant earning Ksh100,000 per month will pay between Ksh880 and Ksh2,400 in NSSF contributions and Ksh1,500 in the housing levy.
“Teachers under the Teachers Service Commission (TSC) have medical coverage superior to NHIF in lieu of medical allowances, but pay a mandatory contribution to NHIF, which the majority do not use.
Tony Gitonga, an Economist, remarked, “The same teachers who pay mandatory contributions to the state pension scheme for their pension must also pay NSSF deductions.”
This will reduce their net pay by at least Ksh3,750 per month; consequently, it is conceivable that the new taxes will increase civil servants’ discontent.
However, the same civil servants have also received a 10% salary increase, meaning that an employee earning Ksh100,000 per month will receive an additional Ksh10,000 per month.
A certain number of civil servants have already voiced their displeasure with the new taxes, contending that it is unfair to require them to pay taxes for months in which they were not in effect. In addition, they contend that the new taxes will make it difficult for them to make ends meet.
To ensure that everyone pays their equitable share of taxes, the government has defended the backdating of the taxes.
Additionally, the government has stated that it will use the additional tax revenue to fund essential development projects.
Teachers’ Payslip Outlook
The Kenya National Bureau of Statistics (KNBS) reported in May 2022 that the average monthly salary for teachers was Ksh61,843.
Pay as You Earn (PAYE) deductions of Ksh10,417.25 are applicable to teachers employed by the Teachers Service Commission (TSC) and earning an average gross salary of Ksh61,843.
PAYE pertains to individuals whose monthly employment income is at least Ksh24,000. This obligation extends to both residents and non-residents with gainful employment, as well as to any entity paying remuneration to its employees.
“As an employer, you must deduct PAYE from your employees’ salaries and wages at the prevailing rates and remit it to KRA by the 9th of the following month,” the tax authority warned.
Similarly, the teacher will be compelled to contribute Ksh360 to NSSF Tier I and Ksh720 to NSSF Tier II.
Based on total revenues, the teacher will also pay Ksh1,300.00 to the National Health Insurance Fund (NHIF) and Ksh928 in Housing Levy.
As a consequence, the total deductions will amount to Ksh13,725.25, so a teacher with a gross salary of Ksh61,843 will receive a net pay of Ksh48,117.75.
In addition, the taxable pay will be calculated to be Ksh 60,763.00, given that allowable deductions are valued at Ksh 1,080.
How Teachers’ Payslip Will Look From This Month