Ruto Explains How Much Teachers Will Gain Under Proposed PAYE Tax Changes

President William Ruto has explained how teachers and other salaried workers could benefit from proposed changes to Pay As You Earn (PAYE), with employees earning KSh 50,000 expected to gain an additional KSh 1,250 monthly after housing levy deductions.

Speaking during the official opening of the Kenya Comprehensive School Heads Association (KECSHA) meeting in Mombasa on Thursday, November 12, Ruto defended his government’s tax policies while outlining plans to reduce the income tax burden on workers.

The President revealed that his administration wants to increase the monthly income exempted from PAYE from the current KSh 24,000 to KSh 32,000.

According to Ruto, the additional KSh 8,000 in tax-free income would translate into KSh 2,000 in monthly tax savings for workers paying tax at the 25 per cent rate.

To explain the proposal, he used the example of a teacher earning KSh 50,000 per month.

He noted that such an employee currently contributes KSh 750 towards the Affordable Housing Levy, calculated at 1.5 per cent of the salary.

Under the proposed PAYE changes, the worker would save KSh 2,000 in income tax, leaving a difference of KSh 1,250 after accounting for the housing levy.

Ruto argued that the changes would allow teachers to retain more of their monthly earnings without the government abolishing the Affordable Housing Levy.

He also defended the housing programme, saying it had created employment opportunities through the construction of houses, markets and student accommodation across the country.

The President further disclosed that contracts for housing projects, markets and student hostels had reached KSh 1.2 trillion.

The proposed tax changes are yet to receive final approval from Parliament and have not become law.

The announcement comes as teachers continue engaging the government over employment opportunities, promotions and better working conditions ahead of the January 2027 school reopening.

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