Housing Levy and Gross Salary Calculations
The new finance act 2023 (Kenya), set the housing levy at 1.5% of an employee’s gross salary. A lot of confusion, however, arose on the varying interpretations of “Gross Salary”. KRA recently issued a public notice to give clarity on the same.
Your Wingubox Payroll account has flexibility to accommodate these definitions and give you a compliant payroll.
How to edit your Housing Levy formula
- While logged in (as administrator), on the main menu, go to “Settings” => “Payroll Settings” => “Formulas”
- Click the tab labeled “Other Formulas”
- Click on the title “Housing Levy”
- This will open it for editing
- Locate the section for “Calculated on” and ensure it is on “Custom Value”
- With this selected, add the values of “Basic Pay”, “House Allowance” and any other regular cash benefits.
- Click the green button “Update Formula” to save the changes.
If you need to effect these changes on an existing payroll, you’ll need to re-run payroll. Otherwise, your payroll account is now good for future processing.