In Summary
  • The lowest minimum wage in this document is Sh5,436.90 per month for an unskilled employee working in the agricultural sector. The highest minimum wage is Sh24,719.50 for a Grade-1 trained artisan working in a large city.
  • If we add 18 per cent to these wages, the new range will be from Sh6,415.55 to Sh29,169.00, respectively.
  • Well, let me be clear: Whenever you get a pay-rise, your net earnings after tax will always be higher – even if your new salary puts you in a higher tax bracket.

Did President Uhuru Kenyatta announce an 18 per cent increment on all salaries?

The answer is no! What he was talking about were the “minimum wages”. So, if you are already earning above these, you should not expect a pay-rise.

The “Regulation of Wages Order” is a comprehensive document detailing the minimum wages that workers of different categories should be paid. It gives the rates per hour, per day and per month for people working in large cities (Nairobi, Mombasa and Kisumu), large towns, smaller towns and the agricultural sector.

The latest one I could find is dated June 26, 2015. The lowest minimum wage in this document is Sh5,436.90 per month for an unskilled employee working in the agricultural sector. The highest minimum wage is Sh24,719.50 for a Grade-1 trained artisan working in a large city.

If we add 18 per cent to these wages, the new range will be from Sh6,415.55 to Sh29,169.00, respectively. With effect from 1st May this year, nobody in Kenya should be paid less than Sh6,415.55 per month for any kind of work.

Now, I came across a debate on the internet about whether this increment is real or fake. The argument was that the wages would now attract tax and thus the net income would be less than the old tax-free earnings.

HIGHER TAX BRACKET

Well, let me be clear: that can never happen to employment income! Whenever you get a pay-rise, your net earnings after tax will always be higher – even if your new salary puts you in a higher tax bracket.

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