Govt orders employers to deduct 1.5% from your April salary to fund Uhuru's Affordable homes. housing

Effective this month, the government will deduct 1.5% housing levy from all employees.

In a newspaper advertisement on Tuesday, the Ministry of Housing and Urban Development, has instructed employers to remit housing levy fund by May 9 2019.

These deductions are aimed at funding the Jubilee administration’s affordable housing project under the Big 4 Agenda.

Employers are also required to send a figure matching the employees’ deductions to the Housing fund.

“The employers are required to deduct and remit the levy together with other statutory levies from both the employer and the employee by the 9th of each succeeding month together with other payroll statutory deductions. The first contribution shall be due by May 9, 2019,” stated the ministry in the advertisement.

The deduction became law by the enactment of the Finance Act 2018 that followed the budget statement presented to Parliament by Treasury Cabinet Secretary Henry Rotich.

The government promises employees whose salaries will be deducted that their levies will put them at a position to “finance the purchase of a home under the affordable housing scheme” as stated in the Act.

For those who will be ineligible to purchase a home, the legislation says their deductions will — after 15 years from the date of first deduction — be transferred into pension money or be transferable to a beneficiary.