Teachers to face the following deductions in July

Teachers to face the following deductions in July

The Teachers Service Commission (TSC) teachers will start receiving bonuses starting July 2023 along with their July salaries. Teachers will receive a 7 percent raise in their base pay in their payslips for this month

This is after the government ordered the Salaries and Remuneration Commission, SRC, to pay all public servants including teachers and civil servants a salary increment of 7 percent to 10 percent starting July 1st.

Despite the bonuses, the salaries will face several deductions, some of which will go into effect this month of July.

Pay As You Earn (30 percent)
Starting this month, teachers will have 30 percent of their gross pay taken out for tax starting with the lowest job category (B5) and ending with the highest (D5).

Provident Fund (7.5 percent)

To participate in the Public Service Superannuation Scheme (PSSS), Teachers who are 45 or younger will have 7.5 percent of their basic pay taken out and put into the Public Service Superannuation Scheme (PSSS).

This is a defined contribution pension plan, which means that both the employee and the employer pay into the plan so that the employee can profit. You can verify your account by calling the USSD code *378#, giving your ID number, and creating a password.

Then you’ll be able to check your provident fund contributions and amount, as well as the beneficiaries and any changes to them.

The deduction of KNUT, KUPPET, KUSNET, and KEWOTA.
The 2 percent of the base pay for teachers in elementary schools will be deducted for Knut. Teachers in secondary and higher schools will have 1.8 percent of their basic pay taken out for KUPPET.

Teachers in special schools will have 1.45 percent of their base pay taken out to pay for KUSNET. The 200 that the teachers will lose will go to KEWOTA.

Deduction for the housing fund (1.5 percent)
On their July paychecks, teachers will see a new charge. This House Levy will cost 1.5 percent of your monthly payments.

Deductions for loan and premium
Teachers who have loans from banks, cooperatives, or even microfinance institutions will see charges on their pay stubs that go toward paying back the loans.

Some teachers have also put money into insurance companies by buying policies. If the policy goes bad, they will lose the amount they agreed to pay the insurance company as the policy’s fee.

Expensive Personal Loans
The rate that private banks pay to borrow money from the Central Bank of Kenya (CBK) has gone up from 9.5% to 10.5%. This means that teachers will get loans with higher interest rates and pay them back.

If interest rates go up, it will cost teachers more to pay back their loans. Aside from making it harder for teachers to borrow money from the bank, the higher rates will also make things on the shelves cost more. This is the most CBK has lent since 2016.

Tax on NHIF (2.75%)
On June 26, 2023, President William Ruto made suggestions for the National Hospital Insurance Fund (NHIF) to make sure that everyone gets paid the same amount. In the plan that the Head of State announced, Kenyans will pay 2.75 percent of their gross salaries to national insurance.

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