TSC Explains Increased PAYE Deductions in June Salaries

The Teachers Service Commission (TSC) has moved to explain why thousands of teachers received higher-than-expected Pay As You Earn (PAYE) deductions in their June 2026 salaries, attributing the increase to a payroll system configuration error that emerged during the implementation of new tax changes.

In a statement, Acting Commission Secretary and Chief Executive Officer Eveleen Mitei said the Commission had received numerous concerns from teachers over the deductions reflected in the June payroll and had undertaken a review that identified the source of the anomaly.

According to the Commission, the issue arose after the enactment of the Tax Laws (Amendment) Act, 2024, which amended the Income Tax Act to introduce tax exemptions on contributions made to the Affordable Housing Levy (AHL) Fund and the Social Health Insurance Fund (SHIF).

To align the payroll with the new legal requirements, TSC said the administrator of the Integrated Personnel and Payroll Database (IPPD) reconfigured the payroll system to implement the tax exemptions for all employees.

However, during the reconfiguration process, an unintended error occurred involving National Social Security Fund (NSSF) contributions.

The Commission explained that NSSF contributions had already been configured as tax-exempt within the payroll system. During the latest adjustments, those contributions were inadvertently recaptured for tax relief purposes, leading to the application of a duplicate tax relief on NSSF contributions for all TSC employees.

As a result, the payroll system generated incorrect PAYE computations, which were reflected in the June salaries paid to teachers and Commission staff.

Mitei said the anomaly was detected during the Commission’s routine payroll reviews, prompting immediate corrective action before the payroll process was finalized.

“Consequently, the PAYE deductions were adjusted to align with the correct tax computations as provided for under the law,” she said.

The Commission maintained that the adjustments were necessary to ensure compliance with Kenya’s tax laws and to correct the payroll calculations after the system error was identified.

TSC further disclosed that it has undertaken additional corrections to the payroll system to prevent similar occurrences in future salary processing.

“The Commission also wishes to clarify that the PAYE adjustment reflected in the June 2026 payroll arose from the correction of the payroll system configuration and was necessary to ensure accurate computation of Pay As You Earn deductions going forward,” Mitei said.

The clarification comes after teachers across the country raised concerns over what they described as unusually high statutory deductions in their June payslips, with many seeking an explanation from the Commission.

While acknowledging the anxiety caused by the deductions, TSC assured its employees that the issue had been addressed and that the payroll system had been corrected to ensure future PAYE calculations are accurate and compliant with the law.

Mitei expressed regret over the inconvenience occasioned by the adjustments and thanked teachers and other Commission employees for their patience and understanding.