Pay & working terms · 3 min read
House allowance in Kenya: what the law requires your employer to pay
When an employer must house you or pay rent, the 15 per cent rule in the wages order, how consolidated pay works, and how to check your own offer.
House allowance is one of the most common lines on a Kenyan payslip and one of the most misunderstood. Some offers add it on top of basic pay, some build it in, and some leave it out. Here is what the Employment Act and the General Wages Order say, with a worked example from the 2026 minimum wages.
The rule: housing or enough money to rent
Section 31(1) of the Employment Act says an employer shall at all times, at its own expense, provide reasonable housing for each employee at or near the place of work, or pay the employee enough, as rent, in addition to wages, to obtain reasonable accommodation.
That duty does not apply where your contract consolidates a rent element into basic pay, or where a collective agreement provides for consolidated wages (section 31(2)).
The 15 per cent rule in the General Wages Order
Paragraph 4 of the Regulation of Wages (General) Order gives a figure. A monthly employee who is not given free housing must be paid a housing allowance equal to 15 per cent of the basic minimum wage, on top of that wage.
The 2026 amendment order keeps the same structure: its monthly rates are basic minimum wages exclusive of housing allowance, while its daily and hourly rates already include it. The General Order does not cover agricultural workers, who have their own wages order.
General labourer or cleaner in Nairobi, Mombasa, Kisumu, Nakuru or Eldoret. Basic minimum monthly wage: KSh 18,047.40. Housing allowance at 15%: KSh 2,707.11. Minimum monthly pay without free housing: KSh 20,754.51.
Consolidated pay: one figure that includes rent
Many salaried offers show one consolidated figure. That is lawful when the contract says the pay includes a rent element (section 31(2)(a)). It is still checked against the minimum: the consolidated amount should not leave you below the basic minimum wage plus the housing allowance for your job and area.
If your offer shows a single number, ask in writing whether it is consolidated pay that includes housing, or basic pay with housing to be added.
Housing provided by the employer
Where you live in housing the employer provides free, the allowance under paragraph 4 is not due. The accommodation should be reasonable and at or near the place of work (section 31(1)). Ask what happens to the house when the job ends, and how much notice you get to move out.
How house allowance affects deductions
A cash house allowance is part of gross salary. SHIF (2.75 per cent) and the affordable housing levy (1.5 per cent) are worked out on gross salary, so they include it. Check how your payroll treats it for PAYE on the payslip.
Your contract or a collective agreement can give you more than the legal minimum. This guide is general information, not legal advice for your situation.
Sources and further reading
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Frequently asked questions
Is house allowance mandatory in Kenya?
An employer must either provide reasonable housing or pay enough to rent it (Employment Act, section 31). This does not apply where your contract consolidates rent into basic pay.
How much is house allowance in Kenya?
For monthly employees covered by the Regulation of Wages (General) Order and not given free housing, at least 15 per cent of the basic minimum wage. Contracts often pay more.
Does the minimum wage include house allowance?
The monthly rates in the 2026 General Order exclude housing allowance. The daily and hourly rates include it.
What is consolidated pay?
A single salary figure that includes an element for rent. Section 31(2) of the Employment Act allows it when the contract says so.