Salary Deductions Limit Checker (Two-Thirds Rule)
Are total deductions within the legal limit?
Basic pay plus cash allowances, overtime and commission.
Deductions
- KES
- KES
- KES
- KES
- KES
- KES
- KES
Benefits, absence and other checks
Used when filling in PAYE. Benefits raise PAYE without adding cash.
Off by default: the safer reading is cash wages only.
Two-thirds rule check
Employment Act s.19| Rule | Result |
|---|---|
| Total deductions within two-thirdsKES 1,306.25 over | Fail |
| Employer loan within 50% of what's leftlimit KES 8,346.88 | Pass |
| Absence up to one day's pay per dayno absence deduction | Pass |
| No payment for getting or keeping the jobnone | Pass |
Pay over what you deduct on time: pension, statutory, requested and employer-loan deductions must be remitted. Deducting without remitting is an offence (fine up to KES 100,000, up to 2 years in prison, or both). See the remittance deadlines.
How it's worked out
- Start with wages for the pay period: basic pay plus cash allowances, overtime and commission. Non-cash benefits are left out unless you choose to count them.
- Add up every deduction, including PAYE, NSSF, SHIF, housing levy, HELB, court orders, SACCO, loans and recoveries.
- Two-thirds test: total deductions must not exceed two-thirds of wages, so the employee keeps at least one-third (s.19(3)).
- Employer loan test: loan repayments to the employer must not exceed 50% of what is left after all other deductions (s.19(1)(h)).
- Absence test: no more than one day's wages for each working day absent without leave (s.19(1)(c)).
- If over the limit, cut voluntary deductions first, then the employer loan, then recoveries, then absence. Deductions required by law can't be cut.
What an employer may deduct (s.19(1))
| Paragraph | Deduction |
|---|---|
| (a) | Agreed contributions to an approved pension or provident fund |
| (b) | A reasonable amount for damage or loss caused by wilful default |
| (c) | Up to one day's wages per working day absent without leave |
| (d) | Cash shortages where the contract entrusts the employee with money |
| (e) | Wages overpaid in error |
| (f) | Amounts required by law, collective agreement or court order (PAYE, NSSF, SHIF, housing levy, HELB) |
| (g) | Amounts the employee asks for in writing (SACCO, union dues, insurance, bank loans) |
| (h) | Repayment of a loan from the employer, up to 50% of wages left after other deductions |
| (i) | Other amounts prescribed by the Cabinet Secretary |
Questions people ask
What is the two-thirds rule in Kenya?
Section 19(3) of the Employment Act caps total deductions from an employee's wages at two-thirds, so the employee must take home at least one-third. This covers PAYE, NSSF, SHIF, the housing levy, loans and SACCO contributions.
Do PAYE, NSSF, SHIF and the housing levy count towards the two-thirds limit?
Yes. They are authorised by written law under s.19(1)(f), which is one of the listed deductions, and s.19(3) caps all deductions under subsection (1).
How much can I deduct for a staff loan?
Employer loan repayments are further limited to 50% of the wages left after all other deductions (s.19(1)(h)), and the overall two-thirds cap still applies.
What happens if I deduct but don't remit?
That's an offence: a fine of up to KES 100,000, up to 2 years' imprisonment, or both. The court can also order you to refund the employee and pay the intended recipient from your own funds (s.19(5)–(6)).
Sources
Rates last checked 13 Sep 2026. Estimates only, not tax or legal advice.