Understanding your Teachers Service Commission (TSC) payslip is critical for financial planning, especially following the implementation of the 2025–2029 Collective Bargaining Agreement (CBA). This guide breaks down the earnings and deductions seen on the modern Kenyan teacher’s payslip as of January 2026.
1. The Earnings Side: Basic Pay and Allowances
Your “Gross Pay” is the sum of your basic salary and all applicable allowances. Under TSC Circular No. 7/2025, several rates were adjusted to reflect Phase 1 of the new CBA.
Basic Salary
This is the core pay based on your job group (B5 to D5).
- Recent Change: Salaries for lower cadres (B5–C1) saw increments of up to 29.5%, while higher grades like D5 received a 5% adjustment.
- Example (Grade C2): A Secondary Teacher II now starts at approximately Ksh 41,420.
House Allowance
Classified into three main clusters by the Salaries and Remuneration Commission (SRC):
- Cluster 1 (Nairobi): The highest rate.
- Cluster 2 (Major Cities/Municipalities): Includes Mombasa, Kisumu, Nakuru, Nyeri, Eldoret, Thika, Kisii, Malindi, and Kitale.
- Cluster 3 (All other areas): Rural and smaller townships.
Commuter Allowance
A standard monthly amount to cover transport costs.
- Rates: Vary from Ksh 4,000 (B5) to Ksh 32,000 (D5). Grade C2 currently receives Ksh 10,000.
Hardship Allowance
Payable only to teachers stationed in designated “Hardship Areas” (e.g., ASAL regions).
- C2 Rate: Approximately Ksh 10,900.5
2. The Deductions Side: Mandatory and Statutory
Deductions are often where teachers feel the most “wage squeeze” due to new legislative changes.
PAYE (Pay As You Earn)
The standard income tax. As of 2026, the progressive tax brackets include a 30% rate for income above Ksh 50,000, rising to 35% for high earners (>Ksh 800,000).
SHIF (Social Health Insurance Fund)
Replacing NHIF: As of late 2025, TSC fully transitioned teachers to the Social Health Authority (SHA).
- The Rate: A flat 2.75% of your Gross Salary (not basic).
- Impact: Unlike the old NHIF (which had a cap of Ksh 1,700), SHIF has no ceiling. Higher-earning teachers pay significantly more for the same benefit.
NSSF (National Social Security Fund)
Deducted in two tiers:
- Tier I & II: For January 2026, the upper limit is based on a salary of Ksh 72,000, with a maximum deduction of Ksh 2,160 (matched by the employer).
Affordable Housing Levy
A mandatory 1.5% deduction from your total Gross Pay.
Sacco Deductions & Third Parties
Voluntary deductions for savings (e.g., Mwalimu National Sacco) or loans.
The One-Third Rule: Under the Employment Act and TSC regulations, your net pay must not fall below one-third of your basic salary. TSC will block any new Sacco or loan deductions that violate this rule.
3. Data Analysis: Net Pay Simulation (Grade C2)
Based on a Secondary Teacher II (Grade C2) in Nairobi, January 2026.
| Component | Amount (Ksh) |
| Basic Salary | 41,420 |
| House Allowance (Nairobi) | 22,750 |
| Commuter Allowance | 10,000 |
| GROSS PAY | 74,170 |
| SHIF (2.75% of Gross) | (2,040) |
| Housing Levy (1.5% of Gross) | (1,113) |
| NSSF (Tier I & II) | (2,160) |
| PAYE (Estimated after relief) | (~11,500) |
| TOTAL STATUTORY DEDUCTIONS | (16,813) |
| NET PAY (Take-home) | Ksh 57,357 |
Analysis: Statutory deductions now consume roughly 22.7% of a C2 teacher’s gross income. While the 2025 CBA provided a basic salary cushion, the shift from NHIF to SHIF (a 2.75% uncapped rate) has increased the deduction burden for teachers in higher job groups.