The Payslip Republic: Kenya Writes Relief for 16% of Workers and Bills the Other 84%The Payslip Republic: Kenya Writes Relief for 16% of Workers and Bills the Other 84%

That is the argument here. Kenya's tax, pension and health reforms are drafted for the worker who holds a payslip, and the 84% who do not are left to fund the state through prices, fees and excise. The relief on offer is real. It answers a question that most Kenyan workers were never in a position to ask.

The 84% who never see a payslip

The Kenya National Bureau of Statistics recorded 18.1061 million informal jobs out of 21.6007 million recorded jobs in 2025, or 83.8%, in its Economic Survey 2026. The same table gives about 83.7% for 2024 on Mwenendo's arithmetic. The count excludes small-scale farming and pastoral work.

Set the policy calendar beside that number. Treasury Cabinet Secretary John Mbadi wants to replace the KSh 2,400 ($18.49) personal relief with a zero rate on the first KSh 32,333 of taxable pay.

On his own figures the plan exempts a further 362,846 workers, about one in 60 of all recorded jobs, and the best-placed beneficiary keeps at most KSh 2,083.25 ($16.05) a month. The same payslip already loses KSh 3,692.66 ($28.46) to health, housing and pension deductions before income tax is worked out.

What the other 84% pay instead

A mama mboga pays no income tax. She is not untaxed. Mwenendo's earlier analysis traced her tax bill to value added tax on cooking oil and excise duty on airtime and mobile money fees, none of which the zero band touches.

The fee table she meets is Safaricom's. Withdrawing KSh 101 costs KSh 29 ($0.22), or 28.71% of the cash, under the company's published tariff, as Mwenendo's explainer on the M-Pesa fee ladder showed. A son who sends his mother KSh 1,000 pays KSh 13, and she pays KSh 29 to cash it: KSh 42 ($0.32), or 4.2% of the money, before the unga is bought.

In the same worked example, a casual worker paid KSh 700 a day who withdraws daily pays KSh 174 a week, about KSh 9,048 ($69.65) a year, in cash-out fees alone.

Safaricom's M-Pesa took in KSh 100.1B ($770M) in the six months to September. The point is not that the tariff is illegal or that anyone owes an apology. The point is that the households meeting the steepest percentage fees in the economy are the ones no relief was written for.

The best defence of the zero band

The Treasury has a fair answer. Income tax cannot relieve people who do not pay it, and a zero band does help low-paid formal workers after the 10% and 25% bands stayed unchanged from January 2021. Mbadi himself has acknowledged that the health and housing deductions cut take-home pay.

We accept the first half of that defence. The second half, that relief will draw informal workers onto payrolls, is hope rather than evidence. Nothing published by the Treasury shows that a zero band moves a single boda boda rider onto a payroll, and the payroll is where everything else is attached.

Up to KSh 12,960 ($99.75) a month now flows into a formal worker's pension account, and employers supply half of it, as Mwenendo's explainer on the NSSF Year 4 rates showed. Tax relief, health cover and the housing levy route through the same door.

Then there is the bill. On Mwenendo's arithmetic the cut costs about KSh 44.5B ($342.91M) a year before the newly exempt are counted, and no published document says who pays it. If higher bands carry it, the informal majority sees no change. If borrowing or indirect taxes carry it, they pay. A relief is not free because it was announced kindly.

Three tests for the Bill

First, Mbadi's Treasury should publish, with the Bill, a table showing what every measure does to a household in informal work as well as to a payslip. A relief whose cost cannot be traced to its payers should not pass.

Second, Parliament should cap or waive excise on mobile money fees for transfers and cash-outs below KSh 2,500 ($19.24), the band where a flat KSh 29 cash-out fee takes the largest share of the money.

Third, the Central Bank of Kenya, which licenses payment providers, should report each year what share of mobile money fee income comes from transactions below KSh 1,000 ($7.70). A regulator that cannot see the fee base cannot judge whether it is fair.

Counting workers where they work

A country that counts its workers by payslip will keep discovering that its policies miss most of them. The 83.8% is not a margin to be formalised away by a tax band. It is the economy, and the state's next relief should be judged by whether it reaches the stall, the boda boda stage and the kiosk, not only the payroll.