Teachers demand refunds after TSC links higher PAYE deductions to ‘system error’

Irate teachers are now demanding refunds of irregularly deducted Pay As You Earn (PAYE) statutory contributions from their payrolls by their employer, the Teachers Service Commission (TSC) after the latter attributed flawed to a system glitch.

In a statement, TSC said the deductions reflected in teachers’ June 2026 payslips were occasioned by a payroll system anomaly that resulted in incorrect tax computations.

The clarification comes days after thousands of teachers across the country raised concerns over unexplained increases in PAYE deductions, with many reporting a reduction in their take-home pay despite not receiving any salary increment.

In a statement issued by acting Commission Secretary and Chief Executive Officer Eveleen Mitei, TSC said it had received numerous complaints from teachers regarding the adjustments made to PAYE deductions in their June salaries.

According to the commission, the issue emerged during the implementation of Section 7 of the Tax Laws (Amendment) Act, 2024, which amended the Income Tax Act to exempt employee contributions to the Affordable Housing Levy (AHL) Fund and the Social Health Insurance Fund (SHIF) from income tax.

TSC explained that the Integrated Personnel and Payroll Database (IPPD) system was reconfigured to accommodate the new tax exemptions for its employees.

However, the process inadvertently created an anomaly in the payroll system.

“During the system reconfiguration process, an unintended anomaly occurred whereby, in addition to AHL and SHIF contributions, National Social Security Fund (NSSF) contributions which had already been configured as tax-exempt in the payroll system were inadvertently re-captured for tax relief purposes. This resulted in the application of a duplicate tax relief on NSSF contribution for all TSC employees,” Mitei said.

The commission noted that the duplicate tax relief led to inaccurate PAYE calculations, necessitating adjustments in the June payroll to correct the anomaly.

The deductions had sparked concern among teachers and their unions, with reports indicating that many educators experienced an increase of about Sh108 in PAYE deductions, while others in higher job grades faced even larger deductions. Union officials estimated that if all of TSC’s more than 300,000 teachers were affected, the cumulative additional deductions could amount to approximately Sh32.4 million in a single month.

Speaking on Friday, June 19, 2026, Kenya National Union of Teachers (KNUT) Deputy Secretary General Hesbon Otieno questioned the timing of the increased deductions, noting that teachers had not received any salary increase that would justify a higher tax burden.

“Others are being deducted even more depending on their grades, and teachers are asking why there is an increase in PAYE despite the fact that there is no salary increment reflected in their payslips,” Otieno said.

He observed that teachers had anticipated changes in statutory deductions only after the implementation of the second phase of the 2025–2029 Collective Bargaining Agreement (CBA), which is expected to take effect from July 1, 2026.

“If there was a change at the end of July, we would understand because that is when the second phase of the 2025–2029 CBA is expected to take effect. But as it stands now, it is alarming to see an increase in deductions when there is no additional money in teachers’ pockets,” he added.

Otieno further called for transparency in payroll management, insisting that teachers should be fully informed of any deductions reflected in their payslips.

“No deduction should be made on a teacher’s payslip without them knowing exactly what it is for. If the deduction was made in error, then it should be refunded to the affected teachers,” he stated.

The controversy comes at a time when teachers had welcomed reports that TSC had secured Sh8.4 billion of the Sh16 billion required to implement the next phase of the 2025–2029 CBA beginning July 1, 2026.

Teachers’ unions and the commission also recently signed the 2026 Career Progression Guidelines aimed at streamlining promotions and accelerating career growth within the profession.