TSC Explains Why Teachers Received Lower June Salaries After PAYE Deductions Increased

Thousands of teachers across Kenya were left surprised and frustrated after receiving their June 2026 salaries, only to discover that their net pay had dropped due to higher Pay As You Earn (PAYE) deductions.

For many educators, the difference was small but noticeable. Payslips reflected an additional PAYE deduction of approximately Ksh 108, leaving teachers questioning the reason behind the unexpected reduction in their take-home pay.

The unexplained deduction quickly sparked concern across the country, with many teachers expressing their frustrations on social media and through professional associations.

The timing of the deduction further fueled public criticism, as many educators said they had not received any prior communication from the Teachers Service Commission (TSC) explaining why their salaries had been reduced.

As speculation intensified, some teachers feared the increase was linked to a new government tax measure, while others questioned whether the Commission had introduced a fresh payroll deduction without consultation.

After several days of mounting public pressure and widespread debate, the Teachers Service Commission broke its silence. In a formal statement issued on Tuesday, June 23, 2026, the Commission sought to clarify the circumstances surrounding the increased PAYE deductions and explain why affected teachers would not receive refunds.

According to the TSC, the additional Ksh 108 deducted from teachers’ salaries was neither a new tax nor an arbitrary payroll charge. Instead, the Commission described it as a corrective adjustment that became necessary after a technical error was discovered during a recent payroll system upgrade.

The Commission explained that the issue originated during the reconfiguration of the Integrated Personnel and Payroll Database (IPPD), the system used to process salaries for public servants, including teachers.

The upgrade was undertaken to align the payroll system with changes introduced under the Tax Laws (Amendment) Act, 2024.

Section 7 of the law requires employee contributions made towards the Affordable Housing Levy (AHL) and the Social Health Insurance Fund (SHIF) to be treated as tax-exempt.

To comply with the new legal requirements, TSC technical teams updated the IPPD system so that the two statutory deductions would no longer be subjected to income tax calculations. However, during the implementation process, an unintended programming error occurred.

The Commission disclosed that while incorporating the new tax exemptions for AHL and SHIF, the payroll system mistakenly reprocessed National Social Security Fund (NSSF) contributions, which had already been recognized as tax-exempt under existing tax regulations.

As a result, the system ended up granting teachers tax relief on their NSSF contributions twice instead of once.

In practical terms, this meant that affected teachers temporarily benefited from a higher tax relief than what is permitted under Kenyan tax laws. Consequently, they ended up paying less PAYE than they were legally required to remit because the payroll system had inadvertently calculated their tax obligation incorrectly.

Once the anomaly was detected, the Teachers Service Commission corrected the payroll configuration to restore the proper tax computation.

The correction subsequently resulted in a slight increase in PAYE deductions for the June 2026 payroll, which translated into an average additional deduction of about Ksh 108 for many teachers.

The Commission emphasized that the adjustment should not be interpreted as the introduction of a new tax burden or an increase in existing tax rates. Instead, it simply restored the correct tax position after the payroll system had mistakenly awarded employees an unintended duplicate tax relief.

Addressing calls for reimbursement, the TSC maintained that there would be no refunds because the additional amount deducted does not represent an overpayment by teachers.

Rather, the Commission argued that previous payrolls had understated the correct PAYE liability due to the system error, meaning the June deductions merely reflected the lawful amount that should have been paid.

The clarification has done little to completely ease concerns among teachers, many of whom maintain that the Commission should have communicated the payroll adjustment before salaries were processed.

Several educators argued that advance notice would have prevented confusion and unnecessary speculation surrounding the deductions.

Others have called on the TSC to strengthen its payroll management systems to minimize similar errors in the future, particularly when implementing changes arising from new legislation.

They contend that even relatively small deductions can have a significant impact on employees already grappling with the rising cost of living. Despite the Commission’s explanation, the incident has once again highlighted the importance of transparency in public payroll administration.

Teachers continue to urge the TSC to improve communication whenever salary adjustments, tax changes, or payroll corrections are expected to affect their monthly earnings.

Going forward, the Commission says the payroll system has now been fully aligned with the Tax Laws (Amendment) Act, 2024, and future PAYE calculations will continue to reflect the correct tax treatment of employee contributions to the Affordable Housing Levy, the Social Health Insurance Fund, and the National Social Security Fund in accordance with the law.

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