NAIROBI, KENYA – The Government of Kenya, in a landmark move to streamline payroll management and enhance the security of employee contributions, on Wednesday, November 19, 2025, launched a unified digital platform for all statutory salary deductions. The new system, branded 'e-Deductions', will serve as a single point of remittance for employers for the National Social Security Fund (NSSF), the Social Health Insurance Fund (SHIF), the Affordable Housing Levy, and Pay As You Earn (PAYE) taxes.

The announcement was made by the Cabinet Secretary for Labour and Social Protection, Dr. Alfred Mutua, who stated the platform was developed in collaboration with the ICT Authority and the Kenya Revenue Authority (KRA). "The era of fragmented and insecure remittance systems is behind us," Dr. Mutua declared at the launch event in Nairobi. "The e-Deductions portal will provide a secure, transparent, and efficient mechanism that protects workers' contributions and reduces the administrative burden on employers."

A Response to Systemic Challenges

The launch addresses long-standing concerns over the non-remittance of deductions by some employers, instances of payroll fraud, and the high compliance costs associated with multiple payment systems. The government anticipates that the centralized system will seal revenue leakages and provide employees with unprecedented visibility into their statutory savings and contributions.

The ICT Authority, mandated with overseeing the technical implementation, confirmed that the platform integrates robust security protocols, including end-to-end encryption and multi-factor authentication, to safeguard sensitive payroll data. "We are leveraging technology to enforce accountability and provide a seamless user experience for both employers and employees," said Stanley Kamanguya, the CEO of the ICT Authority. The system is designed to provide real-time confirmation of remittances and allow employees to view their consolidated statements online.

Mixed Reactions from Stakeholders

The Federation of Kenya Employers (FKE) offered a cautiously optimistic response. FKE's CEO, Jacqueline Mugo, acknowledged the potential for increased efficiency but raised concerns about the implementation timeline and the capacity of small and medium-sized enterprises (SMEs) to adapt swiftly. "While a single remittance point is welcome, there must be adequate support and sensitization for businesses to transition without disrupting their operations," she noted. Earlier in the year, FKE had raised alarms that numerous salary deductions were pushing employees' take-home pay below the legally required one-third threshold, forcing some employers to top up salaries to remain compliant.

On behalf of workers, the Central Organization of Trade Unions (COTU) welcomed the move towards greater transparency. COTU Secretary-General Francis Atwoli emphasized the need for stringent oversight to protect workers' funds from mismanagement. "This system must guarantee that every shilling deducted from a worker's payslip is remitted to the correct agency and properly accounted for," Atwoli stated in a press release. "We will be vigilant in monitoring the platform's security and its adherence to data protection laws."

Implications for Kenyan Workers and Employers

The mandatory adoption of the e-Deductions platform will be phased in, with all employers required to be fully compliant by the end of the first quarter of 2026. The move comes amidst a backdrop of increased statutory deductions, including the 1.5% Affordable Housing Levy and the 2.75% contribution to the new Social Health Insurance Fund (SHIF), which officially replaced the NHIF on October 1, 2024.

Recent data from the KRA indicated that compliance with these deductions is growing, with the housing levy collections for the 2024/2025 fiscal year surpassing targets by Ksh10 billion to reach Ksh73.2 billion. The government argues that the new unified platform will further bolster compliance by simplifying the remittance process.

The Ministry of Labour and Social Protection has announced that it will roll out a nationwide sensitization campaign for employers and the public in the coming weeks. This initiative is critical, as the success of the e-Deductions platform will hinge on user adoption and the system's ability to deliver on its promise of a more secure and transparent future for statutory contributions in Kenya.