Que: Is my employer bound to pay me a house allowance?

Ans: No, an employer can either offer housing (seldom done nowadays) or give you a sufficient sum to enable you secure housing (housing allowance) or consolidate your salary i.e basic + housing put together as one consolidated amount.


Que: I’m I entitled to a transport allowance?

Ans: Only if it is provided in your contract.


Que: Are my allowances tax free?

Ans: No. allowances are taxable



Que: Should we add housing allowance to the basic pay when computing severance?

Ans: Yes, the courts have held that the housing allowance should be added.


Que: Can my employer take away a non-statutory allowance eg fuel allowance?

Ans: It depends on the provisions in your contract; if your employer has reserved the right to take away such an allowance at anytime then that can be done.


About Anne Babu

Anne is an Advocate of the High Court of Kenya and the Founding Partner of Anne Babu & Co. She has practised employment law for over 12 years and her employment law practice has been recognized by the prestigious Chambers & Partners. Anne cares about employers and their labour issues.


The information on this website is for general guidance on your rights and responsibilities and is not legal advice. If you need more details on your rights or legal advice about what action to take, please contact a lawyer.

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  1. Belle says:

    Is my employer bound to pay me leave allowance? Does the law provide for the same?

    1. Anne Babu says:

      It is not mandatory and normally only features where there is a collective bargaining agreement.

  2. Odhiambo says:

    Is there a legal provision in Kenya that sets House Allowance at 15% of an employees monthly basic salary? Please give reference of the law if any. Thanks.

    1. Anne Babu says:

      It’s not written in any law, it is established practice based on what was agreed in CBAs that were negotiated a long time ago.

  3. Carolyn e ATIENO Walwanga says:

    What is the current travelling allowance rate as provided by Kenya labour act

    1. Anne Babu says:

      That is something that is determined by the employer or in an applicable CBA.

  4. Peter Oluoch says:

    Hallo, I wish enquire if in any way there are compulsory allowances, for Kenyan working for Kenyan within Kenya.

    Thank you.

    1. Anne Babu says:

      Allowances are generally not compulsory. For housing, you either get housing allowance or a house or a consolidated salary.

  5. Esther says:

    Is my employer legally bound to pay me a disturbance allowance if he transfers me to a new workstation.

    1. Anne Babu says:

      Only if that is provided in your contract or HR Manual.

  6. preety says:

    1. Can your employer review your basic salary downwards and incorporate the housing and travelling allowance in the gross pay?
    2. After paying you the basic salary+house allowance+travelling allowance, can they remove the house and travelling allowance in the next contract?
    3. After working for 10 years on contract, can the employer continue putting you on contract or should you be on permanent basis now?
    4. If the CBA is in place, can the administration Management staff who are not unionised get lower than the CBA or should they get equivalent/more to it?

    1. Anne Babu says:

      1 & 2. Any such changes should be with your consent;
      3. An employer is not obliged to issue an open contract;
      4. If you are not covered by the CBA, it is upon you to negotiate your own salary, therefore, the answer to your question is, yes, you can earn less than those covered by the CBA.

  7. NELLY says:

    great job Anne. your articles are always great learning points!

    1. Anne Babu says:

      Thank you 🙂

  8. rebecca says:

    hello, what are the provisions for payment of responsibility allowance for employees in the public service?who is eligible for this allowance? thanks.

    1. Anne Babu says:

      It depends on what is stated in the applicable terms and conditions of service – review them to get an answer to your question.

  9. Tan says:

    Is transport allowance mandatory for a plumbing company

    1. Anne Babu says:

      Check your terms and conditions of service or any governing CBA. It is not a mandatory statutory allowance.


    I have this scenario, a company decides to send workers on paid leave because there is no much work at the moment and with the hope that business situation would change and they would be called back. however the business has not improved and now the Company decides to declare redundancy. my question is will the advance leave given to the workers be deducted from their redundancy entitlement dues. in some cases this mean the employee wont receive any redundancy payment as the advance leave days issued exceed the entitlement.

    1. Anne Babu says:

      It is wrong for the employer to force employees to use their annual leave days in such circumstances. The employees have a right to complian about this.

  11. George says:

    Am I entitled to leave allowance before taking the leave and if not am I entitled to full payment including overtime?

    1. Anne Babu says:

      You are only entitled to a leave allowance if it is provided in your contract or in an applicable CBA.

  12. David Karoki says:

    Hi Ann
    I have a multinational mining company. Who posted me in a mine in Sudan north in a harsh remote desert area. The working hours are from 6:00 to 19:00 hours. In the contract we were supposed to work eight days a week Mon to Friday rest is overtime. The working hours in the mine were 7 day a week with some night time calls.
    I have worked for six months and gave the employer the overtime hours.he instead said he will compensate me with days.
    I feel cheated after working on rotation of six weeks to seven weeks at site full time and three weeks off. After this the company splited and gave new employment terms.but basically the remuneration terms remained the same.

    Can you advice me if possible we meet one on one for I see this as abuse of my Labour right.

    1. Anne Babu says:

      Firstly, if you are employed to work outside the country for most of your contract term, the contract should be approved by the Ministry of Labour since that is a foreign contract of service. Secondly, an employer is not allowed to make unilateral detrimental changes to an employment contract – that is an unfair labour practice. There are also provisions on working hours and overtime compensation which should be complied with. You can either see a labour officer or lawyer to assist with your claim though you should first raise it as a grievance through the company’s grievance mechanisms. Sorry, I’m not giving consultations at the moment.

  13. Joy says:

    Hi Anne,

    My employer is sending us for work to Rwanda for 10 days. What rights do we have as employees in terms of health coverage in case we fall ill, emergency evacuation, per diem. We are a non-profit.

    Thank you so much

    1. Anne Babu says:

      Hi Joy, there are no special rights for short trips other than the usual obligations of an employer to an employee. The employer should off course facilitate expenses for the trip including evacuation is necessary.

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