Que: We pay our employees a housing allowance which is separate from the basic pay. When computing severance, can we leave out the housing allowance?

Ans: No, the Industrial Court has held severally that the housing allowance should be included in the computation.


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.


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  1. erick nyongesa says:

    whats the recommended number of days on severence pay 16 or 18 days

    1. Anne Babu says:

      The statutory minimum is 15 days pay for each year worked.

  2. erick nyongesa says:

    what if l give above 15 16 to 18 days??

    1. Anne Babu says:

      There is no issue with giving more. The law is concerned with setting the minimum.

      1. erick nyongesa says:

        thank you so much.
        can you give me contents to be included on HR Manual or sample Manual to be used.

  3. erick nyongesa says:

    when paying severance pay do we include house allowance and other benefits like sales commission?
    or its just basic pay + house allowance

  4. Trevor says:

    I understand that severance pay is calculated by multiplying 15 days’ salary by the number of years that an employee has rendered services to an employer.
    My question is, what rate can i expect to be applied on the 15 days? Having worked in the same company earning different salaries over the years.

    1. Anne Babu says:

      The last salary.

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