Nairobi News

HashtagHustle

Number of employed Kenyans earning over Sh100k a month revealed


The number of employed Kenyans earning more than Sh100,000 per month rose by 4.1 percent last year to hit 79,982 recording the highest growth among salaried workers although the growth is also likely to further entrench income inequality.

Data from the Kenya National Bureau of Statistics (KNBS), set to be released next week, will show that top earners increased by 3,178 members with the 4.1 percent growth outpacing all the other income groups whose ranks rose by a range of 0.3 percent to 3.8 percent.

Those earning more than Sh100,000 accounted for 2.89 percent of the 2.70 million formal workers captured in the Kenya Revenue Authority (KRA) database.

Top income earners

The top income earners include professionals with several years of experience, State officers, managers and individuals with one or more postgraduate qualifications.
At a minimum of Sh100,000, their pay is nearly six times the gross monthly per capita income of Sh16,833.

INEQUALITY

Nearly three quarters or 74.58 percent of formal sector workers earned below Sh50,000, reflecting the income inequality. The earnings inequality has partly been attributed to the previous centralised system of government, which guided sharing of resources since independence.

The devolved system of government, which took off in 2013, raised hopes of addressing the economic imbalance, as analysts say there is a need to offer incentives to attract private investors to counties and spread wealth.

KRA has consistently questioned data showing a measly 2.8 percent of workers are paid Sh100,000 and above, pointing to a larger share of high income earners whose lifestyles are not in tandem with the taxes they pay or their declared income.

The taxman says a sharp increase in imports of luxury items and multi-million-shilling investments in real estate have opened its eyes to a potentially massive tax leakage, which if tapped could yield billions of shillings in additional revenues to the Exchequer.

KRA’s argument is supported by the fact that only a few Kenyans have officially registered as belonging to the high-income earners’ bracket despite the growth in conspicuous consumption in areas such as Nairobi. The taxman reckons there are workers who earn extra cash from ventures such as real estate, dividends and royalties, but fail to declare the additional income.

Men dominate the top wage bracket as they do in other levels, the data shows.

Public sector

About 63.4 percent of men or 50,749 of them earned more than Sh100,000 compared to 29,233 women in this club, a gap of 21,516, which is roughly maintained in the other income bands.

The highest-paying jobs are concentrated in the private sector, which had 68,526 professionals or 85 percent of all the top earners.

This story was first published in the Business Daily. Read full story here.