SRC: 41 counties exceed 35% wage-bill threshold as payroll pressure deepens

Kenya's county governments are grappling with a growing payroll burden, with 41 out of 47 counties spending over 35% of their revenue on personnel costs, according to the Salaries and Remuneration Commission (SRC). This highlights the financial strains faced by devolved governments as they balance employee costs with other expenditures.

Remarkably, the national government's personnel cost ratio remains below the threshold. The SRC's Second Quarter Wage Bill Bulletin for 2025/2026, covering October to December 2025, reveals that only six counties - Nyandarua, Nakuru, Migori, Kilifi, Siaya, and Tana River - were below the 35% threshold during the nine months of 2025.

This indicates that personnel costs continue to weigh heavily on county finances, with projected county expenditures on Personnel Emoluments rising to Ksh71.87 billion in the second quarter of FY2025/2026, up from Ksh63.63 billion in the same period of the previous year. Personnel Emoluments now account for 40.12% of county revenue, slightly lower than the 43.34% recorded in the comparable period.

While the six counties below the threshold demonstrate it's possible to stay within the 35% benchmark, the SRC bulletin does not attribute the differences to a single factor. The national government's expenditure on Personnel Emoluments for the same period was estimated at Ksh166.98 billion, also above the 35% threshold. This contrast underscores that Kenya's public wage bill challenge varies across levels of government.

The SRC emphasizes that controlling the public wage bill requires more than just reducing the number of employees. In 2024, Kenya's public service employed 1.023 million people, up 3.1% from 2023, with the Teachers Service Commission being the largest employer at 410,700. However, the relationship between staff numbers and the wage bill is complex.

Parastatal bodies employed just 100,100 people in 2024 but had a wage bill of Ksh239.02 billion, compared to county governments' 226,500 employees and a wage bill of Ksh215.08 billion. The SRC notes that while employee numbers affect the wage bill, "the level of remuneration (per employee) is an equally significant determinant."

Addressing this issue, the SRC is focusing on productivity as part of its response to the wage bill challenge. The commission has convened a steering committee to review the Third National Wage Bill Conference resolutions and plans to hold a First National Productivity Conference during FY2025/2026. This approach comes amid the continued concentration of Kenya's wage bill in essential public services, with education accounting for 59.66% of the total, followed by governance, justice, law, and order at 26.23%.