Additional Voluntary Contributions (AVC)

A member can make additional voluntary contributions. The portion of your salary that you contribute to the scheme is normally deducted from your salary before taxation. There however exists a limit to the amount that is tax-free. Presently the limit on contributions is Ksh 20,000 but this is reviewed periodically by the government.

The table below shows the advantages of Additional voluntary contributions (AVC) in relation to tax calculation. For the illustration purposes the three members earn the same salary, Member A makes the mandatory and additional voluntary contributions of five percent (5%), Member B makes only the mandatory contributions, Member C makes no contributions.

 

Member A

Member B

Member C

Basic pay

50,000

50,000

50,000

Allowances

17,000

17,000

17,000

Gross pay

67,000

67,000

67,000

Pension contributions - 5%

   2,500

         2,500

  -  

Additional Voluntary Contributions -5%

2,500

  -  

  -  

Statutory contributions- NSSF

   200

 200

  200

Non taxable income

   5,200

  2,700

  200

Taxable Income

   61,800

64,300

66,800

Tax payable -before reliefs

13,144

13,894

14,644

Net salary

48,656

50,406

52,156

Core Values

Integrity
Accountability
Courtesy
Efficiency
Stewardship

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