Kenyans earning over Sh100,000 revealed


Economy

Kenyans earning over Sh100,000 revealed


Those earning more than Sh100,000 accounted for 2.9 percent of the 2.92 million formal workers captured in the Kenya Revenue Authority (KRA) database. FILE PHOTO | NMG

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Summary

  • Kenya National Bureau of Statistics (KNBS) data released Tuesday show the top earners increased by 2,234 members compared to a rise of 3,178 a year earlier.
  • Those earning more than Sh100,000 accounted for 2.9 percent of the 2.92 million formal workers captured in the Kenya Revenue Authority (KRA) database.
  • The 2.9 percent share is not in line with luxury spending and accumulation of property, including purchase of homes and high-end cars that have been witnessed recently, analysts say.

The number of Kenyans earning more than Sh100,000 rose 2.71 percent last year to hit 84,907, reflecting Kenya’s growing inequality in the formal sector and tax avoidance by wealthy Kenyans in the informal sector.

Kenya National Bureau of Statistics (KNBS) data released Tuesday show the top earners increased by 2,234 members compared to a rise of 3,178 a year earlier.

Those earning more than Sh100,000 accounted for 2.9 percent of the 2.92 million formal workers captured in the Kenya Revenue Authority (KRA) database.

The 2.9 percent share is not in line with luxury spending and accumulation of property, including purchase of homes and high-end cars that have been witnessed recently, analysts say.

The 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.

The 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.

The KRA has struggled to bring more people into the tax brackets and curb tax cheating and evasion in the quest to meet targets in an economy where government income has consistently failed to meet targets.

Nearly half or 45.98 percent of the 2.93 million formal workers captured in the KRA database earned below Sh30,000, underlining the problem of Kenya’s pay 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.

Modest economic activity in the past two years has entrenched the income inequality with fewer jobs and stagnant pay hurting the middle class most.

While Kenya’s economy expanded 5.8 percent last year from 4.8 percent in 2017, private sector activity — which translates to jobs and higher pay — has remained muted.

About 78,500 new formal jobs were created in the economy last year, unchanged from 2018 and down from 114,400 in 2017, according to the Economic Survey 2020 data.

This is the slowest pace of formal job growth since 2012 when the economy churned out 75,000, adding to the crisis of youth unemployment. The data does not capture job cuts and net employment.

The drop in new jobs combined with stagnant wages for majority of workers has raised queries over equitable distribution of the growth dividend among Kenyans considering the economic growth expansion witnessed recently.

Official data shows that private sector produced the bulk of those earning above Sh100,000 with men dominating the top pay scale.

About 64.5 percent of men or 54,681 of them earned more than Sh100,000 compared to 30,126 women in this club.

The highest-paying jobs are concentrated in the private sector, which had 73,099 or 86.2 percent of all the top earners.

The public sector, including parastatals, the national and county governments, employed 11,708 of those taking home the largest pay cheques.

The education sector accounted for the largest share of those earning above Sh100,000 at 30.9 percent or 17,879 individuals, representing lecturers, administrators and secondary school teachers among others.

RETAIL TRADE

Financial services were second and accounted for 11,598 or 15.33 percent of the top earners, followed by wholesale and retail trade and repair of motorcycles and motor vehicles whose number stood at 10,909 or 4.2 percent.

None of employees in activities such as mining and quarrying, and production of undifferentiated goods were earning above Sh100,000.

The actual labour earnings across the country remain unclear, with most Kenyans employed in the informal agricultural sector.

In total, however, the private sector has been doling out the biggest pay cheque in excess of Sh1 trillion last year or more than 70 percent of the total wage earnings.

This underlines the critical role of companies in creating and sustaining earnings from employment.



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Earning back respect the goal for Stack and Coleman-Jones


Sydney Stack and Callum Coleman-Jones returned to Richmond training today and begin a 2021 campaign to win back the trust of the football world.

The Tiger duo were suspended for 10 games and booted out of Queensland late in the 2020 season after breaching quarantine rules and getting in a fight outside of a Surfers Paradise strip club.

Richmond was also fined $100,000 for the indiscretion.

Club CEO Brendon Gale has full confidence both players will earn back the respect of their teammates and the community.

“They returned today to training which commenced for first to fourth year players,” Gale told SEN’s Bob and Andy.

“We had a bunch of young fellas down there, but look there’s a lot of interest in those two lads for obvious reasons, we don’t need to go back over that, but they’ve been held accountable, they’ve paid a heavy price for their mistakes.

“At the end of the day, they’re fine young men, they’re our men, they’re Tigers and we’ll put our arm around them and we’ll support them and love them and help them reload.

“They’re both extremely talented players, each in their own way and arguably they might have missed a chance to play in a premiership, who knows.

“They’ve paid a heavy price, they’re important players and they’ll put their head down and we’ll help them win back the respect of the group and the community and they will because they’re fine men.”







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Gender pay gap narrowing but women still earning average of $25,000 less


Women on average earn $25,534 less than men every year, according to the Workplace Gender Equality Agency’s latest gender pay gap report.

The gender pay gap for total remuneration dropped just 0.7 percentage points to 20.1 per cent in the year to March, according to the report.

Women’s average full-time base salary across all industries and occupations was 15 per cent, or $15,144 a year less than men’s.

The report said while the gap was narrowing, all industries had a gender pay gap that favoured men, and more than 45 per cent of employers who undertook a pay gap analysis took no action to address it.

But access to paid parental leave is improving. More than 50 per cent of employers provided staff access to paid parental leave in addition to the government scheme.

Workplace Gender Equality Agency (WGEA) chief executive Libby Lyons said even before the COVID-19 pandemic hit, Australian employers had become “complacent” about gender equality.

She said “fatigue” was kicking in at many organisations, which had been reporting data since 2013.

The WGEA’s data is based on 4,943 reports from employers, covering more than 4 million employees, for the reporting period April 1, 2019 to March 31, 2020.

It indicates women’s overall position in the workforce. It does not compare like for like roles.

And it excludes CEOs, with just 10 of Australia’s top 200 listed companies having a female chief executive.

Workplace Gender Equality Agency director Libby Lyons says Australian employers have become complacent about achieving gender equality.(ABC News: Supplied)

Pandemic could see us go back a decade on gender equality

Ms Lyons said in the two years of the global financial crisis the gender pay gap increased by 2 percentage points and it took 10 years to fix that.

“As we move into the post-COVID recovery phase, we must make sure that women’s workforce participation is not sidelined.

“Our economic recovery depends on women having equal access to secure full-time jobs.”

Ms Lyons said she was still against introducing gender-based quotas in the way other countries had. Germany this week made it compulsory for most listed companies to have at least one woman on their board.

Ms Lyons said employers who did not take action to address pay gaps and increase women’s representation would fall behind.

“I can’t think of any better stick or incentive than to ensure you drive increased productivity, increased performance and increased profitability.”

The report notes gender pay gaps are influenced by a number of factors that can include discrimination and bias.

But the pay gap is also influenced by women and men working in different industries and jobs. Women dominate part-time jobs (75 per cent) and casual roles (56.3 per cent).

Women also still take up a disproportionate share of unpaid caring and domestic work, spend greater time out of the workforce and are under-represented in senior roles.

Silhouette of a woman dressed in a business suit walking.
Women dominate part-time and casual jobs and are under-represented in senior roles.(AAP: Julian Smith)

Pay gaps by category and industry

A breakdown of the data shows every manager category and non-manager occupation had a gender pay gap for full-time employees that favours men.

The report said total remuneration gender pay gaps were influenced by a range of factors including non-salary benefits such as bonuses at senior levels, reliance on awards and collective agreements in some occupations, and the concentration of women and men in different industries.

The report recorded the largest decrease (1.8 percentage points) in the other executives/general managers category. But there was still a pay gap of $67,768 between men and women there.

And in the highest ranking “key management personnel” category, the pay gap was $89,141.

There has, however, been a narrowing of the gap in five of the seven occupational categories. The only occupation with an increased gender pay gap this year was labourer, with a 0.9 percentage point rise — a gap of $15,099 a year.

Chart showing gender pay gap by occupation.

“Financial and insurance services” remains the industry with the highest total remuneration gender pay gap at 27.5 per cent, or a difference of $45,497 annually.

But that industry’s gender pay gap has dropped almost 2 percentage points this year and has decreased 8.6 percentage points since 2013-14.

Construction has replaced “rental, hiring and real estate services” as the industry with the second-worst gender pay gap at 26.1 per cent or $36,361 annually.

The gender pay gap in the most heavily female-dominated industry — healthcare and social assistance — remained virtually unchanged (up from 14.7 per cent in 2015-16 to 15.7 per cent in 2019-20).

But even in this female-dominated industry the pay gap is 15.7 per cent, or $16,700 a year.

The gender pay gap in the second most female-dominated industry — education and training — went up 0.4 percentage points to 9.2 per cent, or a $11,562 difference annually.

Gender pay gap shown via industry.

Almost half of all employers took no action to address pay gap

There was another increase in the number of employers analysing their payroll data for gender pay gaps (up 1.7 percentage points to 46.4 per cent), but fewer organisations were taking action to close their gender pay gaps

Among organisations that conducted a gender pap gap analysis, there was a significant drop in the number which reported taking action as a result (down 6.1 percentage points to 54.4 per cent).

More than 45 per cent of employers who undertook a pay gap analysis took no action to address it.

Chart showing analysis of gender pay gaps conducted by organisations.

The proportion of organisations reporting pay equity metrics to the executive dropped 4.7 per to 26.6 per cent and those correcting like-for-like gaps fell 2.2 percentage points to 26.7 per cent.

The only increase reported was a 2.3 percentage point rise to 9.2 per cent in the number of employers setting targets to reduce organisation-wide pay gaps.

And 68.9 per cent of employers who undertook a pay gap analysis and took no action to address it reported their analysis identified “no unexplained or unjustifiable pay gaps”.

However, the number of organisations implementing formal policies and strategies on remuneration with specific pay equity objectives is increasing.

According to the report, 63.8 per cent of organisations said they had a formal policy. Of those organisations, 43.1 per cent now have pay equity objectives in their remuneration policy and strategy.

There was also an increase in the number of employers with a formal policy or strategy to support employees experiencing family or domestic violence. It went up 6.2 percentage points to 66.4 per cent.

Paid parental leave still taken mostly by women

There has been improved access to paid parental leave. It reached a seven-year high.

For the first time since WGEA started collecting data, more than 50 per cent of employers said they provided staff access to paid parental leave, in addition to the government scheme.

But access to paid parental leave was highly dependent on the size and industry of the employer, with bigger ones generally offering more generous incentives.

Two parents hold the hands of a toddler.
Access to paid parental leave is highly dependent on the size and industry of the employer, with bigger ones generally offering more generous incentives.(Flickr: Kat Grigg)

Almost seven in 10 (69.4 per cent) of the employees had access to paid parental leave for primary carers (3,047,441 employees) and 46.4 per cent of employers offered paid parental leave for secondary carers.

Women accounted for the vast majority (93.5 per cent) of all primary carer’s leave used, with men accounting for only 6.5 per cent.

Of those employers offering paid primary carer’s leave, seven to 12 weeks was the most common length of leave.

chart showing carer's leave offered to employees.

Only 4.7 per cent of employers offered 18 or more weeks of primary carer’s leave.

Ms Lyons said it was positive that more than 50 per cent of employers said they provided staff access to paid parental leave, but overall employers needed to do more to ensure gender equality was achieved.

She said while the number of female CEOs and board directors was rising, “we are still decades away from achieving gender balance at the top levels of leadership”.

“The issue is clearly not receiving the necessary attention to drive further change.”



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