The Salaries and Remuneration Commission (SRC) says Kenya is steadily moving towards capping public sector salary expenditure at 35 per cent of total revenue, in a bid to restore balance between wages, development spending and service delivery.

Speaking during an interview with a local station on Tuesday, June 9, 2026, SRC Chief Executive Officer Ali Abdullahi said that the reforms introduced in 2021 under the wage bill-to-revenue ratio framework have helped stabilise public spending on salaries, even as pressure remains to balance employee welfare with fiscal discipline.

“In 2022, 50.4 per cent of revenue was being used to pay salaries. We have reduced that figure to 40.8 per cent. Our target is 35 per cent, and we are working towards achieving it,” Abdullahi said.

Wage bill reforms taking shape

Abdullahi noted that the wage bill debate in Kenya has long been a fiscal challenge, with nearly half of government revenue previously going towards salaries, limiting development spending and service delivery.

He explained that the introduction of the wage bill-to-revenue ratio in 2021 was aimed at ensuring that government spending remains within a manageable threshold that supports both remuneration and development priorities.

“We usually look at this wage bill thing. We came up with the wage bill-to-revenue ratio in 2021. We were at 50.4, meaning half of the money collected went into paying salaries,” he said.

Push for fiscal discipline

According to Abdullahi, Kenya has made notable progress, with the reduction to 40.8 per cent reflecting ongoing efforts in expenditure control and improved revenue performance.

He, however, warned that pushing the wage bill too low could have unintended consequences on morale and productivity within the public service.

“We are supposed to not go beyond 35 per cent. There is a mismatch between wage bill and revenue improvements. Containment of expenditure is key,” he said.

Balancing pay and performance

Abdullahi added that while fiscal discipline remains important, employee motivation must also be protected to ensure effective service delivery.

“We believe if we contain expenditure or control spending, there is a maximum where we can reach. We cannot go below that because it will have a negative effect on morale and people will not give their best,” he said.

He stressed that a motivated workforce is essential for improved service delivery and revenue generation, adding that the ultimate goal is to ensure government resources translate into better outcomes for citizens.

“There has to be a turnaround for citizens. The numbers we have should produce more,” he said.