Explainer: How new SRC pay and allowances will affect civil workers in 2026
By Aloys Michael, January 4, 2026The Salaries and Remuneration Commission (SRC) has approved new salaries and leave allowances for civil servants in the country’s national government.
This change is part of the fourth remuneration review cycle, covering 2025 to 2029.
The decision, made during the SRC’s 691st meeting on December 19, 2025, will take effect retroactively from July 1, 2025, and the government expects the adjustment to cost about Ksh2.065 billion for the 2025/2026 financial year.
The SRC worked closely with the State Department for Public Service and Human Capital Development, which provided guidelines for the salary negotiations in early 2026.
Acting SRC CEO Margaret Njoka issued a circular detailing the new salary structure and leave allowances, covering all job grades from CSG1 to CSG17 and other designated positions.
A major change is in housing allowances, which have now been grouped into three clusters to match the cost of living in different parts of the country.
Salary clusters
Cluster 1 covers Nairobi, where living costs are highest.
Cluster 2 includes major cities such as Mombasa, Kisumu, and Nakuru, as well as municipalities like Nyeri, Eldoret, Thika, Kisii, Malindi, and Kitale.
Cluster 3 applies to all other towns and rural areas.
Civil servants in Nairobi will benefit the most from the increased housing allowances, while staff in smaller towns and rural areas will receive lower rates.
Under the new framework, higher-grade employees, such as those in CSG4, will earn basic salaries ranging from Ksh185,690 to Ksh396,130, with housing allowances up to Ksh140,600 in Nairobi.
Moreover, lower-grade employees, including those in CSG15, will earn between Ksh21,120 and Ksh26,250, with housing allowances of up to Ksh4,500.
The goal is to balance fairness with the differences in living costs across regions.
The new model
The SRC also introduced a consolidated Salary Market Adjustment (SMA), which combines entertainment, extraneous, and domestic servant allowances into a single adjustment.
This aligns civil service pay with market trends, simplifies administration, and reduces inconsistencies that existed in the old allowance system.
For unionisable staff, the new salary structure will be implemented through collective bargaining negotiations.
Unionisable staff refers to employees who are eligible to join a labour union or are covered by labour laws that allow union membership.
This allows trade unions and employers to agree on specific terms within the framework approved by the SRC.
The circular makes it clear that these new guidelines replace all previous advice on civil service pay for the covered items.
SRC says the review is an important step in modernising civil service compensation. It ensures pay reflects market realities, reduces financial pressure on staff, especially in high-cost urban areas, and provides a more transparent, consistent approach to allowances.
The SRC says it plans to continue refining the pay structure in future phases to keep civil service salaries competitive and sustainable.