Under the new law, employees will be deducted 1.5 per cent of their gross monthly pay.
New legislation ropes in workers from the informal sector to align with the High Court ruling.
President William Ruto has signed into law the new Affordable Housing Bill that reintroduces a mandatory 1.5pc levy on income months after courts declared the deductions illegal.
The Head of State assented to the Bill at an elaborate event held at State House, Nairobi with top Kenya Kwanza leadership in attendance.