Kenya’s public sector wage bill is tipped to hit Sh1.287 trillion in the financial year that ended in June 2026, on increased hirings and salary reviews, piling more pressure on the Exchequer to free up funds for development projects and delivery of critical services like health.
The Salaries and Remuneration Commission (SRC) disclosed that the wage bill was expected to grow by Sh40 billion from the Sh1.247 trillion in the year ended June 2025.
A hiring spree for teachers, nurses and other medical personnel and security agencies is behind the anticipated spike as Kenya struggles to strike a balance between meeting the legal requirements for revenue expenditure on salaries and hiring more Kenyans into the public service.
The increased wage bill for the public sector further reduces the Exchequer’s ability to self-fund development projects and also debt repayment obligations, leaving Treasury to go slow on development expenditure, borrow money or turn to innovative ways to fund these projects.
“The public service wage bills stood at Sh1.247 trillion in the 2024/25 financial year and is provisionally expected to reach Sh1.287 trillion in the 2025/26 financial year. This growth has been driven by expansion in the teaching, health, security sectors and periodic salary adjustments to reflect the cost of living,” SRC said on Friday.
The anticipated rise in the wage bill comes at a time when the number of employees in the public sector (both national and county governments) grew to 1,070,000 last year from 1,023,200 in 2024, according to official data from the Kenya National Bureau of Statistics.
A hiring spree for teachers was the single biggest driver of the employee numbers, as the government sought to plug the shortage of teachers that has been cited as a major challenge facing the recently launched Competence Based Curriculum.
The government also stepped up hiring of healthcare personnel, notably nurses, midwives and medical officers, to boost delivery of services at public health facilities.
SRC also approved salary increments and Collective Bargaining Agreements for segments of public servants in the year ended June 2026, which also triggered the rise in the public sector wage bill.
Approval of the salary reviews and CBAs was meant to cushion public servants against the rising cost of living. Inflation— the measure of cost of living— peaked at 6.7 percent in May this year from 4.5 percent in August last year. It eased to 6.6 percent last month.
Splashing more than Sh1.28 trillion on salaries and allowances of public service employees increasingly cuts the amount of money available to fund critical projects like health services and also debt payments.
But the Treasury has played down the impact of the hiring spree on the country’s efforts to comply with the Public Finance Management Act, which says expenditure on the public sector wage bill as a share of ordinary revenue should not exceed 35 percent.
The Treasury says that the expenditure on the public sector wage bill as a share of ordinary revenue will drop to 40.68 percent in the year ended June 2026 compared to 41.82 percent a year ago, attributing the drop to fiscal consolidation efforts.
