Public wage bill hits Sh1.3tr as 42 counties exceed 35pc threshold

Total public wage bill, combining both county and national governments, stood at Sh1.287 trillion by the end of the 2025/26 financial year, having grown 30 per cent over the last five years.

This was an increase of Sh40 billion from Sh1.247 trillion in the previous financial year that ended 2025 June, according to the Salaries and Remuneration Commission (SRC) latest Fourth Quarter Wage Bill Bulletin published on Friday.

“The public service wage bill has grown in absolute terms from Sh988 billion in the financial year (FY) 2020/2021 to Sh1.247 trillion in FY 2024/2025 and is projected to reach Sh1.287 trillion in FY 2025/2026,” said SRC, which also noted improvements in the wage bill to revenue ratio for the county governments since 2021.

The bulletin covers the period between April and June 2026 for the financial year 2025-2026.

The SRC says this growth has been driven largely by expansion in the teaching, health, and security sectors, and periodic salary adjustments to reflect the current high cost of living.

Despite the increase in the nominal wage bill, SRC says the wage bill-to-ordinary revenue ratio stood at 41.82 per cent in the financial year 2024-2025, and is projected to fall further to 40.68 per cent in the financial year 2025-2026.

This is, however, still above the required 35 per cent threshold as per the Public Finance Management(PFM) Act, 2012.

"This downward trend reflects the impact of fiscal consolidation measures and improved ordinary revenue collection, indicating progress toward enhancing the sustainability of public service compensation," says SRC in a statement.

According to the financial year 2025-2026 analysis of county government expenditure on the wage bill as a share of ordinary revenue, on average, the county wage-bill-to-revenue ratios remained above the PFM Act, 2012.

"The expenditure on Personnel Emoluments (PE) in county governments for the first nine months rose by 11 per cent from Sh154.94 billion in financial year 2024-2025 to Sh171.36 billion in the 2025-2026," says SRC.

The ratio of PE to revenue, SRC says, declined from 46.8 per cent to 44.12 per cent in the same period.

During the first nine months of the financial year 2025-2026, only five counties, including Tana River (27 per cent), Kwale and Nakuru (30 per cent), Uasin Gishu (31 per cent) and Kirinyaga 32 per cent recorded wage-bill-to-revenue ratios below the PFM Act threshold of 35 per cent.

In contrast, Taita Taveta (63 per cent), Homa Bay (63 per cent) and Machakos (58 per cent) recorded the highest.

Compared to the national government, expenditure on PE as a proportion of total revenue remained below the 35 per cent PFM threshold during the first nine months of financial years 2024-2025 and 2025-2026.

"The ratio increased slightly from 27.6 per cent to 28.1 per cent during the period. Similarly, PE as a proportion of total expenditure decreased from 30.5 per cent to 28 per cent," says SRC.

Analysis of the Economic Survey 2026 indicates that public sector wage employment grew by 4.6 per cent in 2025, up from 3.1 per cent in 2024.

The Teachers Service Commission (TSC) continued to be the largest public sector employer and recorded the highest employment growth among employer categories in 2025.

The SRC says TSC employment increased by 6.2 per cent, rising from 410,700 employees in 2024 to 436,300 employees in 2025.

 Ministries and other extra-budgetary institutions ranked as the second-largest employer with 243,500 employees, followed closely by county governments with 239,000 employees.

Overall, SRC says public service employment has maintained an upward trajectory over the past six years, increasing from 884,700 employees in 2020 to 1.07 million in 2025.

The bulletin comes a few months after SRC held the first National Productivity and Performance Conference in June 2026, which came up with seven resolutions that are expected to forge practical strategies for enhancing productivity, improving performance, optimising service delivery, strengthening revenue mobilisation and maximising institutional accountability.

The wage bill increase has been due to the approval of salary increases and Collective Bargaining Negotiations(CBN), where SRC has been instrumental in the successful conclusion of Collective Bargaining Agreements (CBAs).

During the last year, covering the four quarters of the Wage Bill Bulletins, the Commission said it issued advice to 42 institutions on CBN.