Public servants are earning more on paper than they did five years ago, but their actual purchasing power has declined sharply as inflation continues to outpace salary growth, new data from the Salaries and Remuneration Commission (SRC) shows.
According to SRC’s Wage Bill Bulletin, based on KNBS Economic Survey 2026 data, public servants’ real earnings have fallen despite nominal pay increases.
The bulletin shows that average monthly nominal earnings rose to Sh72,856 in 2025, but average monthly real earnings, which account for inflation, fell significantly over the same period.
Real earnings stood at Sh59,623 in the 2020/21 financial year before declining to Sh56,546 in 2021/22, Sh52,156 in 2022/23, Sh51,191 in 2023/24 and Sh50,046 in 2024/25.
SRC projects that real earnings will remain at about Sh50,046 in 2025/26, highlighting the widening gap between the amount workers receive and what that money can buy.
The decline means that although public servants may be receiving higher salaries in nominal terms, the value of those salaries has fallen when adjusted for inflation.
SRC Says Inflation Continues to Erode Salaries
SRC attributed the decline in real earnings to persistent inflation, which has reduced the purchasing power of the Kenya Shilling.
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“A persistent increase in inflation erodes not only the value of the Kenya Shilling, but also its purchasing power,” SRC said.
The commission warned that continued inflation could also create pressure for salary increases as workers seek compensation for the rising cost of living.
“Consequently, this will exert inflationary pressure on the labor market due to the push from employees for salary increments to cushion public servants and the households against the resultant high cost of living,” SRC stated.
The pressure comes as inflation remained elevated during the period under review.
Average inflation in the fourth quarter of the 2025/26 financial year stood at 6.23% compared to 3.9 per cent during the corresponding quarter of the previous financial year.
Public Wage Bill Rises
At the same time, the amount the government spends on public sector salaries continues to increase.
Kenya’s public wage bill stood at Sh1.247 trillion in the 2024/25 financial year and is provisionally expected to rise to Sh1.287 trillion in 2025/26.
SRC said the growth has largely been driven by the expansion of the teaching, health and security sectors, as well as periodic salary adjustments aimed at taking account of changes in the cost of living.
The increase in the wage bill has also coincided with growth in public sector employment.
Public sector wage employment grew by 4.6 percent in 2025, up from 3.1 percent in 2024.
The total number of people employed in the public service increased from 884,700 in 2020 to 1.07 million in 2025.
The Teachers Service Commission (TSC) remained the largest public sector employer, with its workforce increasing by 6.2% from 410,700 in 2024 to 436,300 in 2025.
Ministries and other extra-budgetary institutions employed 243,500 people, while county governments employed 239,000.
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Wage Bill Takes Smaller Share of Revenue
Despite the increase in the total wage bill, SRC said the cost of public sector salaries relative to government revenue has been declining.
The wage bill accounted for 41.82% of ordinary revenue in 2024/25 and is projected to decline to 40.68% in 2025/26.
SRC attributed the downward trend to fiscal consolidation measures and improved ordinary revenue collection.
“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,” the commission said.
The figures point to a mixed picture for the public sector.
While the government is spending more on salaries and employing more workers, the real value of the earnings received by individual public servants has continued to decline.
Counties Continue to Face Wage Pressure
The SRC said county governments also increased personnel spending during the first nine months of the 2025/26 financial year.
According to the commission, County Personnel Emoluments (PE) rose by 11 % from Sh154.94 billion to Sh171.36 billion during the period.
However, SRC noted that personnel costs as a share of county revenue declined from 46.8% to 44.12%.
Under the Public Finance Management Act, counties must keep their wage bill within 35% of their total revenue.
SRC said five counties recorded personnel costs below the 35 % threshold.
Tana River recorded the lowest ratio at 27%, followed by Kwale and Nakuru at 30% each, Uasin Gishu at 31% and Kirinyaga at 32%.
At the other end of the scale, SRC identified Taita Taveta and Homa Bay as having the highest personnel expenditure-to-revenue ratios at 63% each, followed by Machakos at 58%
The commission further reported that national government personnel expenditure as a share of total revenue remained below the 35% threshold, although it increased slightly from 27.6% to 28.1% during the first nine months under review.
Meanwhile, SRC said national government personnel expenditure as a share of total expenditure declined from 30.5% to 28%.
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