COMPLIANCE
Jurisdiction
Contributor
Rate (2025)
Permitted uses
Singapore (CPF)
Employer and employee
37% total (20% employee / 17% employer)
OA balance for purchase or repayment (caps apply).
China (HPF)
Employer and employee
Beijing: 5-12%; Shanghai: 5-7% each
Buy; build; renovate; repay mortgage; pay rent (above thresholds).
INFONAVIT mortgage deposit or repayment; bank loan guarantee; retirement payout if unused.
Mexico (INFONAVIT)
Employer only
5% of wages
Kenya (AHL)
Employer and employee
1.5% + 1.5%
Affordable housing purchases with 5% deposit and concessional loans.
Who pays? Should costs be shared between the employer and employee (like Singapore and China) or borne by employers alone (as in Mexico)? How would this interact with PAYE priorities, National Insurance contributions and reliefs?
protecting workers’ savings from abuse, the amendment has been politically controversial. Opposition senators 5 warned that funds intended for savers are now exposed to potential misuse or diversion. Kenya – Affordable Housing Levy (AHL) Introduced in 2023/24, Kenya’s AHL is a national payroll-based charge that funds the ‘affordable housing programme.’ Employees pay 1.5% of gross pay, matched by employers. Payroll deducts the amounts and remits them to the Kenya Revenue Authority. Eligibility to apply for an affordable unit isn’t limited to employees. Instead, the scheme sets simple access rules: a minimum 5% deposit and concessional loan rates for eligible buyers. Levy contributions are pooled rather than tracked per person, with only separate voluntary savings attracting individual accounts. The main debate has been over how levy money might fund non-housing items. Indeed, by law, the levy finances related infrastructure in addition to affordable housing (Affordable Housing Act, Section 11) 6 . Court proceedings have highlighted transparency concerns while Parliament 7 has since urged the Affordable Housing Board to protect and prudently manage levy funds. Notably, Kenyan outlets 8 widely report a June 2025 union-brokered pause on market projects with refunds of any previous levy infrastructure spending, but no official Government notice has been published at the time of writing. payroll-linked housing scheme Drawing from the global models above, there are clear design questions for a potential UK payroll-linked housing scheme: What’s the base and cap? Which earnings count, and what limits apply? Could age or income bands rebalance housing and retirement (as in Singapore)? If devolved locally like China’s city-run HPF (for example, special rules for London or Manchester), how would payroll handle differing rates and caps? Practical design questions for any UK
maintained. If the UK were to choose this path, the plumbing is there, but success will nevertheless hinge on properly adapting the successes of others and avoiding their pitfalls. n Links corner 1. Delivering a decade of renewal for social and affordable housing: https:// ow.ly/t2wf50XeZqo 2. Housing affordability and productivity: https://ow.ly/1knZ50XeZA1 3. CPF mobile app: https://ow.ly/ hGux50XeZJ8 4. DOF decree: https://ow.ly/Sj5n50XeZWy 5. “Morena has already spent 109 national funds and now they’re going after workers’ money” article: https:// ow.ly/mAsi50XjCLf 6. Affordable Housing Act, Section 11: https://ow.ly/CqBQ50Xf0Jg 7. Committee on housing urges Affordable Housing Board to manage funds prudently: https://ow.ly/ ZYnz50Xf0U8 8. Atwoli, Ruto strike deal on housing levy use after talks: https://ow.ly/ jtUQ50Xf0Zz Suggested further reading Please note a Tolley subscription is required to access the following in full: l For those interested in the tax treatment of borrowing to purchase UK property: https://ow.ly/7vaM50Xf1ov l For more on Singapore’s CPF and payroll system, see Tolley’s Global Mobility, Employment Taxes - Singapore: https://ow.ly/tNhF50Xf1t2 l For more on China’s Housing Provident Fund and payroll treatment, see Tolley’s Global Mobility, Employment Taxes - China: https://ow.ly/wWhN50Xf1v7 l For more on Mexico’s INFONAVIT, see Tolley’s Global Mobility, Employment Taxes - Mexico: https://ow.ly/RYJl50Xf1y9 l For more on Kenya’s Affordable Housing Levy, see Tolley’s Global Mobility, Employment Taxes - Kenya: https://ow.ly/ir9550Xf1A3
Who benefits? What specific entitlements does a
contributor get? Would it be an individual balance (Singapore), eligibility for a loan (Mexico), deposit support or rent relief (China) or could access be independent of contributions, like in Kenya? Moreover, when do they vest? What are the exit or refund rules if an employee moves, retires or never buys? How’s it protected? What statutory ring-fence, reporting and audit will prevent diversion? Mexico and Kenya show how small gaps can quickly erode trust. Would account-style visibility, as in Singapore, help sustain confidence? UK feasibility – opportunities and pitfalls From a technical perspective, PAYE and real time information can carry a new deduction. HM Revenue and Customs already layers priorities (e.g., student and postgraduate loans) and phases in changes. Yet payroll in the UK is already highly complex. Extra requirements on payroll are rarely simple to plan or implement, as seen with the delay to the mandating of the payrolling of benefits to 2027. The harder part is governance. Three non-negotiables stand out for the UK: l statutory ring-fence and clear PAYE priority l named beneficiary rights with real-time statements l independent oversight with published results. Conclusion Payroll can move money with precision; trust determines if it should. With a housing crisis making it harder to get on the property ladder, payroll offers a nationwide solution to support affordability, but only if the rules are tight and public confidence is
*This article was written with reference to Tolley’s authoritative guidance on cross-border payroll compliance, featured in https://ow.ly/OiF250Xf1lc.
35
| Professional in Payroll, Pensions and Reward |
Issue 115 | November 2025
Made with FlippingBook - Online magazine maker