State employees will now get a 7-10 per cent salary raise and backdated to July 1 after a freeze placed in 2021.
The salaries body told editors at a breakfast meeting in Nairobi that the salary review is based on growth momentum that picked up immediately after Covid-19.
Salaries and Remuneration Commission (SRC) says the National Treasury has allocated Sh27.1 billion for 2023/24 to undertake the exercise.
"The average increase of 7-10 per cent will be undertaken over a two-year period and is inclusive of a notch increase, averaging three per cent annually,'' SRC chairperson Lyn Mengich said.
She added that the third remuneration and benefits review will see progressive harmonisation and adjustment of remuneration structures that are below the 50 percentile market positioning while freezing salary structures above the 50 percentile.
Furthermore, where the salary structures are frozen, the notch increase will continue as budgeted up to the maximum salary point.
Teachers will get the lion's share of the pay rise, with the Teachers Service Commission allocated 44.2 per cent of the total amount, followed by armed forces at 20.9 per cent while counties will get 18.8 per cent.
Civil services and state officers will get 8.5 and 4.3 per cent respectively.
This is expected to pile more pressure on the wage bill that has since crossed the Sh1 trillion mark, with SRC forecasting it to hit Sh1.17 trillion up from Sh1.10 trillion.
The government has 968,425 employees this year from 953,041 last year, with an average monthly salary of Sh73,540.