How Salary Deductions Work in Kenya (2026 Guide) (2026)
Kenya’s payslip got busier in the last two years — SHIF replaced NHIF, the Housing Levy arrived, and NSSF limits jumped in February 2026. Here’s how the four layers stack in 2026.
The deduction order
Taxable pay = gross − NSSF − SHIF − Affordable Housing Levy. All three are deductible before PAYE — a point worth stressing because pre-2025 guides get the Housing Levy wrong.
NSSF — February-2026 limits
6% employee + 6% employer on pensionable pay: Tier I = 6% × KES 9,000 = KES 540; Tier II = 6% × (pensionable pay − 9,000) up to KES 108,000 — so the maximum employee NSSF is KES 6,480/month (was KES 4,320 under the February-2025 limits). January 2026 payrolls used the old limits; February 2026 onwards uses the new ones.
SHIF — 2.75%, no ceiling
The Social Health Insurance Fund takes 2.75% of total emoluments, minimum KES 300/month, with no maximum — and the employer pays nothing towards it. Fully deductible (Tax Laws Amendment Act 2024).
Affordable Housing Levy — 1.5% + 1.5%
Employee 1.5% of gross (no cap) plus employer 1.5%. Deductible since 27 December 2024 — if a calculator or HR sheet treats it as non-deductible, it’s out of date.
PAYE bands (Finance Act 2023, unchanged)
| Monthly taxable pay | Rate |
|---|---|
| First KES 24,000 | 10% |
| Next KES 8,333 | 25% |
| Next KES 467,667 | 30% |
| Next KES 300,000 | 32.5% |
| Above KES 800,000 | 35% |
Subtract the KES 2,400/month personal relief (residents) from the computed PAYE — it can’t go below zero. Non-residents don’t get the relief.
Worked examples
Example 1 — KES 100,000/month (resident): NSSF 6,000 + SHIF 2,750 + AHL 1,500 = 10,250 → taxable 89,750 → PAYE 21,708.35 − 2,400 = 19,308.35 → net KES 70,441.65.
Example 2 — KES 50,000/month: deductions 5,125 → PAYE 5,845.85 → net KES 39,029.15.
Common mistakes
1. January-2026 NSSF on a February payslip. The limits changed mid-quarter — make sure payroll software switched in February.
2. Capping SHIF. There is no SHIF ceiling — capping it at some old NHIF figure understates the deduction on high pay.
3. Missing the relief. KES 2,400/month is real money — non-resident payroll setups sometimes omit it for residents.
Try it: Kenya salary calculator →
Kenya — frequently asked questions
Kenya salary FAQs
How is NSSF calculated in 2026?
6% of KES 9,000 (Tier I = KES 540) plus 6% of pay between KES 9,000 and KES 108,000 (Tier II) — maximum KES 6,480/month employee, from February 2026.
Is SHIF mandatory?
Yes — 2.75% of gross, minimum KES 300/month, no maximum, for all employees.
What’s the employer cost beyond gross?
Employer NSSF 6% (to the same caps), AHL 1.5%, and a KES 50/month NITA levy.
When is PAYE remitted?
By the 9th of the following month.