Kenyan payroll deductions and who collects them
What comes off a Kenyan payslip in 2026, PAYE, NSSF, SHIF, the Housing Levy and the NITA levy, who collects each one, and by when.
By Achekam · · 4 min read · For Running a business businesses in Kenya
A Kenyan payslip used to be simple: gross pay, PAYE, a couple of statutory lines, net pay. In 2026 it carries more, and the money goes to more than one place. Some of it goes to KRA, some to the Social Health Authority, some to the NSSF, and the employer adds contributions of its own on top.
For a small employer, the risk is not usually the arithmetic. It is paying the right amount to the wrong body, or the right body on the wrong date. This article sets out each deduction at the time of writing, who collects it and when, and how Achekam's Kenyan payroll handles them.
PAYE bands and reliefs at the time of writing
Kenyan PAYE is charged monthly. The bands below have been in force since 1 July 2023 and were unchanged by the Finance Acts 2025 and 2026:
| Monthly taxable pay | Rate |
|---|---|
| The first KES 24,000 | 10% |
| The next KES 8,333 | 25% |
| The next slice, up to KES 500,000 | 30% |
| The slice up to KES 800,000 | 32.5% |
| Everything above KES 800,000 | 35% |
Two reliefs reduce the tax: personal relief of KES 2,400 a month, and insurance relief of 15% of qualifying premiums, up to KES 60,000 a year.
Since 27 December 2024, an employee's SHIF and Affordable Housing Levy contributions are deductible from taxable pay, and so are pension contributions up to KES 30,000 a month. Contributions to a post-retirement medical fund, up to KES 15,000, and mortgage interest, up to KES 30,000 a month, are also deductible.
You may have heard of a KES 30,000 monthly tax-free threshold. It has been consulted on, but at the time of writing it is not law. Check KRA's PAYE page before you change anything.
PAYE is filed on the P10 return on iTax and paid by the 9th of the following month.
NSSF Tier I and II
From February 2026, NSSF contributions are 6% from the employee and 6% from the employer, on pensionable pay up to KES 108,000. That puts each side's contribution at most KES 6,480 a month. The contribution is split into two tiers:
- Tier I covers pay up to KES 9,000, a contribution of KES 540 each.
- Tier II covers pay from KES 9,000 to KES 108,000, up to KES 5,940 each.
NSSF contributions are remitted to the NSSF by the 9th.
SHIF and the Affordable Housing Levy
SHIF, the Social Health Insurance Fund contribution, is 2.75% of gross pay, with a minimum of KES 300 a month and no cap. It is remitted to the Social Health Authority by the 9th. Late payment costs 2% a month.
The Affordable Housing Levy is 1.5% of gross monthly pay from the employee plus 1.5% from the employer. KRA collects it within 9 working days after the month end, and late payment costs 3% a month.
The NITA levy
Employers pay a NITA levy of KES 50 per employee per month. It is an employer cost; nothing comes off the employee's pay, and KRA does not collect it. NITA's levy page explains how to register as a levy payer, how to pay and when, so read it before your first remittance.
Who collects which deduction
| Deduction | Who pays | Collected by | When |
|---|---|---|---|
| PAYE | Employee | KRA | By the 9th of the following month |
| Affordable Housing Levy | Employee and employer | KRA | Within 9 working days after month end |
| SHIF | Employee | Social Health Authority | By the 9th |
| NSSF | Employee and employer | NSSF | By the 9th |
| NITA levy | Employer | NITA, not KRA | Monthly, as NITA's levy page sets out |
The rule to remember: KRA collects PAYE and the Housing Levy, but not SHIF, NSSF or the NITA levy.
Checking the first run by hand
Before you trust any payroll system with a full team, check one payslip yourself. Take an employee on an ordinary salary, work out NSSF, SHIF and the Housing Levy from the rates above, deduct what the law allows from taxable pay, apply the PAYE bands, subtract personal relief, and compare your answer with the payslip. If the figures agree, you understand the payslip well enough to explain it to the employee. If they do not, find out why before payday, not after.
How Achekam handles each deduction
Achekam's Kenyan payroll calculates PAYE with personal and insurance relief, NSSF Tier I and II, SHIF, the Affordable Housing Levy and the NITA levy. From approved runs it prepares the P10, SHIF, NSSF and NITA schedules, and each employee's P9A for the year.
Each contribution posts to its own liability account, for example PAYE and Housing Levy Payable (KRA), so the ledger shows what you owe to each body separately, and a balance left on one of them is easy to spot.
Some limits to know:
- The table needs confirming. The 2026 Kenyan table ships pre-loaded but unconfirmed, and no run uses it until a named person at your business confirms your own copy.
- NSSF contracting-out. Contracting out of NSSF Tier II is not modelled.
- Schedules in Achekam's layout. Schedules download as Achekam's own CSV layout and a PDF, not in each authority's upload template.
- Filing and paying stay with you. Achekam does not file or pay Kenyan payroll returns. A person records each filing with the reference the portal gave, a second person confirms each payment, and each schedule is finalised by someone other than its preparer.
If your customers pay you by M-Pesa, the set-up is covered in taking M-Pesa live. The eTIMS rules apply to your purchases, not your payroll, as explained in supplier invoices without eTIMS: expenses at risk.
Put the 9th of every month in the payroll calendar, with the Housing Levy's working-day deadline beside it. Most late-payment charges come from dates, not sums.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
