SHIF, NSSF and Housing Levy: What Every Kenyan Employer Must Deduct in 2026

Running payroll in Kenya means keeping up with five separate statutory deductions, each governed by its own Act and each updated periodically by the relevant authority. Here is where things stand.

SHIF — Social Health Insurance Fund

SHIF replaced NHIF under the Social Health Insurance Act 2023. Employers deduct 2.75% of an employee's gross monthly salary, subject to a minimum contribution of KES 300, and remit it through the SHIF portal alongside a monthly return.

NSSF — Tier I & Tier II

Under the NSSF Act 2013 phased implementation, contributions are split into two tiers: Tier I covers pensionable pay up to the lower earnings limit, and Tier II covers pay between the lower and upper earnings limits. Both the employee and employer contribute 6% each, and the employer is responsible for remitting the combined amount.

Affordable Housing Levy

Under the Affordable Housing Act 2023, employees contribute 1.5% of gross pay and employers match it with a further 1.5%. Since the Tax Laws (Amendment) Act 2024, this levy is now an allowable deduction before PAYE is computed, which slightly increases employees' net pay compared to the previous regime.

NITA and HELB

The National Industrial Training Authority levy is a modest employer-funded contribution per employee. HELB deductions apply only where an employee has an active loan deduction order from the Higher Education Loans Board, and the amount varies per order.

Getting it right, every month

Rates and thresholds change periodically as regulations are reviewed. Payroll software that hard-codes last year's rates will eventually miscalculate deductions. Tornad Payroll updates statutory rates centrally the moment they change, so every client's payroll run reflects the current law without manual intervention.