The full 2026 deduction stack — PAYE bands, SHIF at 2.75%, NSSF Tier I/II, and the housing levy — with the deadlines, the order of operations, and a worked payslip so you can see exactly where the money goes.
| Deduction | 2026 rate | Due |
|---|---|---|
| PAYE | 10% / 25% / 30% / 32.5% / 35% on taxable income | 9th |
| SHIF | 2.75% of gross salary, minimum KES 300 | 9th |
| NSSF | 6% employee + 6% employer, Tier I/II (up to KES 4,320 total) | 9th |
| AHL | 1.5% employee + 1.5% employer match | 9th |
Payroll isn't "subtract everything from gross." The order is fixed, and getting it wrong over- or under-deducts:
| Monthly taxable income | Rate |
|---|---|
| Up to KES 24,000 | 10% |
| KES 24,001 – 32,333 | 25% |
| KES 32,334 – 500,000 | 30% |
| KES 500,001 – 800,000 | 32.5% |
| Above KES 800,000 | 35% |
Taxable income gets the KES 2,400 monthly personal relief applied after the bands are calculated.
The Social Health Insurance Fund replaced NHIF. Employees contribute 2.75% of gross salary with a minimum of KES 300 — even on a very small salary, the minimum applies. It's remitted to the Social Health Authority and it reduces taxable income for PAYE.
Under the NSSF Act, 2013, both employee and employer contribute 6% of pensionable earnings. It's split into two tiers:
That puts the maximum employee deduction at KES 4,320 a month, with an equal employer match.
The status of NSSF contribution rates has been under legal clarification during 2026 (see the June 2026 NSSF clarification). Confirm the current position with your accountant before each payroll run.
The Affordable Housing Levy is 1.5% of gross salary, matched by a further 1.5% from the employer, remitted to KRA. It's deducted before PAYE is calculated.
Let's put the stack to work on a KES 50,000 monthly salary:
| Line | Item | KES |
|---|---|---|
| 1 | Gross salary | 50,000 |
| 2 | Less SHIF (2.75%) | −1,375 |
| 3 | Less NSSF (Tier I + II, 6%) | −3,000 |
| 4 | Less AHL (1.5%) | −750 |
| 5 | Taxable income | 44,875 |
| 6 | PAYE (after personal relief KES 2,400) | −5,846 |
| 7 | Net pay | ≈ 39,029 |
Roughly KES 10,970 leaves the payslip before net pay — about 22% of gross — and your business owes an additional employer share on top (6% NSSF and 1.5% AHL). This is an illustration for a single set of figures; the exact numbers depend on the employee's allowances, reliefs, and pension arrangements.
The PAYE return (P10) and payment are both due by the 9th of the following month. Getting it wrong is expensive:
Finance Bills can adjust thresholds and rates each year. Always confirm the current figures on the KRA PAYE pages before processing a payroll run.
Tieghtsuite computes this stack on every payslip — SHIF, NSSF, AHL, PAYE — and files the numbers in one place. If you're about to hire your first employee, our hiring checklist is the natural next read.
Payslips with PAYE, SHIF, NSSF, and AHL calculated for you — set up in about five minutes, no card required.
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