How is PAYE calculated in Kenya in 2026?

PAYE in Kenya is calculated using progressive tax bands: 10% for the first KES 24,000, 25% for KES 24,001–32,333, 30% for KES 32,334–500,000, 32.5% for KES 500,001–800,000, and 35% above KES 800,000. A personal relief of KES 2,400 is then deducted from the gross tax. NSSF, SHIF, and Housing Levy are deducted from gross salary before computing taxable income.

What is the NSSF contribution rate in 2026?

In 2026, NSSF follows the Phase 4 schedule: 6% of pensionable earnings up to KES 108,000. The maximum employee contribution is KES 6,480 per month (Tier I: KES 540 on the first KES 9,000, Tier II: KES 5,940 on the next KES 99,000). The employer matches the contribution.

What is SHIF and how much is deducted from salary in Kenya?

SHIF (Social Health Insurance Fund) replaced NHIF from October 2024. The deduction is 2.75% of your gross salary with a minimum of KES 300 and no upper cap. SHIF is fully tax-deductible, meaning it reduces your taxable income before PAYE is applied.

What is the Affordable Housing Levy in Kenya?

The Affordable Housing Levy (AHL) is 1.5% of gross salary, deducted from both employee and employer with no upper cap. It is fully tax-deductible effective December 2024. The levy funds Kenya's national affordable housing program.

Is the Housing Levy refundable in Kenya?

No. The Affordable Housing Levy is a non-refundable mandatory contribution. It is deducted from your gross salary and matched by your employer to fund the national housing development agenda.

What is insurance relief in Kenya and how is it calculated?

Insurance relief allows you to claim 15% of your insurance premiums paid as a relief against PAYE. The maximum relief is KES 15,000 per month (KES 180,000 per year). This applies to life insurance, health insurance, and education policies for yourself or dependants.

What is the personal relief in Kenya for 2026?

The personal relief for all resident individual taxpayers in Kenya is KES 2,400 per month (KES 28,800 per year). It is automatically subtracted from your gross PAYE tax to arrive at the net PAYE payable.

How is taxable income calculated in Kenya?

Taxable income = Gross Salary − NSSF − SHIF − Housing Levy. Both SHIF and Housing Levy became tax-deductible from December 2024 under the Tax Laws (Amendment) Act, 2024. PAYE bands are then applied to this reduced taxable income.

What is the difference between NHIF and SHIF in Kenya?

NHIF (National Hospital Insurance Fund) was replaced by SHIF (Social Health Insurance Fund) in October 2024. Unlike NHIF which had fixed graduated bands, SHIF is a flat 2.75% of gross salary with a minimum of KES 300. SHIF is also tax-deductible, whereas NHIF was not.

UPDATED FOR MARCH 2026

PAYE Calculator Kenya 2026

Calculate your net salary with accurate NSSF, SHIF, Housing Levy, and PAYE deductions. Updated for NSSF Phase 4 and March 2026 regulations.

Key Tax Changes in Kenya (2026)

NSSF Phase 4

Effective Feb 2026, NSSF increases to 6% of earnings up to KES 108,000 (Max KES 6,480).

SHIF & Housing

SHIF (2.75%) and Housing Levy (1.5%) are both fully tax-deductible, reducing your PAYE.

PAYE Bands

New 35% bands for earners above KES 800,000 continue to apply in 2026.

Enter Your Salary Details

Gross Monthly Salary (KES)

KES

Enter your monthly gross salary before any deductions

KES 0 KES 10,000,000

Statutory Period

NSSF Phase 4: From February 2026, NSSF contributions increase to 6% of earnings up to KES 108,000 (max KES 6,480/month).

Insurance Premium (for relief)

15% relief up to KES 15,000

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Your Salary Breakdown

Your Take-Home Pay

KES 0

0% of gross salary

Salary Breakdown

Net Pay PAYE NSSF SHIF Housing

Item	Amount
Gross Salary	KES 0
NSSF Contribution	- KES 0
SHIF Contribution	- KES 0
Housing Levy	- KES 0
Taxable Income	KES 0
Gross PAYE	KES 0
Personal Relief	- KES 2,400
Insurance Relief
Net PAYE	- KES 0
Net Salary	KES 0

Total Deductions

KES 0

Effective Tax Rate

PAYE as % of gross

How PAYE is Calculated in Kenya

Deduction Order

1
Gross Salary
Your total monthly earnings before any deductions
2
NSSF (6%)
Pension contribution deducted first
3
SHIF (2.75%)
Health insurance, min KES 300
4
Housing Levy (1.5%)
Affordable housing contribution
5
PAYE Tax
Progressive tax on taxable income, minus reliefs

PAYE Tax Bands (Monthly)

Income Band	Rate
KES 0 – 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%

Personal relief of KES 2,400 is deducted from gross PAYE.

NSSF Phase 4 Rates (2026)

• Tier I: 6% up to KES 9,000
• Tier II: 6% up to KES 108,000 total
• Maximum contribution: KES 6,480

Understanding Your Payslip in 2026

Everything you need to know about Kenyan statutory deductions and net pay calculations.

SHIF Explained

The Social Health Insurance Fund (SHIF) replaces NHIF at a rate of 2.75% of your gross salary. Unlike the old system, this mandatory contribution ensures equity in national healthcare funding.

Housing Levy

A mandatory 1.5% contribution towards the Affordable Housing Program. This levy is deducted from your gross pay and matched by your employer to fund housing projects.

NSSF Tiers

Pension contributions follow a Tiered system. 2026 rates set the Lower Limit to KES 9,000 and Upper Limit to KES 108,000 for maximum savings.

Why Choose the Statum PAYE Calculator Kenya 2026?

Navigating Kenyan tax laws can be complex. Whether you're an employer planning payroll or an employee verifying your net salary, accuracy is paramount. Our Free Net Salary Tool is engineered with the precise 2026 statutory formulas from the Kenya Revenue Authority (KRA), NSSF, and the Ministry of Health.

We strictly adhere to the latest Finance Act provisions, ensuring that every shilling deducted for PAYE, SHIF, and the Affordable Housing Levy is accounted for. Unlike other calculators that may rely on outdated rates, Statum updates in real-time as legislation changes.

This tool is optimized as a Progressive Web App (PWA), meaning you can install it on your phone and calculate salaries even when offline. We prioritize your data privacy—all calculations happen locally in your browser, meaning your financial data never leaves your device.

Frequently Asked Questions

PAYE (Pay As You Earn) is calculated using progressive tax bands on your taxable income. The first KES 24,000 is taxed at 10%, KES 24,001–32,333 at 25%, KES 32,334–500,000 at 30%, KES 500,001–800,000 at 32.5%, and above KES 800,000 at 35%. A personal relief of KES 2,400 is then deducted from the gross PAYE to get your net PAYE. NSSF, SHIF, and Housing Levy are deducted from your gross salary first to arrive at your taxable income.

In 2026, NSSF follows the Phase 4 schedule: 6% of pensionable earnings up to KES 108,000 (Tier I on the first KES 9,000 = KES 540, Tier II on the next KES 99,000 = up to KES 5,940). The maximum employee contribution is KES 6,480 per month, matched by your employer.

SHIF (Social Health Insurance Fund) replaced NHIF in October 2024. It is 2.75% of your gross salary with a minimum deduction of KES 300 and no upper cap. Unlike NHIF, SHIF is fully tax-deductible — meaning it reduces your taxable income before PAYE is applied, saving you additional tax.

The Affordable Housing Levy (AHL) is 1.5% of your gross salary with no cap. Both you and your employer contribute 1.5% each. Effective December 2024, the levy is fully tax-deductible, reducing your taxable income before PAYE calculation.

No. The Affordable Housing Levy is a non-refundable mandatory contribution deducted from your gross salary to fund Kenya's national housing development programme. You cannot claim it back, but you will benefit from the levy through access to affordable housing units over time.

Insurance relief allows you to claim 15% of insurance premiums paid as a reduction against your PAYE. The maximum is KES 15,000 per month (KES 180,000/year). It applies to life, health, and education insurance premiums for yourself or your dependants. Enter your monthly premium in the calculator to see your relief.

Every resident employee in Kenya receives a personal relief of KES 2,400 per month (KES 28,800 per year). This is automatically deducted from your gross PAYE to arrive at your net PAYE payable. You do not need to apply for it — your employer applies it through payroll.

Taxable income = Gross Salary − NSSF − SHIF − Housing Levy. Since December 2024 (Tax Laws Amendment Act, 2024), both SHIF and Housing Levy are tax-deductible, reducing the income on which PAYE is charged. PAYE tax bands are then applied to this taxable income.

NHIF (National Hospital Insurance Fund) was replaced by SHIF (Social Health Insurance Fund) in October 2024. NHIF used fixed monthly amounts based on salary bands (e.g. KES 1,700 for those earning above KES 100,000). SHIF uses a flat percentage — 2.75% of gross salary with a minimum of KES 300. SHIF is also tax-deductible, while NHIF was not.