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SHA for employers in Kenya: what you must deduct and remit (2026)

Deduct 2.75% of gross salary. Remit to employers.sha.go.ke by the 9th. SHIF is now before PAYE. Late payment attracts 2%. Employer overview for Kenyan payrolls in 2026.

AO
by Reviewed by Michael Mwangi 10 min read Updated 12 September 2026Verified 12 Sept 2026

The employer obligation in one sentence

Deduct 2.75% of every employee's gross monthly pay, add it to your monthly remittance file, and pay it to SHA by the 9th of the following month via the employer portal.

This page is a Tier 1 overview. If you need deep operational detail (payroll integration, retrospective corrections, split-payroll rules, expatriate treatment), it is coming in a dedicated employer cluster. For now, the essentials.

The rate

  • Rate: 2.75% of gross monthly income [Source 1].
  • Floor: KES 300/month. Any employee whose 2.75% works out below KES 300 pays the floor.
  • Cap: None. There is no upper limit.
  • Employer share: None. SHA is 100% employee-funded. The employer's role is deduction and remittance, not co-funding.

For worked examples across salary bands, see how much is SHA per month.

What counts as "gross"

Gross monthly income, for SHA purposes, is total cash remuneration paid to the employee that month, before any statutory or voluntary deductions. It includes:

  • Basic salary
  • House allowance
  • Transport / travel allowance (cash)
  • Commission and sales bonuses paid that month
  • Overtime, shift, and acting allowances
  • One-off cash bonuses paid in the payroll cycle

It does not include employer-side contributions like the employer NSSF share, the employer pension top-up, or in-kind benefits that are not cash paid to the employee. Use your payroll software's SHIF/SHA field. If your software still has an "NHIF" field, upgrade or reconfigure; the tables and ordering are not the same.

SHIF is now before PAYE (this changed)

This is the most important employer-facing change in the transition from NHIF to SHA, and it is still being mis-applied on some payrolls in 2026.

The Tax Laws (Amendment) Act 2024, gazetted and effective from 27 December 2024, makes SHIF an allowable deduction against taxable income [Source 2]. Practically, the correct ordering on a Kenyan payslip in 2026 is:

  1. Gross pay
  2. Less NSSF Tier I + II (employee share)
  3. Less SHIF (2.75% of gross)
  4. Less Affordable Housing Levy (1.5% of gross)
  5. Less registered pension contributions (up to statutory cap)
  6. PAYE is computed on the remainder
  7. Less PAYE
  8. Net pay

This is the opposite of the old NHIF treatment. NHIF used to come off net pay after PAYE. If your payroll still calculates SHIF from net or after PAYE, PAYE is being over-collected and employees are being under-paid on their net. See our dedicated explainer: is SHA deducted before or after tax in Kenya?

For a like-for-like NHIF vs SHA comparison, including how the rate and cap changed, see SHA vs NHIF: what changed.

Remittance deadline: the 9th

SHA follows the same monthly rhythm as PAYE and NSSF. Deductions from a given month must be paid to SHA by the 9th of the following month. A February deduction is due by 9 March. A December deduction is due by 9 January.

Under section 27(6) of the Social Health Insurance Act 2023, late remittance attracts a 2% penalty on the outstanding amount [Source 3]. The penalty is per period, not one-off, so a consistently late payroll compounds.

Employer registration and portal

Every Kenyan employer must register with SHA before running the first monthly remittance. Registration is at employers.sha.go.ke.

Documents typically required:

  • Business registration (Certificate of Incorporation, or Business Name registration)
  • KRA PIN
  • Authorised representative with a valid National ID
  • Company contact and physical address

Once registered, you upload your monthly return (employee IDs, gross pay, computed 2.75%), reconcile the total, and pay via the portal's payment instructions. Retain confirmation, this is your audit trail.

What happens if you do not register

Unregistered employers still owe SHA on behalf of every employee. When SHA identifies unregistered payrolls (via KRA data sharing, NSSF cross-check, or employee complaint), the employer is retroactively assessed for arrears plus the 2% monthly penalty. Because employees are still meant to be covered from the moment they earn a salary, unregistered employers also face reputational exposure if an employee has a hospital visit denied for lack of active SHA coverage.

There is no benefit to delay. Register in the month you take on your first employee.

What employees should see on the payslip

A correctly configured 2026 Kenyan payslip shows SHIF as a line item deducted from gross, appearing before the PAYE calculation. If your employees ask why the number changed from the old NHIF band, point them to SHA vs NHIF: what changed. If they ask what SHA covers, point them to SHA household coverage and the paybill background at /paybill/sha.

Common employer mistakes to avoid

  • Computing SHIF on basic salary only. The base is gross cash remuneration, not basic.
  • Applying an old NHIF cap. SHA has no upper cap. A CEO on KES 800,000 pays KES 22,000, not KES 1,700.
  • Deducting SHIF after PAYE. Wrong order. SHIF is before PAYE under the Tax Laws (Amendment) Act 2024.
  • Missing the 9th. The 2% penalty compounds. Set a calendar reminder for the 5th to build in a buffer.
  • Reporting the wrong National ID. Every employee record must have the exact ID that matches the SHA member registration. Mismatch means the deduction lands but does not credit the employee's coverage. This is the Tier 1 "paid but inactive" complaint pattern; see payment not reflecting.
  • Assuming SHA covers itself with dependants automatically. Employees still need to register household members via afyayangu.go.ke.

What is coming for employers

This is the entry-point employer page. Deeper operational content, payroll software configuration, expat treatment, split payrolls, penalty appeal process, employee-level troubleshooting, is being built out. Cross-links will land on this page as those guides publish. For any specific question in the meantime, the SHA employer helpline routes through the same toll-free number, 0800 720 601.

Sources

  1. SHA premium rates (2.75%, KES 300 floor, no cap): sha.go.ke/premium-rates, accessed 26 August 2026.
  2. Tax Laws (Amendment) Act 2024, effective 27 December 2024. SHIF is an allowable deduction against taxable income (deducted before PAYE).
  3. Section 27(6), Social Health Insurance Act 2023. 2% penalty on late employer remittances.
  4. Employer portal: employers.sha.go.ke.
  5. Employer remittance deadline of the 9th of the following month, per SHA published guidance.
  6. SHA toll-free helpline 0800 720 601.