SHA vs NHIF: what changed on 1 October 2024 (Kenya 2026)

What happened on 1 October 2024

The Social Health Insurance Act 2023 came into force on 1 October 2024, dissolving the National Hospital Insurance Fund (NHIF) and establishing the Social Health Authority (SHA) in its place [Source 1]. Every Kenyan resident was migrated. Employers stopped remitting to NHIF and started remitting to SHA. Facilities stopped billing NHIF and started billing SHA. The old NHIF card was retired for new access, though historical entitlements were carried across.

Side-by-side comparison

Rate and cap: the biggest financial change

NHIF used graduated bands. Under the last NHIF schedule, the top band for high earners was capped at KES 1,700/month regardless of whether you earned KES 100,000 or KES 1 million. Middle-band earners paid figures like KES 800 or KES 1,000.

SHA is a single rule: 2.75% of gross, KES 300 floor, no cap [Source 2]. That means:

• Low earners on KES 15,000 gross pay slightly more (KES 413 vs the old KES 200 band, roughly).
• Middle earners on KES 40,000 to KES 80,000 pay noticeably more (KES 1,100 to KES 2,200 vs the KES 1,000 to KES 1,600 NHIF bands).
• High earners pay dramatically more. A worker on KES 500,000 now pays KES 13,750 to SHA versus KES 1,700 under NHIF. This is the eight-fold jump that dominated the 2024 discussion of the reform.

Full worked table across salary bands is in how much is SHA per month. Model your own number with the SHA contribution calculator.

Tax ordering: SHIF now runs before PAYE

Under NHIF, the deduction sat below PAYE on the payslip. PAYE was computed on gross less NSSF, then NHIF came off the net figure. The Tax Laws (Amendment) Act 2024, effective 27 December 2024, changed this: SHIF is now an allowable deduction against taxable income, so it comes off gross before PAYE is computed [Source 3].

This is small but real. On a KES 80,000 salary, moving SHIF (KES 2,200) above the PAYE line saves roughly the marginal PAYE rate on that KES 2,200. It does not fully offset the higher contribution, especially for middle and high earners, but it does slightly soften it. Full worked example in is SHA deducted before or after tax.

Employers who have not updated payroll to reflect the new ordering are over-collecting PAYE. See SHA for employers.

One fund became three

NHIF was a single fund covering inpatient, outpatient, and specific benefit packages. SHA splits coverage across three funds, each with its own scope [Source 4]:

• Primary Healthcare Fund (PHF). Covers primary care at Level 2 and Level 3 facilities, tax-funded, no direct member contribution.
• Social Health Insurance Fund (SHIF). Where your 2.75% contribution goes. Covers outpatient and inpatient specialised services (consultations, diagnostics, surgery, maternity, renal, mental health, oncology).
• Emergency, Chronic and Critical Illness Fund (ECCIF). Covers emergency stabilisation and chronic/critical illness beyond SHIF limits, tax-funded.

For members this is largely invisible at the point of care, one card, one portal, but it matters if you are reading the annual report or trying to understand where a specific benefit sits.

Two tiers instead of NHIF bands

NHIF had many bands and a separate informal rate. SHA collapses this to two:

• Tier 1, salaried. Employer deducts 2.75% and remits.
• Tier 2, non-salaried. Assessed via Means Testing Instrument at afyayangu.go.ke, then pays direct.

Both tiers use the same rate, floor, and cap. See means testing explained, SHA for the informal sector, and SHA for the unemployed.

Mandatory for everyone

NHIF informal enrolment was in practice voluntary. Many low- and middle-income Kenyans did not enrol until they needed care. SHA closes that door: registration is mandatory for every Kenyan resident under the Social Health Insurance Act 2023 [Source 1]. This is enforced through employer deduction (Tier 1) and through Means Testing plus facility-side eligibility checks at eligibility.sha.go.ke (Tier 2).

What happens to your NHIF card and contributions

• The NHIF card is no longer used for accessing services. Facilities check SHA eligibility, not the old NHIF card.
• Members were auto-migrated from NHIF records to SHA member records at the transition, using National ID as the reconciliation key. If you find you have duplicate records (some members do), resolve at any SHA branch or Huduma Centre. See payment not reflecting for the duplicate-record pattern.
• Historical NHIF contributions do not translate into SHA credit, this is a new scheme with its own contribution ledger.

Related SHA guides

• SHA contribution calculator
• SHA paybill (200222) reference
• How much is SHA per month?
• Is SHA deducted before or after tax?
• SHA for employers
• SHA payment not reflecting: what to do
• SHA means testing explained
• SHA for the unemployed
• SHA for the informal sector and self-employed
• SHA minimum contribution (KES 300)
• SHA household coverage

Sources

1. Social Health Insurance Act 2023, in force from 1 October 2024, dissolving NHIF and establishing SHA.
2. SHA premium rates (2.75%, KES 300 floor, no cap): sha.go.ke/premium-rates, accessed 26 August 2026.
3. Tax Laws (Amendment) Act 2024, effective 27 December 2024. SHIF is an allowable deduction against taxable income (deducted before PAYE).
4. SHA fund architecture (PHF, SHIF, ECCIF): sha.go.ke/primary-healthcare-fund, sha.go.ke/social-health-insurance-fund, sha.go.ke/emergency-chronic-critical-illness-fund, all accessed 26 August 2026.
5. Section 27(6), Social Health Insurance Act 2023. 2% penalty on late employer remittances.
6. Member portal afyayangu.go.ke, eligibility check eligibility.sha.go.ke, employer portal employers.sha.go.ke.