Kenya Employer Payroll Compliance Calendar 2026
You've just hired your first employee. Congratulations. Now you're responsible for four statutory deductions, three different remittance deadlines, two separate agencies, and one very unhappy KRA if you get it wrong.
This guide gives you the complete monthly compliance calendar for Kenyan employers — PAYE, NSSF, SHIF, and Affordable Housing Levy — with exact rates, deadlines, penalties, and a step-by-step workflow you can follow every month.
1. The Four Statutory Deductions at a Glance
| Deduction | Rate | Who Pays | Deadline | Agency |
|---|---|---|---|---|
| PAYE | 10-35% progressive | Employee (you deduct) | 9th of following month | KRA |
| NSSF Year 4 | 6% each (tiered) | Both employee + employer | 9th of following month | NSSF |
| SHIF | 2.75% of gross | Employee (you deduct) | 9th of following month | SHA |
| AHL | 1.5% employee + 1.5% employer | Both | 9th working day | KRA |
2. PAYE — Pay As You Earn
Current PAYE Bands (2026)
| Monthly Income (KES) | Tax Rate |
|---|---|
| 0 – 24,000 | 10% |
| 24,001 – 32,333 | 25% |
| 32,334 – 500,000 | 30% |
| 500,001 – 800,000 | 32.5% |
| Above 800,000 | 35% |
Personal Relief
- KES 2,400 per month (deducted from gross PAYE)
How to Calculate PAYE (Simplified)
- Start with gross salary
- Subtract NSSF contribution (employee portion)
- Subtract SHIF contribution
- Subtract AHL contribution (employee portion)
- Apply PAYE bands to remaining taxable income
- Subtract personal relief (KES 2,400)
- Result = PAYE to remit to KRA
Example
Gross salary: KES 100,000
- NSSF (Tier I): KES 9,000 × 6% = KES 540 (employee; employer matches)
- NSSF (Tier II): (KES 100,000 − KES 9,000) × 6% = KES 5,460 (employee; employer matches)
- SHIF: KES 100,000 × 2.75% = KES 2,750
- AHL (employee): KES 100,000 × 1.5% = KES 1,500
Taxable income: KES 100,000 − KES 6,000 employee NSSF − KES 2,750 SHIF − KES 1,500 employee AHL = KES 89,750. The employer also pays a matching KES 6,000 NSSF contribution; that matching amount is not deducted from the employee’s taxable pay.
PAYE calculation:
- First KES 24,000 @ 10% = KES 2,400
- Next KES 8,333 @ 25% = KES 2,083.25
- Remaining KES 57,417 @ 30% = KES 17,225.10
- Total before relief: KES 21,708.35
- Less personal relief: KES 2,400
- PAYE payable: KES 19,308.35
PAYE Remittance
- File via iTax portal by the 9th of the following month
- Use the latest simplified P10 return published by KRA; the version number can change.
- Late payment: 5% of the unpaid tax, plus simple interest at 1% per month or part of a month on the unpaid tax. A separate late-filing penalty may apply under the Tax Procedures Act.
3. NSSF — National Social Security Fund
Year 4 Rates (Effective February 2026)
| Tier | Earnings Band | Employee | Employer | Total |
|---|---|---|---|---|
| Tier I | Up to KES 9,000 | KES 540 | KES 540 | KES 1,080 |
| Tier II | KES 9,001 – 108,000 | 6% | 6% | 12% |
| Combined | — | Max KES 6,480 | Max KES 6,480 | Max KES 12,960 |
Key Points
- Lower earnings limit: KES 9,000 (up from KES 6,000 in Year 3)
- Upper earnings limit: KES 108,000 (up from KES 72,000 in Year 3)
- Monthly contribution: 6% from employee, matched by employer
- Maximum per side: KES 6,480/month (KES 12,960 combined)
- Remit by the 9th of the following month via NSSF portal
Penalties
- Late payment: 5% of contribution due per month
- Non-registration: Up to KES 20,000
4. SHIF — Social Health Insurance Fund
Current Rate
- 2.75% of gross salary
- Minimum contribution: KES 300 per month
How It Works
- Employee-funded (deducted from salary)
- Employer's responsibility to deduct and remit
- Remit to SHA by the 9th of the following month
- Covers hospital and medical expenses for the employee
Important Note
SHIF replaced NHIF in October 2024. Unlike the old NHIF slab-based rates, SHIF is a flat percentage of gross salary.
Penalties
- Late remittance: 2% of unpaid amount per month
- Non-compliance: Fines up to KES 2 million, imprisonment up to 3 years, or both
5. AHL — Affordable Housing Levy
Current Rate
- Employee: 1.5% of gross monthly salary
- Employer: 1.5% of gross monthly salary (separate expense)
- Combined: 3% of gross salary
Remittance
- Deadline: 9th working day of the following month
- Filed through KRA iTax portal
- Employee deduction + employer contribution remitted separately
Budget Impact
A salary offer of KES 100,000 creates:
- Employee AHL: KES 1,500 (deducted from salary)
- Employer AHL: KES 1,500 (additional employer cost)
- Total AHL: KES 3,000
6. Monthly Compliance Calendar
| Date | Action |
|---|---|
| 1st-3rd | Close payroll for previous month |
| 3rd-5th | Calculate PAYE, NSSF, SHIF, AHL for each employee |
| 5th-7th | Prepare P10 return (KRA), NSSF schedule, SHA remittance |
| 7th-8th | Review and approve all calculations |
| By the 9th | File and pay PAYE; file the NSSF return before paying contributions; remit SHIF. |
| 9th working day | Remit the Affordable Housing Levy (AHL) to KRA. |
| 9th-15th | Check acknowledgements, reconcile payroll records and follow up submission errors after filing on time. |
| 20th | File VAT/TOT returns (if applicable) |
| End of month | Prepare P9 forms for employees (by 31 January) |
7. Simplified P10 Return
KRA publishes a simplified P10 return for each filing period. Use the latest version on KRA’s publications portal; the version number and fields can change. The form includes:
- Employee PIN, name, resident status, disability status
- Total cash pay, car benefit, meals, non-cash benefits, housing
- SHIF, NSSF, pension, post-retirement medical fund, mortgage interest
- Affordable Housing Levy, personal relief, insurance relief
- Self-assessed PAYE
Download the form from: KRA Publications
8. Common Mistakes to Avoid
- Missing the 9th deadline — Interest and penalties accumulate fast
- Forgetting employer AHL — This is an additional cost, not deducted from employee
- Using old NSSF Year 3 rates — Year 4 limits are higher (KES 9,000 lower, KES 108,000 upper)
- Applying old NHIF rates — Use SHIF 2.75% flat rate
- Not issuing payslips — Required by Employment Act; must show all deductions
- Mixing up housing allowance with AHL — Housing allowance is contractual; AHL is statutory
- Using one minimum wage figure — Varies by occupation and location
9. What You Should Do This Week
- [ ] Register as an employer with KRA (if not done)
- [ ] Register with NSSF
- [ ] Register with SHA
- [ ] Set up payroll software or spreadsheet with correct rates
- [ ] Create a monthly compliance calendar
- [ ] Download the simplified P10 return form
- [ ] Consult a payroll specialist or accountant for first month
Frequently Asked Questions
Can I file PAYE after the 9th?
You should still file as soon as possible. KRA states that late payment attracts a 5% penalty plus simple interest at 1% per month or part of a month on unpaid tax. A separate late-filing penalty may also apply.
Is SHIF the same as NHIF?
No. SHIF replaced NHIF in October 2024. SHIF is 2.75% of gross salary. NHIF was slab-based.
Do I contribute to SHIF as an employer?
No. SHIF is employee-funded at 2.75%. However, you must deduct and remit it — failure makes you personally liable.
Is Affordable Housing Levy mandatory?
Yes. Employee 1.5% + employer 1.5%. Remitted to KRA by the 9th working day.
What if I have casual workers?
Do not apply a blanket KES 1,000 threshold. PAYE, NSSF and SHIF obligations depend on the employment relationship, the nature of the payment and the applicable law. Review contract-of-service status and current authority guidance for each worker; do not assume a label such as “casual” removes every obligation.
Sources and update record
Updated 26 October 2026: Separated PAYE filing penalties from late-payment penalties and interest in the payroll calendar.
Payroll statutory deadlines checked: 12 October 2026.
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