Kenya PAYE Tax Calculator Guide 2025/26

Kenya's Pay-As-You-Earn (PAYE) system is one of the more complex in Africa, with multiple statutory deductions layered on top of the tax bands. Between SHIF (which replaced NHIF), the two-tier NSSF, the Affordable Housing Levy, personal relief, and insurance relief, calculating your actual take-home pay requires careful attention to detail.

This guide covers every component of the Kenya PAYE calculation for the 2025/26 tax year — the period from July 2025 to June 2026. We include actual rates, thresholds, and a full worked example at KES 100,000 monthly gross salary. You can also use our Kenya PAYE Calculator to get instant results.

Kenya PAYE Tax Bands 2025/26

Kenya uses a graduated monthly tax table. Your taxable income (gross salary minus allowable deductions like NSSF) is run through these bands:

Note that the first KES 24,000 is taxed at 10%, not zero. Kenya does not have a tax-free threshold — instead, it uses a personal relief of KES 2,400/month which is subtracted from the calculated tax. This effectively creates a zero-tax zone for very low earners.

The 32.5% and 35% bands were introduced in 2023 and affect high earners above KES 500,000 monthly (KES 6M annually). For most Kenyan employees earning in the KES 30,000–200,000 range, the 10%, 25%, and 30% bands are the relevant ones.

SHIF — Replacing NHIF

The Social Health Insurance Fund (SHIF) replaced the National Hospital Insurance Fund (NHIF) in October 2024 under the Social Health Insurance Act. The key change is how contributions are calculated:

NHIF (Old System)

NHIF used fixed contribution bands based on salary ranges. For example, someone earning KES 100,000 paid a fixed KES 1,700/month regardless of their exact salary within that band. The maximum NHIF contribution was KES 1,700/month.

SHIF (Current System)

• Employee contribution: 2.75% of gross salary
• Employer contribution: 2.75% of gross salary
• Total: 5.5% of gross salary (shared equally)
• No cap: Unlike NHIF, there is no maximum contribution — it scales with salary

For a KES 100,000 earner, SHIF is KES 2,750/month (employee share), compared to KES 1,700 under the old NHIF. This is a significant increase for employees earning above approximately KES 62,000/month, where the old NHIF cap kicks in.

SHIF is not tax-deductible — it does not reduce your taxable income for PAYE purposes.

NSSF Tier I & Tier II

Kenya's National Social Security Fund operates a two-tier system under the NSSF Act 2013:

Tier I (Mandatory)

• Pensionable earnings ceiling: KES 7,000/month
• Employee contribution: 6% of pensionable pay up to KES 7,000 = max KES 420/month
• Employer contribution: 6% matching = max KES 420/month

Tier II (Mandatory)

• Pensionable earnings range: KES 7,001 to KES 36,000/month
• Employee contribution: 6% of pensionable pay in this range = max KES 1,740/month
• Employer contribution: 6% matching = max KES 1,740/month

Maximum total employee NSSF: KES 420 + KES 1,740 = KES 2,160/month

NSSF contributions are tax-deductible — they reduce your taxable income before the PAYE bands are applied. For anyone earning KES 36,000 or above per month, the NSSF deduction is capped at KES 2,160.

Affordable Housing Levy (AHL)

The Affordable Housing Levy was introduced under the Affordable Housing Act 2024. It funds the government's social housing programme.

• Employee contribution: 1.5% of gross salary
• Employer contribution: 1.5% of gross salary
• No cap: The levy scales with salary
• Tax treatment: AHL is not tax-deductible

For a KES 100,000 earner, AHL is KES 1,500/month. This is a relatively new deduction that many Kenyan employees are still adjusting to seeing on their payslips.

Personal & Insurance Relief

Personal Relief

Every resident individual taxpayer receives a personal relief of KES 2,400 per month (KES 28,800 per year). This is a tax credit — it is subtracted directly from the calculated tax, not from taxable income. The personal relief effectively means that no Kenyan employee pays PAYE tax on the first KES 24,000 of monthly income (since 10% of KES 24,000 = KES 2,400, which equals the relief).

Insurance Relief

If you have a qualifying health insurance policy (including employer-provided medical cover), you can claim an insurance relief of 15% of premiums paid, up to a maximum of KES 5,000 per month (KES 60,000 per year). This is also a tax credit subtracted from calculated tax.

To claim insurance relief, your employer needs evidence of the insurance policy and premiums paid. Many employers automatically apply this for staff on group medical cover.

Worked Example: KES 100,000 Monthly Gross

Let us calculate the full payslip for an employee earning KES 100,000 per month gross, with employer-provided medical insurance costing KES 10,000/month (employee share):

Step 1: Statutory Deductions (Pre-Tax)

Step 2: Taxable Income

Taxable Income = KES 100,000 − KES 2,160 (NSSF) = KES 97,840

Step 3: Apply Tax Bands

Step 4: Apply Reliefs

PAYE Tax = KES 24,135 − KES 3,900 = KES 20,235

Step 5: Post-Tax Deductions

Step 6: Net Pay

On a KES 100,000 gross salary, your take-home is approximately KES 73,355 — an effective deduction rate of about 26.6%. The largest single deduction is PAYE tax at KES 20,235 (20.2%), followed by SHIF, NSSF, and AHL.

Want to run your own numbers? Use our Kenya PAYE Calculator — it handles all the bands, reliefs, and deductions instantly.

Kenya Revenue Authority (KRA) publishes the official PAYE tax tables on their website at kra.go.ke. Always verify current rates against the official source.