Kenya's Pay-As-You-Earn system layers income tax bands with statutory deductions and reliefs. In 2026, the biggest practical traps are stale NSSF limits, treating SHIF or the Affordable Housing Levy as post-tax-only deductions, and using old payroll sheets that do not match the current KRA PAYE page.
Primary sources reviewed on June 17, 2026. This guide covers the current PAYE bands, SHIF, Affordable Housing Levy, NSSF Year 4, personal relief, insurance relief, and a worked example at KES 100,000 monthly gross salary. Use the Kenya PAYE Calculator when you want the instant take-home pay number.
Kenya PAYE Tax Bands
KRA says employers should apply the individual income tax bands introduced under the Finance Act 2023. The monthly PAYE table is:
| Monthly taxable income | Rate | Annual equivalent |
|---|---|---|
| First KES 24,000 | 10% | First KES 288,000 |
| Next KES 8,333 | 25% | Next KES 100,000 |
| Next KES 467,667 | 30% | Next KES 5,612,000 |
| Next KES 300,000 | 32.5% | Next KES 3,600,000 |
| Above KES 800,000 | 35% | Above KES 9,600,000 |
The first KES 24,000 is taxed at 10%, not zero. Kenya uses personal relief of KES 2,400 per month as a tax credit after tax is calculated. That is why a low earner can end up with little or no PAYE even though the first band is taxable.
SHIF Treatment in PAYE
The Social Health Insurance contribution replaced the old NHIF fixed-band model. For salaried households, the Social Health Insurance Regulations set the contribution at 2.75% of gross salary or wage, with a minimum monthly contribution of KES 300.
For PAYE modelling, SHIF should not be left outside the taxable-income calculation. KRA's PAYE page lists contributions made to the Social Health Insurance Fund among allowable deductions in determining taxable employment income.
NSSF Year 4 From February 2026
Kenya's NSSF deduction changed in February 2026 when Year 4 of the phased contribution schedule took effect. The official NSSF notice to employers lists a lower earnings limit of KES 9,000 and an upper earnings limit of KES 108,000.
| NSSF tier | 2026 band | Employee rate | Maximum employee amount |
|---|---|---|---|
| Tier I | Up to KES 9,000 | 6% | KES 540 |
| Tier II | Above KES 9,000 up to KES 108,000 | 6% | KES 5,940 |
| Total | Up to KES 108,000 | 6% | KES 6,480 |
The employer pays the same amount separately. For a KES 100,000 salary, the employee NSSF amount is KES 6,000: KES 540 for Tier I plus KES 5,460 for Tier II. For salaries at or above KES 108,000, the employee NSSF amount is capped at KES 6,480.
NSSF later published a June 4, 2026 clarification saying the NSSF Act remains in force, the Year 4 cycle remains in effect, and employers and workers should disregard opinions about reverting to the old KES 200 contribution.
Affordable Housing Levy
The Affordable Housing Levy is 1.5% of the employee's gross monthly salary, with a matching 1.5% employer contribution. KRA's AHL notice says remittance is due by the ninth working day after the end of the month in which the salary was due.
KRA's PAYE page also lists the amount deducted as Affordable Housing Levy under the Affordable Housing Act, 2024 among allowable deductions in determining taxable employment income. That is an important update for older payroll explanations that treated AHL as a pure after-tax deduction.
Personal and Insurance Relief
Every resident individual taxpayer receives personal relief of KES 2,400 per month, or KES 28,800 per year. This is a tax credit, so it reduces calculated PAYE directly.
KRA also lists insurance relief at 15% of premiums paid, up to a maximum relief of KES 60,000 per year. In a monthly payroll model, that is commonly treated as a maximum of KES 5,000 relief per month when the qualifying premium evidence supports it.
Worked Example: KES 100,000 Monthly Gross
This example uses a KES 100,000 monthly gross salary and a qualifying insurance premium of KES 10,000 for relief purposes. It is a planning estimate, not an official payslip.
Step 1: Allowable Deductions Before PAYE Bands
| Deduction | Calculation | Amount |
|---|---|---|
| NSSF Tier I | 6% x KES 9,000 | KES 540 |
| NSSF Tier II | 6% x (KES 100,000 - KES 9,000) | KES 5,460 |
| SHIF | 2.75% x KES 100,000 | KES 2,750 |
| AHL | 1.5% x KES 100,000 | KES 1,500 |
| Total allowable deductions | KES 10,250 |
Taxable income = KES 100,000 - KES 10,250 = KES 89,750.
Step 2: Apply PAYE Bands
| Band | Income in band | Rate | Tax |
|---|---|---|---|
| First band | KES 24,000 | 10% | KES 2,400 |
| Second band | KES 8,333 | 25% | KES 2,083 |
| Third band | KES 57,417 | 30% | KES 17,225 |
| Tax before relief | KES 21,708 | ||
Step 3: Apply Reliefs
| Relief | Calculation | Amount |
|---|---|---|
| Personal relief | Fixed monthly relief | KES 2,400 |
| Insurance relief | 15% x KES 10,000 | KES 1,500 |
| Total relief | KES 3,900 |
PAYE tax = KES 21,708 - KES 3,900 = about KES 17,808.
Step 4: Net Pay
| Item | Amount |
|---|---|
| Gross salary | KES 100,000 |
| Less NSSF | (KES 6,000) |
| Less PAYE | (KES 17,808) |
| Less SHIF | (KES 2,750) |
| Less AHL | (KES 1,500) |
| Estimated net pay | KES 71,942 |
For employer budgeting, add the employer NSSF match of KES 6,000 and the employer AHL match of KES 1,500 on top of gross salary. Those employer costs do not reduce the employee's gross salary, but they matter for total employment cost.
Sources Reviewed
Primary sources reviewed on June 17, 2026:
- KRA PAYE guidance
- NSSF notice to employers, Year 4 contribution rates 2026
- NSSF clarification on the status of contributions
- KRA Affordable Housing Levy collection notice
- Kenya Law, Social Health Insurance Regulations 2024
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Kenya PAYE Calculator →Frequently Asked Questions
Kenya uses five monthly bands: 10% on the first KES 24,000, 25% on the next KES 8,333, 30% on the next KES 467,667, 32.5% on the next KES 300,000, and 35% on income above KES 800,000.
Yes for taxable-income modelling. KRA lists contributions made to SHIF among allowable deductions in determining taxable employment income.
From February 2026, NSSF Year 4 uses a KES 9,000 Tier I lower earnings limit and a KES 108,000 Tier II upper earnings limit. Total max employee NSSF is KES 6,480 per month, and the employer pays the same amount separately.
Every resident taxpayer gets personal relief of KES 2,400 per month, or KES 28,800 per year. This is a tax credit subtracted directly from calculated tax.
KRA lists AHL among allowable deductions in determining taxable employment income. The levy remains a real payslip deduction and is matched separately by the employer.