Kenya Small Business Payroll Compliance: NSSF, SHIF, Housing Levy & PAYE
Running a payroll in Kenya involves more than just transfering net pay to an employee's bank account or mobile money account. As an employer, the law designates you as an agent of statutory collection.
Failing to deduct, reconcile, or remit statutory deductions on time exposes your business to heavy financial penalties, interest charges, and personal tax liability for directors.
Use this statutory compliance matrix to keep your payroll aligned with the latest legal frameworks:
Master Statutory Deduction Matrix
| Statutory Head | Collector / Authority | Contribution Base | Rates & Contribution Breakdown | Remittance Deadline |
| NSSF (Social Security) | National Social Security Fund | Pensionable Earnings | 12% Total (6% Employee + 6% Employer match). Split across Tier I & Tier II caps. | 9th of the following month |
| SHIF (Health Insurance) | Social Health Authority (SHA) | Gross Monthly Income | 2.75% of Gross Salary (Employee deduction; minimum floor of KES 300). | 9th of the following month |
| Affordable Housing Levy | KRA (Agency Revenue) | Gross Monthly Income | 3.0% Total (1.5% Employee + 1.5% Employer match). | 9th of the following month |
| PAYE (Income Tax) | Kenya Revenue Authority | Taxable Income (after allowable deductions) | Graduated bands (10% to 35%) minus Personal Relief & Insurance Relief |