Kenya Take-Home Pay 2026: PAYE, NSSF, SHIF and Housing Levy

This guide answers one question: how much of a Kenyan salary reaches the bank account in 2026, and why. It covers the order of deductions, the legal source for each one, and where the numbers can differ from what a payslip shows. The figures were checked against KRA's PAYE guidance, the NSSF notice for Year 4 (2026) and SHA's published rules, as at October 2026.

The direct answer: what comes off a Kenyan salary and under which law

Four lines usually decide the net figure. The employee pays NSSF at 6% of pensionable pay, SHIF at 2.75% of gross salary, the Affordable Housing Levy at 1.5% of gross, and PAYE on taxable pay. The first three come off first. PAYE is worked out last, on what is left.

Each deduction has its own legal base. PAYE is charged under the Income Tax Act (Cap. 470), and KRA states that the 10% to 35% bands apply as set by the Finance Act 2023, effective 1 July 2023. NSSF contributions follow the NSSF Act 2013 and the Third Schedule, and the NSSF notice to employers for Year 4 sets the 2026 limits. SHIF comes from the Social Health Insurance Act 2023, and the Affordable Housing Levy comes from the Affordable Housing Act 2024. The rules are general, so check your own contract and payroll setup before relying on any single figure.

How the figure is worked out, step by step

The order matters. Working PAYE on gross pay before the other deductions gives a higher tax bill than the law intends, and many payroll errors start here.

1. Start with gross pay. For the Housing Levy, KRA guidance as an auditing firm reads it treats basic pay plus regular cash allowances as gross. Non-cash benefits and irregular payments such as bonuses are left out of that base.
2. Calculate NSSF. From February 2026 the employee pays 6% of pensionable earnings between KSh 9,000 and KSh 108,000. The first KSh 9,000 gives KSh 540 (Tier I). The band above it, up to the limit, gives 6% of that band (Tier II). The maximum employee share is KSh 6,480 a month.
3. Calculate SHIF. Take 2.75% of gross salary. The minimum is KSh 300 a month and there is no maximum, so the amount keeps rising with pay.
4. Calculate the Affordable Housing Levy. Take 1.5% of gross salary, with no ceiling.
5. Find taxable pay. Subtract the NSSF, SHIF and Housing Levy amounts from gross. Several payroll guides treat SHIF as deductible before PAYE, and the example below follows that approach. Confirm this point in the section on checks at the end.
6. Apply the PAYE bands. The first KSh 24,000 of monthly taxable pay is taxed at 10%. The next band, up to KSh 32,333, is taxed at 25%. Pay from KSh 32,334 to KSh 500,000 is taxed at 30%, pay from KSh 500,001 to KSh 800,000 at 32.5%, and anything above KSh 800,000 at 35%. These monthly limits equal KRA's annual bands divided by 12.
7. Subtract the personal relief. A resident employee gets KSh 2,400 a month (KSh 28,800 a year). It is taken off the tax calculated in step 6, not off taxable pay. If the tax is lower than the relief, PAYE for that month is nil.
8. Calculate net pay. Gross pay minus NSSF, SHIF, the Housing Levy and PAYE gives the take-home figure.

Worked example: KSh 100,000 gross per month

Take a resident employee on a basic salary of KSh 100,000 a month with no other pay. The figures below follow the steps above, using the 2026 NSSF limits.

The employer's matching amounts are separate from this payslip and are not taken from the employee's pay. The employer adds the same NSSF amount of KSh 6,000 (540 plus 5,460) and the same Housing Levy of KSh 1,500. That makes KSh 7,500 a month in employer contributions on these two lines. The employer's SHIF share is not included here, because the sources reviewed disagree on whether SHIF has one (see the checks section).

Cases that change the answer

High earners and the NSSF ceiling. Once pensionable pay reaches KSh 108,000, the NSSF employee deduction stops at KSh 6,480. Above that point only SHIF and the Housing Levy keep rising with pay, because neither has a ceiling. Someone on KSh 150,000 therefore pays the same NSSF as someone on KSh 108,000.

Pay across the change in February 2026. Payslips for January 2026 still use the earlier limits of KSh 8,000 and KSh 72,000, which gave a maximum employee share of KSh 4,320. Anyone comparing payslips across that month will see a step change in NSSF that comes from the new limits, not from a higher rate. The rate stayed at 6%.

Irregular pay. NSSF is worked on wages under the NSSF Act definition, which excludes fluctuating emoluments. The Housing Levy base, as an auditor reads KRA guidance, excludes bonuses, leave allowance and gratuity. PAYE still applies to bonuses and commissions. The effect on a given payslip depends on how each item is labelled in the contract, so ask payroll how each line is treated.

Residence and personal relief. The KSh 2,400 relief applies to resident individuals. Non-residents pay tax at the same bands but do not get the relief, according to PwC's Kenya tax summary. The Housing Levy applies to employees on a Kenyan payroll, including foreign staff, according to a news report on a Court of Appeal ruling dated 25 September 2026 that left the 1.5% rate unchanged.

Insurance premiums. A resident employee who pays qualifying life, health or education premiums can claim insurance relief of 15% of the premium, up to KSh 5,000 a month. This lowers PAYE only for those who hold a qualifying policy.

Leaving mid-month. The deductions follow the pay actually earned in the final month. The sources reviewed do not give a pro-rata rule for NSSF in a part month, so payroll should confirm the method. Terminal dues such as leave pay are governed by separate rules, so they should not be assumed to follow the monthly bands.

Minimum service. The sources reviewed set no minimum period of service before the employee deductions apply. Staff who join mid-year are on payroll from their first paid month.

Common mistakes

The most frequent error is applying 6% NSSF to the whole salary. For anyone above KSh 108,000 that overstates the deduction. The second is using the old KSh 72,000 limit for pay from February 2026 onwards.

Some people apply one flat PAYE rate to all taxable pay. PAYE is progressive, so each band is taxed at its own rate. Others subtract the KSh 2,400 relief from taxable pay instead of from the tax, which understates tax by a large amount on a salary of this size.

The employer's 1.5% match is sometimes taken out of the employee's pay by mistake. It is an extra cost to the employer, not a second deduction from the worker. Finally, old NHIF tables still turn up in spreadsheets. NHIF was replaced by SHIF on 1 October 2024, and its capped flat amounts no longer apply.

What to check with HR, payroll or a lawyer

Three points need a direct answer from the payroll team or the official source before the figures are used for a decision. First, confirm whether SHIF is deducted before PAYE. Several payroll guides say so, but the reader should confirm against the current text of the Income Tax Act and KRA's guidance. Second, confirm the employer's SHIF position. The sources reviewed disagree: one says the cost is shared equally, while SHA's own notices describe the 2.75% as a payroll deduction from the employee's salary. Third, confirm the Housing Levy deadline. Some guides say the levy is due by the 9th of the following month, and others say the 9th working day after month end.

Penalties also matter for employers. SHA says late SHIF remittance attracts a 2% penalty for each month the amount stays unpaid, under section 27(6) of the Social Health Insurance Act, 2023, with remittance due by the 9th of the following month. Late Housing Levy and PAYE payments carry separate penalties, so check the current rates on iTax.

For any change to pay, hours or roles, the country's notice, consultation and severance rules apply, and the change should be agreed with the employee or checked with a Kenyan employment lawyer. This explains the rule in general terms; it is not legal or tax advice for your case.

Many employers still rebuild these payroll lines by hand each month. An AI worker can read the month's pay data, run the NSSF tiers, SHIF, Housing Levy and PAYE bands for each employee, flag any row where a cap or an exception applies, and prepare the figures for filing. A payroll lead still reviews the flagged rows, approves the run and confirms the remittances on iTax and the SHA employer portal.