Social Health Insurance Fund (SHIF)
SHIF replaced NHIF on 1 October 2024. The Social Health Insurance Fund (SHIF), run by the Social Health Authority (SHA), is the current health contribution for employees in Kenya. It replaced the National Hospital Insurance Fund (NHIF), which no longer applies to new payroll periods. See the NHIF page for the old rates.
Legal basis: Social Health Insurance Act, 2023, and its regulations. Tax treatment: Income Tax Act, section 15(2)(ae), introduced by the Tax Laws (Amendment) Act, 2024.
Contribution
- Rate: 2.75% of the employee’s gross monthly salary.
- Minimum: KES 300 per month.
- Cap: none. Unlike NHIF, which topped out at KES 1,700, SHIF rises with pay.
- Who pays: the employee. The employer deducts it from pay; the employer does not add a matching amount.
- Remit to: the Social Health Authority, by the 9th day of the month following the payroll month.
Example
Gross salary KES 100,000 × 2.75% = KES 2,750 SHIF. Gross salary KES 8,000 × 2.75% = KES 220, which is below the minimum, so KES 300 is deducted.
Effect on PAYE
Since the Tax Laws (Amendment) Act, 2024 took effect on 27 December 2024 (PAYE for December 2024 onwards), SHIF contributions are deducted from gross pay when working out taxable pay. There is no cap on this deduction. The earlier 15% “insurance relief” on NHIF premiums was repealed, so SHIF no longer appears as a relief.
Source: KRA public notice of 19 December 2024, “Amendments to PAYE Computation Pursuant to the Tax Laws (Amendment) Act, 2024”.
Nifty Payroll calculates SHIF automatically.