Kenya Payroll Guide 2026

How a monthly Kenya payroll calculation works

Payroll is easier to review when tax calculations and cash deductions are kept in the right order. The ScopePayroll estimate follows this sequence:

1. Establish gross taxable income. Start with gross cash pay and add taxable benefits.
2. Calculate allowable deductions. The model accounts for qualifying pension, post-retirement medical, mortgage-interest, SHIF and employee Housing Levy amounts, subject to the applicable limits in its rule release.
3. Calculate PAYE. Apply the graduated monthly bands to chargeable pay, then subtract eligible personal and insurance relief.
4. Total employee deductions. Combine PAYE with employee NSSF, SHIF, Housing Levy and any employee-specific cash deductions.
5. Calculate net pay. Subtract total employee deductions from gross cash pay.

Review principle: gross cash pay minus the published employee deductions should reconcile to the published net pay. Taxable benefits can affect PAYE without increasing the cash paid to the employee.

How is PAYE calculated in Kenya in 2026?

For a resident employee, PAYE starts with chargeable pay after allowable deductions. The monthly bands currently represented in the Contlant calculator are:

• the first KSh 24,000 at 10%;
• the next KSh 8,333 at 25%;
• the next KSh 467,667 at 30%;
• the next KSh 300,000 at 32.5%; and
• chargeable pay above KSh 800,000 at 35%.

These rates are marginal: each rate applies only to the portion of chargeable pay inside that band, not to the employee's entire income. The model applies KSh 2,400 monthly personal relief when the employee is resident and the employment is marked as primary. PAYE is not reduced below zero.

Where eligible details are entered, the calculator also models insurance relief at 15% of the qualifying premium, capped at KSh 5,000 per month.

Which statutory deductions are included?

NSSF Year 4 (2026)

The calculator applies the employee NSSF rate of 6% using monthly lower and upper earnings limits of KSh 9,000 and KSh 108,000. That produces a maximum employee contribution of KSh 6,480. The employer contribution is calculated separately at the matching amount.

SHIF

SHIF is modelled at 2.75% of gross cash pay, with a minimum contribution of KSh 300 when gross pay is positive. The contribution is administered by the Social Health Authority.

Affordable Housing Levy

The employee Housing Levy is modelled at 1.5% of gross cash pay and is deducted when calculating take-home pay. The employer's separate 1.5% contribution affects employer cost, not employee net pay.

Other employee-specific inputs

The estimate can account for additional pension, post-retirement medical fund contributions, qualifying mortgage interest, insurance premiums, taxable benefits and other authorized deductions. These inputs are not the same for every employee and should be supported by current records.

What should be checked before payroll is approved?

• Confirm gross cash pay, taxable benefits and the correct payroll period.
• Confirm residency and whether this is the employee's primary employment before applying relief.
• Retain support for pension, mortgage, medical and insurance amounts used in the calculation.
• Reconcile gross cash pay, each deduction and net pay rather than reviewing only the final figure.
• Check the active statutory rule release and official guidance before filing or remitting.

KRA states that PAYE should be filed and remitted on or before the ninth day of the following month. Confirm the current deadline and payment instructions on the relevant official portal before submission.

Need a controlled workflow beyond an estimate? Explore ScopePayroll, review ScopeTax or request a payroll consultation.

Frequently asked questions

How is PAYE calculated in Kenya in 2026?

Start with gross taxable income, subtract allowable deductions to establish chargeable pay, apply the monthly graduated bands, then subtract eligible tax reliefs. PAYE cannot fall below zero.

What deductions commonly appear on a Kenyan payslip?

Common statutory deductions are PAYE, the employee NSSF contribution, SHIF and the employee Affordable Housing Levy. Voluntary pension, medical and other authorized deductions depend on the employee and employer arrangements.

What NSSF contribution does the calculator use for 2026?

The calculator models the NSSF Year 4 schedule at 6%, with monthly lower and upper earnings limits of KSh 9,000 and KSh 108,000. This produces a maximum employee contribution of KSh 6,480, matched by the employer.

What SHIF contribution does the calculator use?

The calculator models SHIF at 2.75% of gross cash pay, subject to a KSh 300 minimum when gross pay is positive.

When is PAYE due in Kenya?

KRA states that employers should file and remit PAYE on or before the ninth day of the following month. Confirm the current deadline and payment instructions on the official portal before filing.

Is the ScopePayroll calculator an official government calculator?

No. ScopePayroll is an independent Contlant estimate, not a KRA, NSSF or SHA service. Employers remain responsible for checking employee circumstances, final payroll and remittances against current official guidance.

Primary sources and review method

Contlant uses official publications for the statutory context in this guide. The public calculator requests the current versioned ScopeSpace payroll rule release when that service is available and clearly identifies when a matching packaged fallback is used. The guide explains that model; it does not replace the source material.

• Kenya Revenue Authority: PAYE guidance and tax bands
• NSSF Kenya: Year 4 (2026) contribution notice
• Kenya Law: Social Health Insurance Regulations
• Social Health Authority employer portal

Last reviewed: 20 August 2026. A review date confirms when Contlant checked the page; it is not a guarantee that a rule has remained unchanged since then.