KRA. NSSF. SHA. Kenyan payroll, owned.
Kenyan payroll demands monthly PAYE remittance to KRA via iTax by the 9th of the following month, NSSF 2013 Act Tier I and Tier II contributions (6% each, capped at KSh 1,080 per side), SHA/SHIF 2.75% social health deduction (replaced NHIF under Social Health Insurance Act 2023), Affordable Housing Levy 1.5% employee and 1.5% employer, personal relief of KSh 2,400/month, NITA KSh 50/employee/month levy, and strict KRA employer liability for PAYE shortfalls. Most providers handle withholding. Mercans handles all agencies — on a single proprietary stack with no intermediaries.
native payroll
vs nearest peer
since inception
- PAYE top rate
- 30% above KSh 500,000/mo
- NSSF Tier I (ER)
- 6% up to KSh 6,000/mo
- NSSF Tier II (ER)
- 6% on KSh 6,001–18,000
- AHL (Employer)
- 1.5% of gross salary
- SHIF / SHA (Employee)
- 2.75% of gross salary
- Housing Levy (ER)
- 1.5% of gross salary
- PAYE Deadline
- 9th of following month
- NSSF UEL
- KSh 18,000 combined cap
- Annual Leave
- 21 days minimum
- Minimum Wage (2024)
- KSh 16,362/month (general)
Getting Kenya payroll “mostly right” is the most expensive mistake
KRA PAYE Under-Deduction — 9th Deadline & Employer Liability
KRA holds employers strictly liable for PAYE shortfalls under the Income Tax Act Cap. 470.
NSSF 2013 Act — Migration from Old KSh 200 Flat Rate
Following the Supreme Court’s confirmation of the NSSF Act 2013’s constitutionality, employers must now remit Tier I + Tier II contributions (maximum KSh 1,080 each side) instead of the old KSh 200/month flat rate under the 1965 Act.
SHA/SHIF — NHIF-to-SHA Transition Compliance
The replacement of NHIF by the Social Health Authority (SHA) from October 2023 created a transition compliance risk for employers.
Affordable Housing Levy — Employer & Employee 1.5% Each
The Affordable Housing Levy (AHL), introduced under the Finance Act 2023 and upheld by the Kenya Court of Appeal in 2024, requires both employer and employee to contribute 1.5% of gross monthly salary to the Affordable Housing Fund, remitted through KRA.
The three types of providers who struggle with Kenya
Route through local Kenyan payroll bureaus. KRA PAYE remitted via iTax by local partner. NSSF typically still on old KSh 200 flat rate in many bureau systems; SHA/SHIF migration may be incomplete. AHL implementation varies. Annual P9 form generated by local partner.
- ×Partner PAYE
- ×NSSF via bureau
- ×AHL manual
Sage Pastel Kenya, QuickBooks Kenya, PayEdge: solid KRA PAYE and iTax integration. NSSF 2013 Act migration patchy — some systems still default to KSh 200. SHA/SHIF 2.75% update varies by vendor release cycle. AHL integrated in most systems post-2024. Director remuneration and non-resident flat rate require manual configuration.
- ×KRA iTax integrated
- ×NSSF 2013 partial
- ×SHA/SHIF varies
Fully managed payroll with native KRA iTax PAYE filing, NSSF 2013 Act Tier I/II engine, SHA/SHIF 2.75% migration, AHL 1.5% each, NITA KSh 50 levy, non-resident 30% flat rate, personal relief application, annual P9A return, and director remuneration PAYE treatment — all in-platform.
- ×Native iTax PAYE
- ×NSSF 2013 Tier I/II
- ×SHA/SHIF migrated
The only provider that closes every gap
From monthly KRA PAYE via iTax to NSSF 2013 Act Tier I/II engine, SHA/SHIF 2.75% migration, AHL 1.5% each, NITA levy, personal relief, non-resident flat rate, P9A annual return, and director remuneration compliance — Mercans owns every layer of Kenyan payroll on a single contract.
G2N Nova™ — Native KRA & NSSF Engine
Mercans’ proprietary G2N Nova™ engine remits monthly PAYE via KRA iTax by the 9th deadline, calculates NSSF Tier I (6% on KSh 6,000 LEL) and Tier II (6% on KSh 6,001–18,000 UEL band) contributions, deducts SHA/SHIF 2.75%, remits AHL 1.5% each side, applies KSh 2,400 personal relief, and generates the annual P9A return — all on every pay run.
Kenya-based payroll specialists
Mercans operates a Kenya-resident payroll team with expertise in KRA iTax employer administration, NSSF 2013 Act Tier I/II calculation, SHA/SHIF registration and remittance migration, AHL enforcement tracking, director remuneration PAYE treatment, non-resident flat-rate withholding, DTA Article 15 analysis, and Employment Act 2007 labour compliance. Named account managers with direct KRA iTax credentials.
Data Protection Act 2019 compliance
Kenyan payroll data is governed by the Data Protection Act 2019, enforced by the Office of the Data Protection Commissioner (ODPC). Employee national ID (Huduma Namba), KRA PIN, NSSF and SHA membership numbers are sensitive personal data. Mercans holds BCR approval, ISO 27701, SOC 1 & 2, and ISO 27017/27018. Cross-border data transfer compliance for multi-country payroll included as standard. Zero security breaches since inception.
Where Mercans wins on every Kenya-specific capability
Each row is a Kenyan payroll capability. Each cell shows native coverage as a fill bar — full = native in-platform, half = partial / manual workaround, empty = gap.
Kenya Capability Coverage · 10 dimensions
9th deadline · progressive 10–35% · personal relief KSh 2,400
Not KSh 200 flat · LEL KSh 6k · UEL KSh 18k · max KSh 1,080
Oct 2023 transition · new SHA portal · re-registration
Finance Act 2023 · Court of Appeal upheld · KRA iTax
28 Feb deadline · KRA cross-match · P9 employee cert
183-day test · no personal relief · DTA Article 15
Fee + salary aggregation · marginal rate · management fees
Employer only · NITA Directorate · compliance certificate
21-day annual leave · 1.5×/2× OT · maternity 3 months
National ID · KRA PIN · NSSF/SHA numbers · ODPC
Every rate. Every cap. Every obligation.
Kenya’s 2025–26 payroll framework combines PAYE 10–35% progressive rates via KRA iTax (9th deadline), NSSF 2013 Act Tier I/II (max KSh 1,080 each side), SHA/SHIF 2.75% (replaced NHIF), Affordable Housing Levy 1.5% each, NITA KSh 50/month, KSh 2,400 personal relief, non-resident 30% flat rate, and annual P9A return by 28 February. Mercans tracks every KRA, NSSF, and SHA update without manual reconfiguration.
Kenya · Rate & Compliance Dashboard
Live 2025–26PAYE Progressive Brackets — Monthly Chargeable Income
Kenya’s PAYE is computed on monthly chargeable income = gross monthly pay minus NSSF employee contribution. Progressive bands (2024 Finance Act): 10% (KSh 0–24,000), 25% (KSh 24,001–32,333), 30% (KSh 32,334–500,000), 32.5% (KSh 500,001–800,000), 35% (above KSh 800,000). Personal relief of KSh 2,400/month deducted from computed tax.
→ PAYE: 10–35% on monthly chargeable (gross minus NSSF EE) · KSh 2,400/mo personal relief · Finance Act annual updateNSSF 2013 Act — Tier Structure & Enforcement
The NSSF Act 2013 replaces the KSh 200 flat contribution of the 1965 Act. Tier I: 6% of the Lower Earnings Limit (LEL = KSh 6,000/month) = KSh 360 EE + KSh 360 ER.
→ NSSF 2013: Tier I KSh 360 each (on LEL) + Tier II up to KSh 720 each (on UEL band) · max KSh 1,080 per sideSHA/SHIF — NHIF Transition & 2.75% Rate
The Social Health Authority (SHA) replaced NHIF in October 2023 under the Social Health Insurance Act 2023. The old NHIF tiered schedule (KSh 500–1,700/month) was replaced by a uniform 2.75% of gross monthly salary with no cap.
→ SHA/SHIF: 2.75% (not old NHIF KSh 500–1,700 tiers) · separate registration · new SHA portal · NHIF portal closedKRA Audit — iTax Employer Compliance Framework
KRA’s iTax performs automated employer compliance checks comparing monthly PAYE remittances against the annual P9A return and individual employee filings. Non-compliance triggers include: PAYE remitted with no matching NSSF/SHA contributions; unexplained month-on-month PAYE variance; benefits-in-kind excluded from taxable income; director fees paid without PAYE; and foreign nationals with Kenya-source income but no PAYE records.
→ KRA iTax e-Audit: P9A vs monthly PAYE · 5%/mo penalty (max 25%) · 1%/mo interest · 30-day demand noticeSee your real Kenya payroll cost in real time
NSSF, SHA/SHIF, AHL employer and employee contributions plus KRA PAYE income tax — calculated live as you move the slider.
Kenya Payroll Cost Calculator
LIVEWhat only Kenya experts know to handle
These are the compliance details that don’t appear in standard payroll setup guides — but appear in every audit and labour inspection we’ve encountered in Kenya over 20 years.
KRA PAYE & Annual P9A Return
Monthly PAYE withheld on employment income including bonuses, director fees, and taxable benefits-in-kind. Progressive rates 10–35% on chargeable income (gross minus NSSF EE). Personal relief KSh 2,400/month for residents. Non-resident flat rate 30%. iTax remittance by the 9th monthly. Annual P9A employer return filed by 28 February; P9 certificate issued to each employee.
NSSF 2013 Act — Tier I & Tier II Engine
NSSF Act 2013 contributions: Tier I = 6% EE + 6% ER on LEL KSh 6,000 (KSh 360 each side); Tier II = 6% EE + 6% ER on UEL band KSh 6,001–18,000 (up to KSh 720 each). Combined maximum KSh 1,080 EE + KSh 1,080 ER for earnings at or above UEL.
SHA/SHIF & Health Insurance
SHA replaced NHIF in October 2023 under the Social Health Insurance Act 2023. SHIF rate: 2.75% of gross monthly salary deducted from the employee and remitted to SHA portal by the 9th. No cap. Employers and employees must re-register separately with SHA; NHIF registrations do not auto-transfer.
Affordable Housing Levy & NITA
AHL: 1.5% EE + 1.5% ER of gross monthly salary remitted to KRA via iTax alongside PAYE. No salary cap. Introduced by Finance Act 2023 and upheld as constitutional by Kenya Court of Appeal in 2024. NITA levy: KSh 50/month per employee (employer only) remitted to NITA Directorate. NITA compliance certificate required for statutory confirmation.
One workforce. Two entirely different compliance tracks.
Kenyan payroll divides into two primary tracks: resident employees subject to progressive PAYE, NSSF 2013 Act Tier I/II, SHA/SHIF, AHL, and personal relief; and non-resident employees on flat 30% PAYE, no personal relief, and separate work permit obligations. Directors require separate PAYE treatment on the aggregated total of salary plus fees.
Parallel Compliance Engines
(Citizens & Ordinarily Resident)
PAYE progressive 10–35% on monthly chargeable income (gross minus NSSF EE). Personal relief KSh 2,400/month deducted. iTax remittance by 9th. Annual P9A by 28 February. P9 certificate to employee.
NSSF Tier I + Tier II (2013 Act) 6% EE + 6% ER on LEL KSh 6,000 (KSh 360 each) + 6% each on UEL band KSh 6,001–18,000 (up to KSh 720 each). Combined max KSh 1,080 each. Monthly NSSF portal submission.
SHA/SHIF: 2.75% EE of gross monthly salary deducted and remitted to SHA portal by 9th. No cap. SHA employer + employee re-registration required (separate from NHIF). PHC and ECCIF fund coordination.
AHL: 1.5% EE + 1.5% ER of gross monthly salary. No cap. Remitted via KRA iTax alongside PAYE. Court of Appeal confirmed constitutional in 2024.
NITA: KSh 50/employee/month (ER only) flat levy to NITA Directorate. Employment Act 2007: minimum 21 days annual leave, overtime 1.5×/2× rate, 3-month maternity leave (full pay), 2-week paternity leave.
(Work Permit Holders)
PAYE flat 30% on Kenya-source employment income. No personal relief, no progressive brackets. Residency test: 183+ days in Kenya in a year = ordinarily resident (switches to progressive rates from the relevant year). Day-count tracker managed per employee.
DTA Article 15 relief Kenya has DTAs with UK, Germany, India, UAE, Qatar, South Africa, Zambia, Canada, Denmark, Norway, Sweden, Iran. Relief requires KRA prior approval; must not be self-applied. Secondment structure documentation maintained for DTA eligibility.
NSSF and SHA: applicable non-resident employees are generally subject to NSSF and SHA/SHIF on Kenya-source remuneration unless a bilateral social security agreement exempts them. Work permit class (G/I) recorded. NSSF and SHA registration managed at hire.
AHL: applicable Affordable Housing Levy applies to non-resident employees earning Kenya-source income. 1.5% EE deducted and 1.5% ER contributed via KRA iTax.
Departure: tax clearance employer must notify KRA of non-resident employee departure. Final salary may be withheld pending KRA tax clearance certificate for employees with potential arrears. P9 certificate issued for home country tax filing.
Kenya payroll compliance calendar
Key KRA, NSSF, SHA, and Employment Act deadlines for 2025–26.
each month
KRA PAYE, AHL & NSSF Monthly Remittance
Monthly PAYE, Affordable Housing Levy (AHL), and NSSF contributions are all due by the 9th of the following month. PAYE and AHL are remitted via KRA iTax; NSSF via the NSSF member portal; SHA/SHIF via the SHA portal (also by the 9th).
2026
Annual P9A Employer PAYE Return
Annual P9A (employer annual PAYE return) filed with KRA by 28 February 2026 for tax year 2025. Discloses aggregate gross remuneration, NSSF contributions, AHL deductions, taxable benefits-in-kind, personal relief applied, and net PAYE withheld per employee.
2026
Individual Income Tax Return — IT1/IT2
Kenyan residents with employment income only (single employer) are not required to file individual returns if PAYE was correctly withheld.
Jul–Aug
Finance Act — PAYE Bracket & Levy Updates
Kenya's annual Finance Act (typically signed by the President in June, effective from July 1) may revise PAYE brackets, personal relief amounts, AHL rates, and other payroll levies. Employers must update payroll systems immediately to apply new rates from the effective date.
Kenya is one market.
Mercans covers all of Africa on one platform.
From Kenya to Nigeria, South Africa, Egypt, Ghana, and Tanzania — Mercans delivers native payroll across every major African jurisdiction on a single contract, with consolidated multi-country reporting and a single point of contact.
covered
1 contract
consolidation
Africa
Every filing. Every format. Submission-ready.
Mercans generates the exact file types that KRA iTax, NSSF, SHA/SHIF, NHIF, Labour expect to receive.
