Key takeaways
- Current SHIF/SHA Contribution Formula
- How SHIF/SHA Fits Into the Payslip
- Worked Example for an Employee Earning KES 80,000
- What to Review Before Remittance
The Social Health Authority (SHA) administers Kenya's Social Health Insurance Fund (SHIF). For salaried employees, the employer deducts the employee's monthly contribution through payroll and remits it to the Authority by the statutory deadline. This replaced the old NHIF-style fixed contribution table, so employers should not use legacy NHIF bands when processing current payroll.
Current SHIF/SHA Contribution Formula
For salaried employment, the current SHIF contribution is calculated at 2.75% of gross monthly salary or wage, subject to a minimum monthly contribution of KES 300. There is no old NHIF-style upper bracket cap in this model. A payroll system should therefore calculate the contribution from the gross salary for the month, including regular taxable pay components used in the employment income base.
| Gross monthly salary (KES) | SHIF/SHA calculation | Monthly contribution (KES) |
|---|---|---|
| 10,000 | 2.75% of 10,000, but minimum applies | 300 |
| 30,000 | 30,000 x 2.75% | 825 |
| 50,000 | 50,000 x 2.75% | 1,375 |
| 80,000 | 80,000 x 2.75% | 2,200 |
| 150,000 | 150,000 x 2.75% | 4,125 |
| 300,000 | 300,000 x 2.75% | 8,250 |
How SHIF/SHA Fits Into the Payslip
SHIF/SHA should appear as a separate statutory deduction on the employee's payslip. It should not be hidden under a generic deductions line because employees often need to confirm the exact amount deducted from their salary. The payroll summary should also show the total SHIF/SHA liability for the month so the finance team can compare it with the schedule submitted through the portal.
Worked Example for an Employee Earning KES 80,000
If an employee earns KES 80,000 gross salary, the SHIF/SHA contribution is KES 80,000 multiplied by 2.75%, which equals KES 2,200. That amount is deducted from the employee's salary. The payslip should still show other statutory deductions separately, including PAYE, employee NSSF, and the employee Affordable Housing Levy. The employer should then reconcile the KES 2,200 against the SHIF/SHA remittance schedule for that employee.
What to Review Before Remittance
Before remitting, review employees who joined or left during the month, employees on unpaid leave, and employees with variable pay. If your payroll uses imported salary data, check that the gross salary used for SHIF/SHA matches the final approved payroll and not an earlier draft. A mismatch between the payslip and the portal schedule can create employee complaints and reconciliation work later.
Employer vs Employee Responsibilities
Unlike NSSF and the Affordable Housing Levy, SHIF/SHA payroll deduction is normally an employee contribution. The employer's responsibility is to calculate the correct amount, deduct it from payroll, remit it on time, and keep evidence that the contribution was filed and paid. If an employer voluntarily covers the contribution as a staff benefit, the payroll and tax treatment should be reviewed carefully with the company's accountant.
Penalties for Late or Non-Remittance
Late or incorrect SHIF/SHA remittance can create arrears for employees and compliance exposure for the employer. In practice, the highest-risk issues are not only late payment; they include using old NHIF tables, omitting newly hired employees, using net salary instead of gross salary, and failing to reconcile the payroll schedule against the actual payment made.
The Social Health Authority (SHA) manages the Social Health Insurance Fund (SHIF), which provides mandatory health insurance coverage in Kenya. Employers should monitor updates from SHA for changes to contribution rates and remittance procedures.
How to Register and Remit SHA Online
- 1Register as an employer on the SHA Self-Service Portal at sha.go.ke.
- 2Add all employees with their national ID numbers and salary details.
- 3Generate or upload the monthly contribution schedule using the correct gross salary for each employee.
- 4Pay via M-Pesa, bank transfer, or the SHA portal.
- 5Download and retain the payment receipt as proof of remittance.
Payroll Checklist for SHIF/SHA
- Use the current percentage formula instead of legacy NHIF fixed bands.
- Base the calculation on gross salary or wage for the month, not net pay after other deductions.
- Apply the minimum contribution where the percentage amount falls below KES 300.
- Reconcile the payroll SHIF/SHA total with the schedule submitted through the portal.
- Keep proof of filing and payment together with the monthly payroll pack.
- Review the setup after salary changes, unpaid leave, new hires, and terminations.
