Question 1

How is PAYE calculated in Kenya?

Accepted Answer

PAYE in Kenya is calculated using a graduated tax band system. Start with your gross pay (basic salary + allowances + non-cash benefits), then subtract allowable deductions like NSSF and registered pension contributions to get your taxable pay. Apply the monthly tax bands, subtract reliefs (personal relief of KES 2,400/month and insurance relief of 15% of premiums), and the result is your PAYE payable to KRA.

Question 2

What is the PAYE rate in Kenya for 2025/2026?

Accepted Answer

The PAYE tax bands for 2025/2026 under the Finance Act 2023 are: 10% on the first KES 24,000 per month, 25% on the next KES 8,333, 30% on the next KES 467,667, 32.5% on the next KES 300,000, and 35% on any amount above KES 800,000 per month.

Question 3

What is the SHIF deduction in Kenya?

Accepted Answer

NHIF has been replaced by the Social Health Insurance Fund (SHIF). SHIF deductions are a statutory requirement for all employees in Kenya. Use the calculator above for your exact monthly SHIF contribution based on your gross salary.

Question 4

What is the NSSF deduction in Kenya?

Accepted Answer

Under the NSSF Act, contributions are calculated in two tiers. Tier I covers the first KES 6,000 of salary at 6% (KES 360). Tier II covers the amount between KES 6,001 and KES 18,000 at 6% (up to KES 720). Total monthly NSSF is up to KES 1,080 for most employees.

Question 5

What is the Housing Levy deduction in Kenya?

Accepted Answer

The Affordable Housing Levy is 1.5% of your gross monthly pay. It is a statutory deduction introduced to fund affordable housing initiatives in Kenya and applies to all employees.

Question 6

What is the difference between gross and net salary in Kenya?

Accepted Answer

Gross salary is your total salary before deductions. Net salary (take-home pay) is what remains after PAYE income tax, SHIF, NSSF, and Housing Levy deductions. Use the PAYE calculator above to find your exact net salary.

Monthly taxable income	Rate
Up to KES 24,000 / month	10%
KES 24,001 – 32,333 / month	25%
KES 32,334 – 500,000 / month	30%
KES 500,001 – 800,000 / month	32.5%
Over KES 800,000 / month	35%

PAYE Calculator Kenya