Four things come off a Kenyan salary before it reaches you: pension, health insurance, the housing levy and income tax. This is how each is worked out, with the rates in force in 2026.
The four deductions
| Deduction | Rate | Notes |
|---|---|---|
| NSSF | 6% | On pay up to KES 108,000; your employer pays the same again |
| SHIF | 2.75% | Of gross pay, minimum KES 300 |
| Housing Levy | 1.5% | Of gross pay; your employer pays the same again |
| PAYE | 10% to 35% | On what is left, in bands, less personal relief |
NSSF, SHIF and the Housing Levy all come off before PAYE is worked out, so they lower your tax.
PAYE bands
Monthly, for residents:
| Monthly taxable pay (KES) | Rate |
|---|---|
| 0 to 24,000 | 10% |
| 24,001 to 32,333 | 25% |
| 32,334 to 500,000 | 30% |
| 500,001 to 800,000 | 32.5% |
| 800,001 and above | 35% |
Every resident then gets personal relief of KES 2,400 a month, taken off the tax. If your tax comes to less than that, you pay no PAYE.
A worked example
Someone earning KES 100,000 a month gross:
| Step | KES |
|---|---|
| Gross pay | 100,000.00 |
| NSSF: 6% of 100,000 | 6,000.00 |
| SHIF: 2.75% of 100,000 | 2,750.00 |
| Housing Levy: 1.5% of 100,000 | 1,500.00 |
| Taxable pay | 89,750.00 |
| 10% on the first 24,000 | 2,400.00 |
| 25% on the next 8,333 | 2,083.25 |
| 30% on the remaining 57,417 | 17,225.10 |
| Tax before relief | 21,708.35 |
| Less personal relief | 2,400.00 |
| PAYE | 19,308.35 |
| Take-home pay | 70,441.65 |
Try your own figures in the salary calculator. Payroll software rounds slightly differently, so expect your payslip to be within a few shillings of this, not identical.
NSSF in more detail
The NSSF rate is 6% from you and 6% from your employer, in two tiers:
- Tier I on pay up to KES 9,000.
- Tier II on pay from there up to KES 108,000.
So the most you pay is KES 6,480 a month. These limits rose on 1 February 2026 and are scheduled to keep rising, so an older payslip will show smaller NSSF figures.
SHIF
SHIF replaced NHIF in October 2024. It is 2.75% of gross pay, with no upper cap, which is why it matters more than NHIF did at higher salaries. See Healthcare in Nairobi for what it covers.
Filing your return
Everyone with a KRA PIN must file a return on iTax by 30 June for the previous calendar year, even if PAYE has already paid all the tax.
- Ask your employer for your P9 form, which shows your pay and the tax deducted for the year.
- On iTax, choose the income tax return for residents, enter the P9 figures, and add any other income such as rent or freelance work.
- If you had no income at all, file a nil return.
A late return carries a penalty even when no tax is owed.
Things that reduce your tax
- Insurance relief on life, education and health insurance premiums you pay yourself.
- Contributions to a registered pension scheme, up to a limit.
- Mortgage interest on your own home, up to a limit.
The limits change with Finance Acts, so check KRA’s current figures before relying on them.
Other taxes you will meet
- VAT at 16% on most goods and services, already in the shelf price.
- Excise duty on mobile money and bank transfer fees, airtime and data, already in what you pay.
- Rental income tax if you let out property.
Non-residents
You count as tax resident if you have a permanent home in Kenya, or spend 183 days or more here in a year. Non-residents are taxed only on Kenyan income and get no personal relief.