YolaworksSHIF explained: the 2.75% rate that replaced NHIF
SHIF — the Social Health Insurance Fund — replaced NHIF as Kenya's mandatory health contribution. If you run payroll, the change is simple to state but easy to get wrong: SHIF is a flat percentage of gross pay, not the old banded table. Here's exactly how it works in 2026.
What is SHIF?
SHIF is the contribution that funds the Social Health Insurance Fund under the Social Health Authority (SHA). Every employee contributes, and the money funds healthcare cover. It replaced the National Hospital Insurance Fund (NHIF), which used a stepped contribution table based on salary brackets.
How much is SHIF? 2.75% of gross
The SHIF deduction is 2.75% of an employee's gross monthly pay, subject to a minimum of KES 300. Unlike NHIF's fixed bands, SHIF rises smoothly with salary — there are no steps or ceilings, so a higher earner contributes proportionally more.
| Gross monthly pay (KES) | SHIF at 2.75% (KES) |
|---|---|
| 10,000 | 300 (minimum) |
| 30,000 | 825 |
| 50,000 | 1,375 |
| 85,000 | 2,338 |
| 150,000 | 4,125 |
| 300,000 | 8,250 |
SHIF vs NHIF: what changed
- Flat rate, not bands. NHIF used a table topping out at KES 1,700 for high earners. SHIF is an uncapped 2.75%, so above roughly KES 62,000 gross, employees now pay more than they did under NHIF.
- Minimum contribution. The lowest SHIF contribution is KES 300, keeping low earners in the system.
- Registration. Employees and dependants register with the SHA; employers deduct and remit on their behalf.
- Allowable against PAYE. Like NHIF before it, SHIF is deducted from gross pay before PAYE is calculated, so it reduces taxable pay.
Payroll tip: because SHIF is deducted before PAYE, changing the SHIF rate changes taxable pay and therefore PAYE too. Any calculator or payroll system must apply the deductions in the right order — see our PAYE guide for the full sequence.
When is SHIF due?
SHIF is deducted from each month's payroll and remitted to the SHA by the statutory deadline (the 9th of the following month, aligning with other payroll statutories). Late remittance attracts penalties, so it pays to run payroll and file on a fixed monthly cadence.
See SHIF on any salary
Our free calculator shows SHIF, PAYE, NSSF and the Housing Levy together.
Open the calculator →How Yolaworks handles SHIF
Yolaworks payroll applies SHIF at 2.75% with the KES 300 minimum automatically for every employee, feeds it into the PAYE calculation in the correct order, and produces a remittance-ready summary each cycle — alongside NSSF, the Housing Levy and PAYE. Try it free for 30 days, no payment needed.
Rates and rules under the Social Health Insurance Act can be updated by regulation. Figures here reflect the 2026 position at the time of writing; confirm current rates with the SHA before filing.