Kenyan Statutory Rates Reference (2026)¶
This document outlines the statutory deduction schedules and formulas applied by the JengaStack Payroll engine.
1. PAYE (Pay As You Earn) Brackets¶
Income tax is calculated using graduated marginal tax brackets:
| Monthly Taxable Pay (Ksh) | Annual Equivalent (Ksh) | Tax Rate |
|---|---|---|
| First 24,000.00 | First 288,000.00 | 10.0% |
| Next 8,333.00 (24,001 to 32,333) | Next 100,000.00 | 25.0% |
| Next 467,667.00 (32,334 to 500,000) | Next 5,612,000.00 | 30.0% |
| Next 300,000.00 (500,001 to 800,000) | Next 3,600,000.00 | 32.5% |
| Excess above 800,000.00 | Excess above 9,600,000.00 | 35.0% |
Tax Reliefs¶
- Personal Relief: Ksh 2,400.00 per month (Ksh 28,800.00 annually) for all resident individuals.
- Insurance Relief: 15% of SHIF and qualifying life/health insurance contributions up to a maximum relief cap of Ksh 5,000.00 monthly.
- Affordable Housing Relief: 15% of employee Affordable Housing Levy contributions up to a maximum relief cap of Ksh 9,000.00 monthly.
- Disability Exemption: The first Ksh 150,000.00 of monthly income is tax-exempt for registered persons with disabilities holding valid KRA exemption certificates.
2. SHIF (Social Health Insurance Fund)¶
The transition from NHIF to SHIF uses a flat percentage rather than fixed salary bands:
- Employee Contribution: 2.75% of Gross Pay.
- Minimum Contribution Floor: Ksh 300.00 per month.
- Statutory Relief: 15% of the SHIF contribution is offset directly against gross PAYE liability.
3. Affordable Housing Levy (AHL)¶
Under the Affordable Housing Act:
- Employee Contribution: 1.5% of Gross Pay.
- Employer Matching Contribution: 1.5% of Gross Pay.
- Statutory Relief: 15% of the employee contribution is offset directly against gross PAYE liability.
4. NSSF (National Social Security Fund)¶
NSSF contributions apply two earning tiers:
- Tier I: 6% of earnings up to Lower Earnings Limit (LEL), matched by employer.
- Tier II: 6% of earnings between LEL and Upper Earnings Limit (UEL), matched by employer.
- Tax Deductibility: Employee NSSF contributions up to Ksh 20,000.00 per month are deductible from gross income before calculating taxable pay.
5. NITA (National Industrial Training Authority)¶
- Employer Levy: Mandatory Ksh 50.00 per month per employee under Cap 237.
- Employee Contribution: None (paid entirely by employer).