The Social Health Insurance Fund, SHIF, replaced the National Hospital Insurance Fund from October 2024. It is the contribution that finances the Social Health Authority's cover. For employees it appears on the payslip as a deduction, and for self-employed people it is a monthly payment they make themselves.
The rate
SHIF is 2.75% of income. For employees the basis is gross monthly pay. A minimum contribution applies, so very low earners still pay a small fixed amount, and the SHIF calculator applies that minimum for you. Unlike the old NHIF, which used a table of fixed amounts, SHIF rises smoothly with income.
| Gross pay (KES) | SHIF at 2.75% |
|---|---|
| 30,000 | 825 |
| 60,000 | 1,650 |
| 100,000 | 2,750 |
| 200,000 | 5,500 |
Who pays
Employees have SHIF deducted by the employer, who pays it over to the authority. The employer does not add a matching share. Self-employed people and others with income outside employment register and pay on their own income. Dependants are covered under the contributor's membership.
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How it affects your tax
From 27 December 2024 SHIF contributions are deductible before PAYE is worked out. That means your taxable pay is lower by the amount you contribute, which gives a modest tax saving. Before that date the contribution counted for insurance relief instead, and the relief no longer applies to SHIF now that it is deductible. See how PAYE is calculated for the sequence of deductions and bands.
A quick example: on a gross salary of KES 100,000, SHIF is KES 2,750. Taxable pay falls by that amount, and at a marginal rate of 30% the tax saved is a little over KES 800. The PAYE calculator shows the effect line by line.
What employers should do
- Register the business with the Social Health Authority and keep staff details accurate.
- Deduct SHIF every month, and pay it over by the deadline. The statutory remittance tracker lists the due dates for SHIF, PAYE, NSSF and the Housing Levy in one place.
- Show the deduction on every payslip. The free payslip generator workbook includes a SHIF line that updates with the rate.
If you run payroll for several people, the monthly payroll workbook calculates SHIF for each employee together with PAYE, NSSF and the Housing Levy.
Common questions
Is SHIF the same as NHIF? No. NHIF was repealed and SHIF is its replacement, with a different rate and rules.
Can I claim it as insurance relief? Not since it became deductible; the deduction is how the tax benefit is given.
What if I have private medical insurance? Private premiums can still qualify for insurance relief of up to KES 5,000 a month. Try it in the tax reliefs calculator.
Read next
SHIF sits beside two other statutory deductions, covered in our guides to NSSF contributions and the Affordable Housing Levy.
Planning for the cost
For a household budget, SHIF is simply a percentage of pay that you will not see in your account, so plan with net pay. The gross-to-net salary table shows take-home pay for many salaries, and our guide to gross pay versus net pay explains how to negotiate with the deductions in mind. Employers can read how to run payroll for the full monthly routine.
Health-financing rules can be amended by regulations. Confirm the current rate and minimum with the Social Health Authority before relying on a figure.