In October 2024 the Social Health Insurance Fund (SHIF) replaced the National Hospital Insurance Fund (NHIF) as Kenya's main health insurance contribution. The change is bigger than a rename: the way the contribution is calculated, who pays and how it affects tax all changed.
From a table to a percentage
The NHIF used a table of fixed amounts. A person earning KES 20,000 paid KES 750 and a person earning KES 100,000 or more paid KES 1,700, the top of the table. SHIF replaces the table with a percentage of income: 2.75% of gross household income, with a minimum contribution. The SHIF calculator applies it for you.
| Gross pay | Old NHIF (approx.) | SHIF at 2.75% |
|---|---|---|
| KES 30,000 | KES 850 | KES 825 |
| KES 100,000 | KES 1,700 | KES 2,750 |
| KES 200,000 | KES 1,700 | KES 5,500 |
Lower earners pay about the same, and higher earners pay considerably more.
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Who pays
- Employees have SHIF deducted from pay by the employer, who pays it over. There is no matching employer share.
- Self-employed people and others with income outside employment register and pay on their own income.
- Dependants are covered under the contributor.
Tax treatment
Since 27 December 2024, SHIF contributions are deductible before PAYE is calculated, so they lower your taxable pay. Before that date they counted for insurance relief, and the relief no longer applies now that the contribution is a deduction. We explain the change in housing levy and SHIF now deductible before PAYE. See how to claim insurance relief for private premiums, which still qualify.
What employers should do
- Register the business with the Social Health Authority and keep staff details accurate.
- Deduct 2.75% from gross pay and apply the minimum where it is higher.
- Pay the deductions by the due date and show them on the payslip. The statutory remittance tracker lists due dates, and the payslip generator workbook has a SHIF line.
- Update your payroll rates. The monthly payroll workbook has SHIF on its Rates sheet.
What employees should check
Your payslip should show SHIF at 2.75% of gross pay and no NHIF line. Compare it with the PAYE calculator, and read how to spot mistakes on your payslip if the figure looks wrong. See SHIF contributions explained for the details.
What has not changed
Employees still pay NSSF and the Housing Levy; see NSSF contributions explained and the Affordable Housing Levy explained.
Where benefits are concerned
SHIF is a health financing scheme with its own benefit rules, which the Social Health Authority publishes. This article covers the contribution and tax effects only.
Questions people ask
Do I still need an NHIF card? No. NHIF contributions ended with the change, and SHIF is the scheme to use. Check the Social Health Authority for registration and benefit details.
Why did my contribution go up? SHIF is a percentage of income, so higher earners pay more than the old fixed maximum.
Is the contribution deductible? Yes, from 27 December 2024; see housing levy and SHIF now deductible before PAYE.
Where can I check my payslip? Compare it with the SHIF calculator and the guide to reading your payslip line by line.
Rates and rules for SHIF are set by law and regulations. Confirm them with the Social Health Authority.
Common questions
Is SHIF deducted before or after PAYE? Since December 2024 the SHIF contribution is deducted before PAYE is worked out, so it lowers your taxable pay. The same applies to the Affordable Housing Levy, so check that your payslip shows both before the PAYE calculation.
Do the self-employed and the unemployed contribute? Yes. SHIF applies to residents with income, and those outside formal employment contribute through the Social Health Authority at the rate and minimum the regulations set, rather than through an employer.
What if the contribution on my payslip looks wrong? Compare it with your gross pay using the SHIF calculator. If it differs, ask payroll to explain the base and the rate used, and ask for a correction in the next payroll if an error is found.