Understanding statutory deductions is critical for both employers and employees to avoid surprises and ensure compliance.
Key Deductions in 2026
- NSSF: Tiered contribution with a maximum employee deduction of KSh 6,480.
- SHIF (Social Health Insurance Fund): 2.75% of gross salary (minimum KSh 300).
- Affordable Housing Levy: 1.5% of gross salary.
- PAYE: Progressive tax rates with personal relief of KSh 2,400 per month.
Important Changes and Tips
- Mortgage interest relief of up to KSh 30,000 per month remains available for residents.
- Non-resident employees face a flat 30% PAYE rate with no personal relief.
- Timely remittance of all deductions is mandatory to avoid heavy penalties from KRA.
For Employers
Automating payroll and partnering with professional HR outsourcing firms helps reduce compliance risks and administrative burden.
For Employees
Using a reliable take-home pay calculator can help you better understand your net salary and plan your finances effectively.
Final Thought
Staying compliant is not just a legal requirement, it builds trust with your employees and protects your business.
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