Managing statutory deductions is one of the most important responsibilities for employers in Kenya. Accurate calculation and timely remittance of PAYE, NSSF, and NHIF or its successor, the Social Health Insurance Fund (SHIF), help businesses remain compliant and avoid costly penalties.
Whether you manage a small business or a growing workforce, understanding these statutory obligations is essential.
PAYE (Pay As You Earn)
PAYE is income tax deducted from employees' salaries by employers and remitted to the Kenya Revenue Authority (KRA). Employers must calculate the correct tax based on the applicable tax bands and submit the deductions within the required timelines.
NSSF Contributions
The National Social Security Fund (NSSF) provides retirement benefits for employees. Employers are required to deduct employee contributions, make the employer contribution where applicable, and remit the amounts every month.
NHIF and SHIF
While NHIF has largely been replaced by the Social Health Insurance Fund (SHIF), employers must ensure they comply with the current statutory health insurance requirements by deducting and remitting the correct employee contributions.
Why Accurate Filing Matters
Incorrect or late statutory filings can result in:
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Financial penalties
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Interest charges
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Compliance issues
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Payroll disputes
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Delays in obtaining compliance certificates
Keeping accurate payroll records helps reduce errors and ensures employees receive correct payslips.
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