How your salary deductions work
Every month your employer takes four statutory deductions from your gross pay. Three of them are taken before PAYE is worked out, which lowers your tax.
The order of deductions
- NSSF: 6% of your pay up to KSh 108,000, so at most KSh 6,480 a month (Tier I up to KSh 540, Tier II up to KSh 5,940).
- SHIF: 2.75% of gross pay, with a minimum of KSh 300.
- Housing Levy: 1.5% of gross pay.
- PAYE: worked out on what's left (your taxable income), then reduced by personal relief of KSh 2,400.
PAYE bands (monthly)
| First KSh 24,000 | 10% |
| Next KSh 8,333 | 25% |
| Next KSh 467,667 (up to 500,000) | 30% |
| Next KSh 300,000 (up to 800,000) | 32.5% |
| Above KSh 800,000 | 35% |
Worked example: KSh 80,000 gross
| NSSF | KSh 4,800 |
| SHIF | KSh 2,200 |
| Housing Levy | KSh 1,200 |
| Taxable income | KSh 71,800 |
| Tax on bands | KSh 16,323 |
| PAYE after relief | KSh 13,923 |
| Net pay | KSh 57,877 |
Frequently asked questions
Did the Finance Act 2026 change PAYE? No. The bands, rates and personal relief are unchanged. Proposals for new bands from January 2027 were not passed.
Why is my payslip different? Pension contributions, mortgage interest, insurance relief or a disability exemption can lower your PAYE. Some employers also deduct loans, SACCO savings or union dues after tax.
What should I do with what's left? Even part of your salary saved each month adds up. Compare money market fund rates or see what a T-bill would earn after tax.