The Kenyan payroll landscape has evolved significantly. Nawiri's payroll engine is hardcoded with the latest 2026 statutory limits to ensure 100% compliance. Here is the mathematical breakdown of how your employees' payslips are generated.

1. Social Health Insurance Fund (SHIF)

SHIF is calculated as a flat 2.75% of Gross Pay (Basic Salary + All Cash Allowances). There is no upper limit.
Tax Benefit: SHIF contributions qualify for a 15% Insurance Relief, which Nawiri automatically applies to reduce the employee's final PAYE burden.

2. Affordable Housing Levy (AHL)

The AHL is calculated as 1.5% of Gross Pay. The employer is also legally required to match this 1.5% contribution. Both the employee deduction and employer contribution are tracked in Nawiri's downloadable AHL Statutory Report.

3. NSSF (Pension) - 2026 Limits

NSSF is calculated at 6% of Pensionable Pay (Basic Salary), split across two tiers:

• Tier I: 6% on the first KES 9,000 (Max KES 540).
• Tier II: 6% on the balance up to KES 108,000 (Max KES 5,940).

The absolute maximum NSSF deduction an employee will see on their payslip in 2026 is KES 6,480. Note: NSSF contributions are deducted from Gross Pay before calculating taxable income.

4. Pay As You Earn (PAYE)

PAYE is calculated on Taxable Income (Gross Pay + Non-Cash Benefits - NSSF). Nawiri applies the progressive KRA tax bands (ranging from 10% to 35%) and automatically deducts the standard KES 2,400 Personal Relief to arrive at the final Net PAYE.