Kenya

National Social Security Fund (NSSF) contributions

The NSSF Act 2013 outlines annual contributions payable in the first four years of its implementation beginning 1 February 2023. Effective 1 February 2025, employers are required to deduct a maximum of KES 4,320 from the employees and match the same. The contributions are payable on or before the ninth day of the following month.

Social Health Insurance Fund (SHIF) contributions

Social Health Insurance Act, 2024 repealed the National Insurance Fund (NHIF). The Social Health Insurance Act mandates universal registration and contributions from all Kenyan residents, with specific provisions for indigent and vulnerable populations. It also outlines the benefits, tariffs, empanelment, contracting, and claims management processes.

Employees are required to contribute 2.75% of their gross monthly salary to the Social Health Insurance Fund (SHIF), with employers responsible for deducting and remitting these contributions to the Social Health Authority by the 9th of the following month. Failure to remit Social Health Insurance Fund (SHIF) contributions on time attracts a penalty of 2% of the unpaid amount for each month it remains unpaid.

The Tax Laws (Amendment) Act, 2024 now allows SHIF contributions as deductible expenses for tax purposes.

Affordable Housing Levy (AHL)

AHL was introduced to support the government's affordable housing initiatives. Effective March 2024, both employers and employees are required to contribute 1.5% of the employee's gross monthly salary. The due date for AHL payments is the 9th working day after the end of the payroll month.

The filing and payment of AHL is done through the iTax system. Employers should declare AHL in the monthly PAYE return (Form P10) under the sheet M (Affordable Housing Levy details). Failure to remit AHL by the due date attracts a penalty of 3% per month on the outstanding amount.

Furthermore, section 15(2) of the ITA was amended by the TLAA, 2024 so that contributions made by employees to AHL qualify as allowable deductions for PAYE purposes, thereby enabling employees to offset their taxable income by the amounts contributed.

Consumption taxes

Value-added tax (VAT)

VAT is levied at a standard rate of 16% on the supply of taxable goods and services in Kenya, as well as on the importation of taxable goods and services into Kenya. See the Other taxes section in the Corporate tax summary for reduced rates and additional information.