What changed and what stayed the same
The headline change is the contribution structure. NHIF used a graduated table where the deduction depended on the employee salary band, from a low fixed amount up to a capped maximum. SHIF replaced that with a flat 2.75% of gross monthly pay, with a minimum of KES 300 for low earners and no upper cap in the same banded sense. Higher earners now contribute more than under the old NHIF ceiling.
What stayed the same is the rhythm. It is still an employee deduction the employer withholds and remits, it is still separate from PAYE, NSSF and the Housing Levy, and it is still due by the 9th of the following month. The obligation to deduct correctly and remit on time did not change, only the amount and the body it goes to.
For employers the practical task is a payroll update: switch from the NHIF band lookup to the SHIF percentage, apply the minimum, and remit to SHA. Payrolls that were never updated are the main source of errors, either still using NHIF bands or applying the percentage to the wrong base.
What employers should update for SHA
Work through these once to move payroll fully onto SHA.
- 1
Step 1: Remove the old NHIF bands
Take the graduated NHIF table out of your payroll. It no longer applies and will produce wrong deductions.
- 2
Step 2: Apply 2.75% of gross
Set the health deduction to 2.75% of gross monthly pay for every employee, with a KES 300 minimum for low earners.
- 3
Step 3: Label the payslip line as SHIF
Update payslip labels so the deduction reads SHIF, not NHIF, and shows as a separate line from PAYE, NSSF and the Housing Levy.
- 4
Step 4: Confirm the remittance goes to SHA
Make sure the payment and by-employee return go to SHA, not to the old NHIF process, by the 9th of the following month.
- 5
Step 5: Communicate to staff
Higher earners will see a larger deduction than under NHIF. A short explanation avoids payroll queries and confusion.
- 6
Step 6: Keep records
Keep payslips and SHA remittance confirmations so you can answer employee questions and any audit cleanly.
Common SHA transition mistakes
Leaving NHIF bands in the payroll
The single most common error is never updating the payroll, so it still deducts on the old NHIF table instead of the flat 2.75%.
Applying 2.75% to the wrong base
SHIF is 2.75% of gross pay, not of taxable pay or basic pay only. Using the wrong base understates or overstates the deduction.
Not applying the minimum
For low earners, 2.75% can fall below KES 300. The minimum applies, so do not deduct less than KES 300.
Still calling it NHIF to staff
Payslips and communications should say SHIF. Calling it NHIF causes confusion, especially when the amount is different from before.
Sending SHIF to the wrong body
SHIF goes to SHA. Do not lump it with the KRA PAYE payment or leave it in an old NHIF payment channel.
An employer compares NHIF and SHIF for a mid earner
Under the old NHIF table, an employee on KES 50,000 fell into a band with a fixed deduction that was well under 2.75% of their pay.
Under SHIF, the same employee is deducted 2.75% of KES 50,000, which is KES 1,375. That is more than the old NHIF band, so the employee sees a larger health deduction on the payslip.
The employer explains the change once, updates the payslip label to SHIF, and remits to SHA by the 9th. For low earners the picture is different: someone on KES 8,000 pays the KES 300 minimum, close to what NHIF charged, so the change is felt most by higher earners.
An unmonitored till is the quietest leak in Kenyan retail: small shortfalls and unrecorded sales add up long before anyone thinks to look.
Veira gives each staff member their own login and a full audit trail, so every sale, void and refund is tied to a name.
How Veira keeps you on the current rules
Veira payroll is on the current SHIF basis: 2.75% of gross with the KES 300 minimum, labelled correctly and shown separately from PAYE, NSSF and the Housing Levy. You do not have to maintain old NHIF tables or remember when the rules changed.
When statutory rates change again, keeping payroll in a system that updates the rules for you is the difference between staying compliant and quietly deducting the wrong amount for months, from KES 2,999 a month.
Frequently asked questions
What is the difference between SHA and NHIF?
When did SHA replace NHIF?
Do employers pay more under SHA than NHIF?
What do employers need to change for SHA?
Is the SHIF deadline different from NHIF?
Is NHIF completely gone?
The SHA vs NHIF change is simple to state but easy to get wrong in payroll: a flat 2.75% of gross replaced the old bands, and higher earners feel it most. The fix is a one-time payroll update, kept current. Veira applies the right SHIF automatically alongside PAYE, NSSF and the Housing Levy, from KES 2,999 a month. Book a free demo.