Complete guide on New SHIF rates for your Kenyan Payroll. With the introduction of new Social Health Insurance Fund (SHIF) rates, both employers and employees in Kenya need to stay updated on how these changes will affect their payroll.
The SHIF, under the State Health Authority (SHA), is now a crucial part of the country’s healthcare system, offering comprehensive services through a contribution-based model. The new rates ensure fair contributions based on income, making quality healthcare accessible to all.
This article explores the updated SHIF rates, what they mean for Kenyan payrolls, and how both employers and employees can prepare for the changes.
New SHIF rates for your Kenyan Payroll
Under Kenya’s new Social Health Insurance Fund (SHIF) program, contributions are calculated as 2.75% of your income. For salaried employees, this amount is deducted directly from their wages by their employer.
For those not in formal employment, the contribution is 2.75% of their annual income, with a minimum payment of Ksh 300 per year.
The funds collected will be used to provide comprehensive healthcare services, ensuring that all residents have access to quality health services without financial hardship. This initiative is designed to promote equitable healthcare across the country, addressing both preventive and curative needs, thus fostering a healthier population.
The SHA program represents a significant step towards achieving universal health coverage in Kenya.
| Employee’s Monthly Gross Income (Ksh) | SHIF Contribution (Ksh) |
| 12,000 – 14,999 | 330 – 413 |
| 15,000 – 19,999 | 413 – 550 |
| 20,000 – 24,999 | 550 – 688 |
| 25,000 – 29,999 | 688 – 825 |
| 30,000 – 34,999 | 825 – 963 |
| 35,000 – 39,999 | 963 – 1,100 |
| 40,000 – 44,999 | 1,100 – 1,238 |
| 45,000 – 49,999 | 1,238 – 1,375 |
| 50,000 – 59,999 | 1,375 – 1,650 |
| 60,000 – 69,999 | 1,650 – 1,925 |
| 70,000 – 79,999 | 1,925 – 2,200 |
| 80,000 – 89,999 | 2,200 – 2,475 |
| 90,000 – 99,999 | 2,475 – 2,750 |
| 100,000 – 150,000 | 2,750 – 4,125 |
What Employers and Employees Need to Do About SHIF
With the launch of the Social Health Authority (SHA), both employers and employees must take proactive steps to ensure compliance with the updated regulations under the Primary Health Care Act and Digital Health Act.
The introduction of the Social Health Insurance Fund (SHIF) has fundamentally changed how healthcare contributions are managed, making adherence to the new requirements crucial for maintaining uninterrupted healthcare services.
1. Register Employers and Employees on the SHA Portal
Employers are required to register both their organizations and their employees on the SHA Employer Portal by 1st October 2024.
Although the deadline is flexible, it’s recommended to complete the registration process before processing the October payroll to avoid any disruption in healthcare access or legal compliance.
Early registration ensures smooth payroll operations and guarantees employees will not experience any gaps in healthcare services. # What Employers and Employees Need to Do About SHIF
Steps to Register:
- Visit the SHA Employer Portal and create an account for your business.
- Follow the on-screen instructions to verify your account.
- Once registered, input your employees’ details to enroll them in the SHA system.
- The portal also allows employers to manage SHIF contributions, generate compliance reports, and update employee records as necessary.
- Remit SHIF contributions on time to ensure your employees’ health coverage remains active.
2. Deduct 2.75% SHIF Contributions from Employees’ October Salary
Starting with the October 2024 payroll, employers must implement the new 2.75% SHIF contribution, deducted from each employee’s gross salary.
This replaces the former NHIF contributions and ensures employees remain covered under the SHA’s comprehensive healthcare package. Payroll systems need to be updated to reflect this new contribution rate accurately.
Employers using automated payroll software, like Workpay, will benefit from seamless integration of the SHIF updates, ensuring error-free calculations and timely remittance of SHIF contributions. # What Employers and Employees Need to Do About SHIF
Additional Considerations:
- Employers should communicate these changes clearly to their employees to ensure they understand the new deductions and the benefits of SHIF.
- Regularly check for updates from SHA to stay informed about any further changes in regulations or contribution rates.
- Consider offering additional support or resources for employees who may have questions or concerns about the new healthcare contributions.
By following these steps, employers and employees can ensure a smooth transition to the new SHIF system, securing uninterrupted healthcare coverage and contributing to a healthier workforce in Kenya.
What is the minimum contribution to Shif?
Under the new Social Health Insurance Fund (SHIF) program in Kenya, the minimum contribution is Ksh 300 per year for those not in formal employment.
This ensures that even those with lower incomes can participate in the program and access healthcare services. # contribution to Shif
For salaried employees, contributions are calculated as 2.75% of their gross monthly income, deducted directly from their wages by their employer.
This structure helps provide comprehensive healthcare coverage for all residents, ensuring no one is left behind.
How to calculate shif (Social Health Insurance Fund)?
The Social Health Insurance Fund (SHIF) was established through the Social Health Insurance Act, Primary Health Care Act, and Digital Health Act, which took effect on 22 November 2023.
To implement the SHIF, regulations were published on 8 March 2024, mandating all Kenyan residents to register with the Social Health Authority (SHA) by 30 June 2024, with employers expected to start contributions from 1 July 2024.
However, implementation was delayed when the High Court declared the Acts unconstitutional. Despite this, the Court of Appeal issued a stay, allowing the laws to remain in force while the appeal is pending.
SHIF Contributions
The SHIF contribution rates are as follows: For salaried employees, 2.75% of their gross salary will be deducted monthly, with a minimum contribution of KES 300 and no upper limit. Employers must submit these payments by the 9th of the following month.
For non-salaried households, the contribution is 2.75% of household income, with a minimum of KES 300 per month, paid annually. # calculate shif
Penalties for Non-Compliance
Employers who fail to remit SHIF contributions on time will face a 2% penalty on the unpaid amounts. Additionally, failing to contribute or making unauthorized deductions from employees could result in fines up to KES 2 million, imprisonment for up to three years, or both.
These regulations are designed to ensure compliance and support the provision of comprehensive healthcare services for all residents. Getting on board with the requirements helps promote a healthier and more equitable society.
Shif rates Kenya calculator
Let’s break down how to calculate SHIF contributions for both salaried employees and non-salaried households. # Shif rates Kenya calculator
Example 1: Salaried Employee
- Gross Monthly Income: Ksh 50,000
- Contribution Rate: 2.75%
- Calculation: 50,000 * 2.75% = Ksh 1,375
So, a salaried employee earning Ksh 50,000 per month would contribute Ksh 1,375 to SHIF monthly.
Example 2: Non-Salaried Household
- Annual Household Income: Ksh 300,000
- Contribution Rate: 2.75%
- Calculation: 300,000 * 2.75% = Ksh 8,250 per year
A non-salaried household with an annual income of Ksh 300,000 would pay Ksh 8,250 per year to SHIF. # Shif rates Kenya calculator
Minimum Contribution Scenario
- For those with lower incomes, the minimum contribution is Ksh 300 per month for non-salaried individuals, or Ksh 3,600 per year.
By understanding these examples, you can apply the same calculation to your specific income to determine your SHIF contributions.
Conclusion
As Kenya moves toward a more inclusive healthcare system, the new SHIF rates reflect the government’s commitment to providing quality medical services for all citizens.
By contributing a percentage of income, both employers and employees are strengthening the healthcare system.
Staying up-to-date with the new SHIF payroll deductions ensures compliance and helps in planning for smoother financial management.
Understanding these changes is key to making the transition seamless for your payroll while securing better healthcare coverage for all contributors.
