PAYE Tax Bands and Housing Levy Table 2026: How Your Net Pay Is Worked Out

Updated 20 October 2026

Pay As You Earn (PAYE) is the income tax your employer deducts from your salary every month and pays to the Kenya Revenue Authority (KRA). Before PAYE is worked out, three other deductions now come off your gross pay: NSSF pension contributions, the Social Health Insurance Fund (SHIF) contribution and the Affordable Housing Levy. Getting the order right matters, because those three are deducted before tax. This guide sets out the 2026 tax bands, the statutory rates, the calculation step by step and worked examples, plus what the proposed PAYE relief would change if Parliament passes it.

PAYE Tax Bands 2026 (Monthly)

These bands have applied since 1 July 2023. Every resident employee also gets personal relief of KSh 2,400 a month (KSh 28,800 a year), which is subtracted from the tax worked out on the bands. The Finance Act, 2026, signed on 23 June 2026, did not change the bands or the relief.

Statutory Deductions That Come Off Before PAYE

The NSSF figures are the Year 4 rates in force from February 2026. Tier I covers pay up to KSh 9,000 (KSh 540 each), and Tier II covers pay from KSh 9,001 to KSh 108,000 (up to KSh 5,940 each). Our guide to NSSF contribution rates explains the tiers in detail. Since 27 December 2024, under the Tax Laws (Amendment) Act, 2024, NSSF, SHIF and the employee’s Housing Levy are all allowable deductions, which means you are not taxed on the money that goes to them. Insurance relief no longer applies to SHIF. For more on the levy, see our Affordable Housing Levy guide, and for health cover, our SHA registration guide.

How PAYE Is Calculated, Step by Step

1. Start with gross pay: basic salary plus taxable allowances and benefits.
2. Work out NSSF, SHIF and the Housing Levy using the rates above.
3. Subtract them from gross pay to get taxable pay. Registered pension contributions and qualifying mortgage interest within their limits also come off here.
4. Apply the tax bands to taxable pay, band by band.
5. Subtract personal relief of KSh 2,400, and insurance relief if you have qualifying policies. The result is your PAYE. If it is below zero, PAYE is nil.
6. Net pay is gross pay minus NSSF, SHIF, the Housing Levy and PAYE, before loans, SACCO or other deductions.

Worked Examples

These figures are our calculations from the rates above for an employee with no other reliefs or deductions.

The KSh 50,000 Example in Full

• NSSF: 6% of KSh 50,000 = KSh 3,000. SHIF: 2.75% = KSh 1,375. Housing Levy: 1.5% = KSh 750.
• Taxable pay: KSh 50,000 minus KSh 5,125 = KSh 44,875.
• Tax on the first KSh 24,000 at 10% = KSh 2,400.
• Tax on the next KSh 8,333 at 25% = KSh 2,083.25.
• Tax on the remaining KSh 12,542 at 30% = KSh 3,762.60.
• Total tax KSh 8,245.85, minus personal relief of KSh 2,400 = PAYE of KSh 5,845.85.

To run your own figures, use our tax calculators, or the PAYE calculator in Kiswahili.

Who Pays No PAYE Today?

The tax on the first KSh 24,000 of taxable pay is exactly KSh 2,400, which personal relief cancels out. So under current law, anyone with taxable pay of KSh 24,000 or less a month pays no PAYE. Because NSSF, SHIF and the levy come off first, gross pay can be somewhat higher than KSh 24,000 before any PAYE is due, as the KSh 25,000 example shows.

Proposed PAYE Relief: Not Yet Law

The government had planned to exempt workers earning below KSh 30,000 and cut rates for those up to KSh 50,000, but the proposal was left out of the Finance Bill, 2026 because of revenue concerns. Treasury Cabinet Secretary John Mbadi has since said a separate amendment will go to Parliament in November 2026 to exempt workers earning KSh 32,800 and below. Until Parliament passes a law and it takes effect, employers must keep using the bands above. We will update this table if the rates change. Wider tax proposals for next year are tracked in our Finance Bill 2027 guide.

Employer Deadlines and Your P9

Employers must pay PAYE, NSSF and SHIF by the 9th of the following month and file PAYE on the monthly P10 return on iTax, where the Housing Levy is also declared. The levy is due within nine working days after the end of the month. At the end of the year your employer gives you a P9 form showing pay and tax deducted, which you use for your annual return. From 1 January 2027, under the Finance Act, 2026, individuals must file income tax returns by the last day of the fourth month after the year ends, which is 30 April for most people. Our guide to filing KRA returns on iTax walks you through it, and if too much tax was taken, see our KRA tax refund guide.

Frequently Asked Questions

What is the PAYE rate in Kenya for 2026?

10% on the first KSh 24,000 of monthly taxable pay, 25% on the next KSh 8,333, 30% up to KSh 500,000, 32.5% up to KSh 800,000 and 35% above that, less personal relief of KSh 2,400.

Is the Housing Levy deducted before PAYE?

Yes. Since 27 December 2024, the employee’s 1.5% Housing Levy is deducted before tax is worked out.

Is SHIF deducted before PAYE?

Yes. SHIF at 2.75% of gross pay, minimum KSh 300, is an allowable deduction.

What is the most an employee pays to NSSF in 2026?

KSh 6,480 a month, which is 6% of the upper earnings limit of KSh 108,000. The employer pays the same.

Has the KSh 30,000 PAYE exemption started?

No. It was dropped from the Finance Bill, 2026, and a new proposal for a KSh 32,800 threshold still needs Parliament’s approval.