SHIF is the Social Health Insurance Fund that replaced NHIF in Kenya. For employed workers, SHIF is deducted from gross salary every month and remitted through payroll. Because the deduction is percentage-based, it scales with income and directly affects take-home pay.
Current SHIF deduction rate
The employee SHIF deduction is 2.75% of gross monthly salary. Employers also make a matching contribution. In practical terms, this means as gross salary rises, SHIF amount also rises.
How to calculate SHIF quickly
Formula: Gross Salary × 2.75%
- KES 40,000 salary → SHIF = KES 1,100
- KES 75,000 salary → SHIF = KES 2,062.50
- KES 120,000 salary → SHIF = KES 3,300
Where SHIF appears on payslip
Most payroll systems show SHIF as a separate statutory deduction line. Older templates may still label this line as NHIF. The label can vary, but the deduction value should align with the SHIF rate where applicable.
Why employees should monitor SHIF
SHIF is one of the biggest recurring deductions after PAYE for many salaries. Confirming it each month helps you identify payroll mistakes early. It also helps you understand why net pay changes after salary increments or allowance changes.
Common confusion points
- SHIF is not the same as PAYE; one is health insurance contribution, the other is income tax.
- SHIF is calculated from gross salary, not net pay.
- If your salary changes, SHIF changes automatically because it is percentage-based.
Need a full breakdown? Use the Kenya Salary Calculator to see SHIF together with PAYE, NSSF, Housing Levy, and final take-home pay in one view.