Beyond income tax, Kenyan employers carry two other significant statutory obligations toward their staff: contributions to the National Social Security Fund and to the Social Health Authority. Both are designed to provide long-term security for employees, and both require accurate, timely handling by the employer.
NSSF contributions are deducted from an employee's pay and matched by the employer, building a retirement savings pot that the employee can access under defined conditions later in life. The contribution rates and thresholds have changed over recent years as the fund has transitioned to a tiered structure, so employers need to stay current rather than relying on outdated figures.
The Social Health Authority levy replaced the previous National Hospital Insurance Fund arrangement and funds access to healthcare services for contributors and their dependents. Employers must register employees, deduct the appropriate amount, and remit it alongside other statutory payments on a monthly basis.
Late or incorrect remittance of either contribution can result in penalties and, more importantly, gaps in an employee's benefits record that are difficult to correct later. Employers who keep organized digital records of payroll runs and remittance confirmations, using a system such as paperlesskenya.co.ke, are far better placed to resolve any discrepancies quickly when they arise.
Employers should periodically review their payroll setup against current statutory rates, since contribution thresholds and rates have changed multiple times in recent years, and continuing to apply outdated figures can result in under-remittance that surfaces as a liability later.
Employers who outsource payroll to a bookkeeper or payroll service should still review the figures each month personally, since ultimate responsibility for accurate statutory compliance rests with the business regardless of who processes the calculations.
Staying current on NSSF and SHA requirements protects employees' long-term benefits and shields the business from unnecessary statutory penalties.
These statutory contributions, though administratively demanding, ultimately protect employees and strengthen the long-term social safety net the business participates in.
Paperless
