Kenya has recently overhauled its health insurance system. The National Health Insurance Fund (NHIF) has been replaced by the Social Health Authority (SHA), under the Social Health Insurance Act, 2023, which began operations on 1 October 2024
Following the implementation of the (social health insurance act) of Kenya your monthly payroll will now have a new deduction titled social health insurance funds (SHIF). This will replace National Health insurance funds (NHIF). According to the act, each employee will contribute (2.75) of their gross salary (no upper limit) however there is lower limit of ksh 300 as the minimum deductible amount.
Point to note: all employees are required to register the employer (company/organization) and all employees on the SHA online port forms).
SHA Contributions
The Social Health Authority (SHA) is Kenya’s newly established public health insurance administrator. Formed under the Social Health Authority Act, 2023, it assumed operations from the National Hospital Insurance Fund (NHIF) on October 1, 2024, managing three critical funds aimed to drive Universal Health Coverage (UHC).
What You Need to Do
If you’re a Kenyan or resident, here’s what to keep in mind:
- Check if you are registered with SHA. Employers should have registered their employees.
- Look at your pay slip: ensure the deduction is present, correct (2.75% of gross salary, or minimum KES 300).
- If you are self-employed or in informal sector, go through means-testing via the SHA/Afya Yangu portal or USSD (*147#) to determine your contribution.
- Keep records: income, household details, etc., for the means testing (if applicable).
- Note deadlines: Employers must remit by 9th of the following month; non-salaried persons must pay annual contributions within stipulated timelines. Penalties exist. There are penalties for late payment: e.g. a 2% penalty on unpaid contributions, fines and/or possible imprisonment for employers who fail to register or remit properly
Why SHA Contributions Are Crucial
The shift from NHIF to Social health authority is not just a name change — it’s a fundamental reform in how Kenya finances healthcare. Here’s why contributions matter:
- Sustainable Health financing
by moving to a percentage-based system, Social Health Authority ensures that healthcare funding grows in line with the economy. This creates a sustainable pool of resources to finance Kenya’s Universal Health Coverage (UHC) goals. - Equitable Healthcare Access
Under NHIF, high-income earners paid relatively little compared to their incomes, while some low earners shouldered a heavy burden. Social Health Authority fixes this by making contributions proportional to ability to pay, ensuring fairness. - Protection against Health Shocks
Medical costs for chronic diseases, emergencies, and critical illnesses often push families into poverty. Social Health Authority’s structure — especially the Emergency, Chronic and Critical Illness Fund — shields Kenyans from catastrophic healthcare spending. - Strengthening Primary Healthcare
With a dedicated Primary Healthcare Fund, Social Health Authority prioritizes preventive and community-based care. Contributions directly fund services like immunizations, maternal health, and early screening, which reduce long-term health costs. - Improved Service Quality
a larger, well-funded pool gives the government leverage to negotiate better terms with hospitals, expand facilities, and ensure consistent drug supply. This means Kenyans can expect better quality healthcare services. - National Solidarity
SHA embodies the principle of “pooling risks and resources.” Healthy, high-income earners contribute more, which supports vulnerable groups like the sick, elderly, unemployed, and children. It’s a shared national safety net.
2. Three Funds under SHA
SHA handles three distinct but complementary insurance funds:
- Primary Healthcare Fund
– Government-funded for primary and preventive care (levels 2–3), available to all SHA-registered individuals at no direct cost. - Social Health Insurance Fund (SHIF)
– Funded via 2.75% gross-income contributions, with no maximum cap and a minimum of KES?300 per month.
– Covers level 4–6 services, including inpatient, outpatient, and specialized care. - Emergency, Chronic & Critical Illness Fund
– Activated when SHIF benefits are depleted. Covers emergencies, severe, and chronic conditions.
3. Contribution rates and approach
Below are various deductions for sampled amounts (KSHS):
| Gross Salary | NHIF | SHIF |
| 6000 | 300 | 300 |
| 12,000 | 500 | 330 |
| 30,000 | 900 | 825 |
| 50,000 | 1,200 | 1,375 |
| 70,000 | 1,400 | 1,925 |
| 100,000 | 1,700 | 2,750 |
| 300,000 | 1,700 | 8,250 |
| 1,000,000 | 1,700 | 27,500 |
For more detailed calculations, use the Kenya PAYE calculator courtesy of junyan and associates.
- Formal sector (salaried):
• Deducted by employers at 2.75% of gross salary, minimum KES?300 monthly
• Remitted by employers to SHA by the 9th of the following month - Informal sector (self-employed, non-salaried):
• Covered annually through means-testing
• Minimum contribution remains KES?300 monthly, with government subsidies for low-income earners
4. Transition from NHIF to SHA
- NHIF ceased operations on September 30, 2024, and SHA took over on October 1, 2024.
- Assets, liabilities, staff, contracts, and contributions were seamlessly transitioned to SHA.
- Employers and members were urged to re-register to maintain uninterrupted coverage.
5. Payment channels and compliance
For Employers:
- Register via the SHA Employer Portal
- Upload KRA PIN, CR12/BR1, list of employees, and submit contributions by the 9th
For Self? Employed:
- Register via USSD, the SHA portal, or Huduma Centres
- Payment via M?Pesa Paybill: 200222, SHA USSD (*147#), or authorized banks
6. Penalties for noncompliance
- 2% penalty on late contributions
- Employers face fines of up to KES?2 million or up to 3 years in prison for non-remittance
- Fraudulent claims or false registration lead to severe legal action
7. Benefits of SHA contributions
- Inclusive coverage: Supports the vulnerable, informal, and formal sectors
- Fair payment model: Income-based, replacing the NHIF’s flat rate
- Comprehensive protection: From outpatient to chronic and emergency care
- Transparent structure: Better accountability and budgeting
How Junyan & Associates Can Help You File SHA.
Transitioning from NHIF to the new Social Health Authority (SHA) contributions has left many Kenyans — both employees and business owners — uncertain about what to do. At Junyan & Associates, we make the process smooth, compliant, and stress-free.
Here’s how we can support you:
- Registration & Onboarding
we guide individuals, families, and businesses through the SHA registration process, whether through the online portal, USSD (*147#), or official SHA offices. - Accurate Contribution Calculations
our team ensures the correct 2.75% of gross salary (or minimum KES 300) is applied for employees, and we assist households in the means testing process for informal sector contributions. - Payroll Integration
For employers, we seamlessly integrate SHA deductions into your payroll system and ensure timely remittances to avoid penalties. - Compliance Advisory
we keep you updated on SHA regulations, deadlines, and changes so you remain compliant at all times. - Support for Self-Employed & Informal Sector
if you’re self-employed, a freelancer, or running an informal business, we help you determine your household income assessment and file correctly. - Dispute Resolution Assistance
In case of contribution disputes, penalties, or compliance notices from SHA, we represent and advise you on the best course of action.
Final Thoughts
SHA / SHIF represents a significant shift in Kenya’s healthcare financing. By moving to percentage-based, uncapped contributions, and bringing in means testing for informal workers, the system is more progressive in theory. While many will benefit (especially moderate and lower earners), those earning higher incomes will notice much large deductions. How well SHA delivers on quality, access, promptness of services, and transparency will determine whether people accept the new system or resist it.
The new SHA contribution system is a big step towards affordable, accessible healthcare for all Kenyans — but filing correctly and on time can feel overwhelming. That’s where Junyan & Associates comes in.
As your trusted accounting, tax, and compliance partner in Nakuru and across Kenya, we simplify SHA registration, contribution filing, and payroll integration so you can focus on growing your business or managing your family with confidence.
Whether you’re an employer, employee, or self-employed professional, our expert team ensures accuracy, timeliness, and peace of mind. With us, you never have to worry about penalties, missed deadlines, or compliance headaches.
💡 Junyan & Associates — Your Partner in Compliance, Your Bridge to Better Healthcare.
📞 Contact us today to get started on stress-free SHA filing.
FAQ:
Why was the shift to Universal Health Coverage necessary?
Answer:
To ensure that all Kenyans have access to quality, affordable and
comprehensive quality health services from health promotion to
prevention, curative, rehabilitation, and palliative care without
suffering financial hardship.
What is Social Health Insurance
(SHI)?
Answer:
It is a form of health financing mechanism based on risk and
resource pooling to increase efficiency of the healthcare system
that ensures that people pay for premiums into a pooled fund
that can be used for those who need the services at no cost
when they need the services.
What are the Principles of
Social Health Insurance?
- Accessible, quality, affordable healthcare services for all
- Well-defined benefit package anchored in law
- Mandatory registration and contribution
- Equity
What informs the proposed
reforms towards the SHI? (Why
was the transition to SHA
necessary instead of revamping
NHIF?)?
- The ultimate goal of a social health insurance system is to
provide equitable and affordable access to healthcare services
for all members of a society. - To increase health insurance coverage.
- Existence of fragmented pools targeting different populations
creates inefficiencies which result in increased cost of health
services. SHI proposes 3 consolidated pools to address the
inefficiencies. - High number of Kenyans being subjected to financial
constraints due to catastrophic illnesses. - Promote equity and fairness in contribution, through
households and not individuals.