SHIF vs NHIF in Kenya: What Changed, What You Pay, and What You're Covered For

What Is SHIF and Where Did NHIF Go?

The Social Health Insurance Act 2023 created a new legal framework for public health insurance in Kenya. Under that law, NHIF was dissolved and replaced by the Social Health Authority (SHA), which now administers three separate funds — the biggest of which is the Social Health Insurance Fund, or SHIF.

The transition took effect from October 2023. For employees in the formal sector, nothing changed in terms of who deducts the contribution — your employer still handles it and remits to the government. What changed was the amount, and the method used to calculate it.

Old NHIF: Flat Tiers

NHIF used a table of flat monthly contributions that increased with income but were not strictly percentage-based. At the bottom, someone earning below KES 5,999 paid KES 150 per month. Contributions stepped up through several brackets, reaching a ceiling of KES 1,700 per month for anyone earning KES 100,000 or more. That ceiling is the key point — no matter how much you earned above KES 100,000, your NHIF contribution never exceeded KES 1,700.

New SHIF: 2.75% of Gross Salary, No Cap

SHIF replaced all of that with a single rule: 2.75% of your gross monthly salary. No tiered table, no upper limit. The calculation is the same for someone earning KES 30,000 as for someone earning KES 500,000 — multiply gross by 2.75% and that is the deduction.

This matters most to higher earners. Someone on KES 150,000 gross was paying KES 1,700 under NHIF. Under SHIF, the same person pays KES 4,125 — an increase of KES 2,425 every single month. At KES 300,000 gross, NHIF was still KES 1,700; SHIF is KES 8,250. That extra KES 6,550 per month is real money, and for many people in senior roles, it arrived with almost no public explanation.

Side-by-Side Comparison: NHIF vs SHIF

Gross Monthly Salary	Old NHIF (flat)	New SHIF (2.75%)	Monthly Change
KES 15,000	KES 500	KES 413	− KES 87 (cheaper)
KES 30,000	KES 750	KES 825	+ KES 75
KES 50,000	KES 1,200	KES 1,375	+ KES 175
KES 80,000	KES 1,700	KES 2,200	+ KES 500
KES 150,000	KES 1,700	KES 4,125	+ KES 2,425
KES 300,000	KES 1,700	KES 8,250	+ KES 6,550

For lower earners, the switch was largely neutral or even slightly cheaper. For the middle and upper end of the salary range — broadly, anyone above around KES 62,000 gross — the new rate is higher than the old flat cap. The higher your salary, the larger the jump.

Who Pays SHIF?

All employees in the formal sector are required to contribute, with the employer deducting SHIF from gross salary each month before remitting to the SHA. If your employer is on payroll software, the deduction should have updated automatically — though in the months immediately after October 2023, there were cases of employers still applying the old NHIF flat rates.

Self-employed and informal sector workers are also required to register and contribute. For this group, the 2.75% applies to declared income, and payment is made directly — via M-Pesa Paybill or bank transfer — rather than through an employer. Registration is done through the SHA portal online or in person at a Huduma Centre. The SHA number you receive replaces the old NHIF card and becomes your digital health ID.

Dependants — a spouse and children — are covered under a single member's contribution. You register them when you register yourself, and they access services using your SHA number and their own linked profile.

The Three Funds Under the Social Health Authority

A point that often gets lost in the transition coverage is that SHIF is just one of three funds now operating under the SHA umbrella:

• Social Health Insurance Fund (SHIF) — the main fund, financed by the 2.75% deduction from employees and self-employed individuals. Covers inpatient and outpatient services at SHA-accredited public and private facilities.
• Primary Healthcare Fund (PHC) — government-financed, not from your payroll deduction. Covers primary care at the lowest levels: Community Health Promoters, Level 2 dispensaries, and Level 3 health centres. Meant to ensure basic care is accessible regardless of SHIF registration status.
• Emergency, Chronic and Critical Illness Fund (ECCIF) — also government-financed. Covers catastrophic illness: cancer treatment, renal dialysis, cardiac procedures, and similar conditions that would otherwise generate ruinous medical bills. The theory is that no Kenyan should go bankrupt because of a cancer diagnosis.

Your 2.75% SHIF contribution funds the first of these. The other two are separate budget lines, which is the government's way of saying that critical illness and primary care are being funded regardless of whether someone has paid in to SHIF — though the practical delivery of these promises is still a work in progress.

What Does SHIF Actually Cover?

SHIF is designed to cover both inpatient and outpatient care at accredited facilities. The stated intent was to expand on what NHIF offered, particularly for outpatient — historically one of NHIF's weakest areas. Under NHIF, outpatient cover was limited and inconsistent depending on your employer's top-up package or the specific scheme you had enrolled in.

Under SHIF, the coverage framework includes general outpatient consultations, diagnostics (lab tests, imaging), medicines, and inpatient admission at SHA-accredited hospitals. The benefit schedule — which specifies exactly what is covered and at what rates — is set by the SHA and is subject to update as the scheme matures.

The important qualifier is "accredited." Not every hospital in Kenya is on the SHA network, and among those that are, the pace of system integration has been uneven. Before assuming your preferred facility accepts SHA, check with the hospital directly or search the SHA accredited facilities list online.

Implementation Challenges: The Honest Picture

The transition from NHIF to SHA/SHIF has not been seamless, and it would be misleading to pretend otherwise. Through 2024 and into 2025, a significant number of hospitals — including some large private hospitals that had been NHIF-contracted — were not fully on the SHA system, or were experiencing claim processing delays that caused them to ask patients to pay out-of-pocket and seek reimbursement later.

The SHA claims portal and the hospital-side systems needed to communicate in real time for cashless access to work. In many cases they did not. Some hospitals suspended SHA contracts citing slow reimbursements. Patients turned up expecting cashless cover and were asked to pay. This is not the intended design of the scheme, but it is the practical reality that many Kenyans have encountered.

As of mid-2026, the situation has improved in some areas, particularly at public hospitals. At private hospitals, the experience is more variable. The lesson is: do not assume your health cover is operational just because your payslip shows a SHIF deduction. Call your intended hospital and confirm they are active on SHA and processing claims normally before you need them.

How to Register for SHIF

If you are a formal sector employee, your employer should have registered you when the scheme launched. Check that you have an SHA number — if you do not, speak to your HR or payroll team. You can also check and register on the SHA portal (sha.go.ke) or visit a Huduma Centre.

To register dependants, you will need their national ID numbers (for a spouse) and birth certificates (for children). Once registered, each dependant gets their own SHA profile linked to yours. When they visit a facility, they present their own SHA number or their linked card.

For self-employed registration, the process is the same portal or Huduma Centre route. You declare your income, the system calculates your monthly contribution at 2.75%, and you pay each month via Paybill 207607 on M-Pesa or through your bank. Missing months creates a gap in your cover, so it is worth setting up a standing order or recurring reminder.

The Payslip Reality for Salaried Employees

On a modern Kenyan payslip, you will typically see four statutory deductions: PAYE, NSSF, the Housing Levy (1.5% of gross), and now SHIF. For someone on KES 100,000 gross, these four deductions together amount to a significant portion of gross pay before any voluntary deductions like pension top-ups or SACCO contributions.

The SHIF change is particularly visible at higher salary levels. Many professionals who had settled into a mental model of their take-home pay found that from October 2023, their net went down without any change in salary or other deductions. For a senior manager earning KES 200,000 gross, SHIF is KES 5,500 per month versus the old KES 1,700 — a recurring difference of KES 3,800 every month, or KES 45,600 per year.

This is a genuine grievance, separate from whether the policy is well-designed. The increase was real, it was not communicated effectively to most employees, and many people are still reconciling their payslip numbers without understanding exactly why they changed.

Quick Reference: Key Numbers

Detail	NHIF (old)	SHIF (new)
Rate	Flat table (KES 150–1,700)	2.75% of gross salary
Cap	KES 1,700/month	No cap
Effective date	Pre-October 2023	October 2023 onward
Who deducts	Employer (PAYE employees)	Employer (PAYE employees)
Self-employed	Register and pay monthly	Register and pay monthly
Health ID	NHIF card (physical)	SHA number (digital)
Dependants	Covered under member	Covered under member
Governing body	NHIF Board	Social Health Authority (SHA)

What to Do Now

First, confirm your SHA number exists and that your dependants are registered. Second, verify that the hospital you would actually go to in an emergency is on the SHA accredited list and is currently processing claims — not just technically listed, but operationally active. Third, run your current payslip numbers through a calculator to understand exactly how much SHIF is costing you monthly versus what you paid under NHIF. The number may be larger than you realised.

If you are self-employed and have not yet registered, the longer you delay the larger the gap in your cover. The process takes less than an hour at a Huduma Centre and can be done online if you have your ID and registration details to hand.

SHIF is the system Kenya has now. Whether it ultimately delivers better health cover than NHIF is a question that will take years to answer properly. What is already certain is what it costs — and for most formal sector employees earning above the median, that cost is higher than it was before.